IMFA coal dispute case to be resumed in Singapore court

By Thomas Sembiring

A Singapore arbitration court is expected to resume next month the hearing of a coal lawsuit filed by India Metals and Ferro Alloys Limited (IMFA) against the Indonesian government.

Heryanto of the Legal Bureau at the Directorate General of Mineral and Coal of the Ministry of Energy and Mineral Resources told Petromindo.com recently that the Singapore court will hear the charges filed by IMFA against the Indonesian government.

He said that the entire court process is expected to be concluded in September of next year.

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. The Indian firm should have consulted the central government before making the investment.

Editing by by Reiner Simanjuntak