Australian surfwear brand Billabong International is being sued by its former Indonesian licensee, CV Bali Balance (CVBB), over allegations the termination of its licence in 2005 was invalid.

The claim filed in the Denpasar District Court in Indonesia is seeking compensation of US$53m for specific losses along with US$100m for "unspecified" damages arising out of the termination.

But Billabong believes "there is absolutely no basis whatsoever for CVBB's civil claim," and says it intends to defend the proceedings.

It also said there is no evidence to support the compensation demands since CVBB's annual sales of Billabong products were just AUD13m.

"In Billabong's view, the civil claim is simply tactical litigation in Indonesia to attempt to influence the settlement discussions which are ongoing between Billabong and CVBB," it said in a statement today (9 March).

The dispute goes back five years when Billabong terminated the licence agreement with three years left to run.

CVBB acknowledged the validity of the termination at the time.

Since then, Billabong has been conducting its business in Indonesia directly through its wholly owned subsidiary, PT Billabong Indonesia.

The surfwear firm believes it is "highly unlikely" the claim will have any material adverse effect on its business or operations outside Indonesia or on the Billabong Group as a whole.