Jakarta court delays issuing verdict over Karaha Bodas case

The Central Jakarta district court on Tuesday postponed until August 27 its session to hand down decision on the dispute over a geothermal power project between state oil and gas firm Pertamina and Karaha Bodas Company (KBC), an independent power producer controlled by U.S. investors.

The delay was due to the absence of the presiding judge, said Silvester Djuma who was member of the panel of judges who examined the power project case.

Pertamina in 2001 filed a suit in the Central Jakarta court asking it to annul the ruling of a Switzerland-based panel of arbitrators, which entailed that Pertamina must pay KBC nearly US$261 million. The amount was to compensate the losses incurred by KBC due to the suspension by the Indonesian government of its geothermal power project in Karaha Bodas village in West Java.

The Swiss arbitration argued that the $261 million included $100 million in compensation for the costs already incurred by the company and $160 million for the losses of potential profits. The power project was suspended in 1998 after Indonesia was hit by severe economic crisis.

Pertamina and the Indonesian government rejected the arbitration decision arguing that the project suspension was force majeur.

KBC, which is registered in Cayman Islands, ignored Pertamina?s move and asked courts in the United State, Singapore and Hongkong ? where Pertamina had bank accounts ? to support the ruling of the Swiss panel of arbitrators.

Meanwhile, KBC?s lawyer Rambun Tjajo said on Tuesday the Central Jakarta court had no authority to annul the Swiss arbitration?s decision. (godang/leo)