CBM Asia to sue partner over interest dispute

Vancouver-based firm CBM Asia Development Corp. announced on Wednesday that it would commence arbitration proceedings in Singapore court over a dispute with partner in a coal-bed methane block in East Kalimantan.

According to the company, the joint acquisition agreement for the application for a CBM PSC over the 56,300 hectare Kutai II block has expired. As a result, the company's participating interest in the potential PSC should revert back from 28% to 40%.

However, the company is currently in dispute with the other interest holder regarding its ownership interest in the Kutai II Block and intends to commence arbitration proceedings in Singapore under the terms of its participation agreement in order to secure the company's interest in any future PSC for the Kutai II Block and protect the interests of CBM Asia's shareholders, the company said.

The company did not give detail about the partner, but in its June 23 2010 report, the company said it had entered into joint acquisition deal in Kutai II block with Newton Energy CBM Limited and Ephindo IIthabi CMB Holding Inc. (romel)