Arbitration court rules in favor of Medco

IDX-listed energy company PT Medco Energi Internasional Tbk announced Tuesday that the arbitration court of the United Nations Commission on International Trade Law (UNCITRAL) has approved claims worth US$24 million filed by its Singapore subsidiary Medco Strait Services Pte Ltd (MSS) in a lawsuit against former partners Singapore Petroleum Ltd (SPC) and Cue Energy Pty Ltd.

?We?re happy with the arbitration court ruling which confirms our position because we have acted in good faith and completely fulfilled our contractual obligations,? said CEO of Medco Energi, Roberto Lorato in the statement.

The statement said that the case started when MSS participated in the Jeruk field development project in the Sampang PSC in a joint venture with SPC and Cue.

But as the project did not go well, MSS decided to pull out from the joint venture and demanded for withdrawal of the funds it had invested. SPC and Cue initially declined to return the funds due to various reasons, triggering MSS to file for the arbitration lawsuit in 2012, demanded claims worth $35.06 million from the former joint venture partners in relation to its investment in the Jeruk project.

On March 6, 2014, the arbitration panel issued an interim ruling, confirming the MSS demand, but did not spell out the amount of compensation that must be paid by SPC and Cue to MSS. The arbitration court at the time only issued guideline for calculating the compensation, letting the three companies to jointly decide the size of compensation within 14 days since the issuance of the interim ruling, or in accordance with a jointly agreed extended schedule.

Editing by Reiner Simanjuntak