Court hearing over coal dispute case scheduled for next month
Wednesday, January 27 2016 - 01:03 AM WIB
The first court hearing of a lawsuit filed by India Metal & Ferro Alloys Ltd (IMFA) against the Indonesian government over coal dispute is expected to be held on February 6, according to a senior government official.
The hearing was initially scheduled for late last year, but at the request of the Indonesian government it was postponed to next month, said Heriyanto (one name), Head of the Legal Division at the Ministry of Energy and Mineral Resources.
He said that the first hearing will decide where the tribunal would be held with options including London, Hong Kong, and Singapore.
Heriyanto said that the government is currently making the necessary preparations including to appoint a foreign lawyer. He added that a beauty contest would be held to select the counselor that would accompany the government at the tribunal.
IMFA filed in September of last year a lawsuit against the Indonesian government with an arbitration court in The Hague after the company failed to carry out mining operations at its concession in Kalimantan due to overlapping permits. The Indian firm also demanded compensation worth US$581 million (about Rp 7.7 trillion).
IMFA acquired the concession from an Indonesian firm PT Sri Rahayu Indah (SRI) in 2010 for $8.7 million, according to the government. SRI obtained an IUP mining business permit for a combined concession of 3,600 hectares, spanning the regencies of East Barito, South Barito (South Kalimantan) and Tabalong (Central Kalimantan).
Problem emerged for IMFA after the local regency administrations issued permits to other seven investors.
The problem of overlapping permit emerged after the central government handed over the authority in issuing mining permits to local administrations as part of their greater autonomy power. This has been seen as one of the key challenges of investing in the Indonesian mining sectors.
The government has said that IMFA has failed to conduct proper due diligence process in acquiring SRI. He said that the Indian firm should have consulted the central government before making the investment.
Editing by Reiner Simanjuntak