Dili – In a case observers say could have future impact on foreign investment in East Timor, an Australian construction company launched an appeal Thursday against a judgement ordering it to pay compensation to a former Timorese business partner.

J.J Macdonald Engineering was appealing against a Timorese court's ruling that it paid USD 1,5 million compensation to Foo Han Kuin, a supermarket chain owner and former partner of the Australian firm in a joint venture.

In 2000, the two parties created East Timor Constructions, one of the biggest companies to emerge in Timor after the destruction and violence of 1999. However, Foo decided to pull out of the venture in 2001 and began legal proceedings against the Australian company, which admitted to owing Foo USD 50,000.

Foo demanded USD 1.5 million compensation from the Australian firm and the claim was supported by a court in one of Timor's most prominent civil actions. J.J Macdonald was also ordered to pay all costs.

The Australian firm's attorney accused the Timorese court of improper conduct in the courtroom and also said attempts had been made to bribe him. It was also alleged by J.P. Macdonalds's lawyers that their Dili offices were ransacked and "important legal documents stolen or burnt".