Interpid to appeal Surabaya PTUN?s ruling

By Romel S. Gurky

The State Administrative Tribunal (PTUN) in Surabaya, East Java, has handed down judgment in the lawsuit brought by Australian firm Intrepid Mines Limited, to set aside the transfer of the Tujuh Bukit mining leases (IUP Eksplorasi and IUP Operasi Produksi) from PT Indo Multi Niaga (PT IMN) to PT Bumi Suksesindo.

Intrepid said in a statement on Friday it became aware in December 2012 that the Tujuh Bukit IUPs, or mining leases, had been transferred by its Indonesian joint venture partner, PT IMN, to PT Bumi Suksesindo (BSI), which was initially a subsidiary of PT IMN. Since the date of transfer of the IUPs, the shareholding in BSI had changed such that PT IMN was no longer a shareholder in that company.

Indonesian legislation provides that IUPs are not transferable, with an exception for transfers to majority-held subsidiaries. Intrepid therefore instituted proceedings in the PTUN in Surabaya, seeking that the decisions of the regent of Banyuwangi to approve the transfer of the IUPs and the subsequent changes in shareholding in BSI, be set aside.

On Sept. 12, 2013, judgment was handed down in the matter and whilst the Tribunal was split in its decision, two judges ruled against Intrepid on a procedural point of lack of legal standing. They opened that Intrepid had no standing to challenge the actions of the Banyuwangi regent in circumstances where it was not yet a shareholder in PT IMN. They did not consider the merits of the case. The third judge, in his dissenting verdict, accepted Intrepid?s standing to institute proceedings and went on to examine the merits of the matter, concluding that the Banyuwangi regent had acted contrary to Indonesian law in approving the transfer of the IUPs and subsequent corporate reorganisation of BSI.

Intrepid Executive Chairman, Ian McMaster, noted: ?We believe that the findings of the dissenting judge, Judge Tri Cahya Indra Permana, provide a solid foundation for an appeal to the State Administrative Appeals Court of Surabaya, which we shall be pursuing.?

The decision of the tribunal is not final and binding on the parties until further appeals have been exhausted. The company has fourteen days within which to lodge an appeal, which it intends to do.

Separately, Intrepid confirms that it has (through its wholly-owned subsidiary. Emperor Mines Pty Limited), filed an Arbitration Notice with the Singapore International Arbitration Centre, commencing arbitration proceedings against PT IMN and the other joint venture parties in respect of breaches of breaches various joint venture agreements in place between them and the Intrepid.

Editing by Johannes Simbolon