Karaha Bodas seizes Pertamina's assets to satisfy $261 mln judgment: Report
Tuesday, February 26 2002 - 02:11 AM WIB
The report said Pertamina has refused to pay any portion of the award, requiring Karaha to begin seizing Pertamina's assets around the world in order to satisfy the award.
Karaha is an independent power developer that in 1994 entered into contracts with Pertamina and another Indonesian entity to develop the Karaha Bodas Geothermal Projects in Indonesia. Karaha invested over $100 million in developing the power projects, but in 1998 Indonesia suspended them. Unable to proceed, Karaha filed for arbitration in Switzerland pursuant to the Arbitral Rules of the United Nations Commission on International Trade Rules. In December 2000, after extended hearings, the independent arbitrators ruled against Pertamina, awarding Karaha approximately $261 million in damages.
The Swiss courts rejected Pertamina's subsequent appeals, but Pertamina nonetheless refused to pay. Karaha then began enforcement proceedings in Houston, Texas, asking the federal court there to convert the Swiss award into a U.S. judgment. After extensive proceedings in Houston, Judge Nancy F. Atlas rejected all of Pertamina's defenses, and on December 4, 2001 entered judgment against Pertamina for approximately $261 million.
Pertamina has still refused to pay any portion of the award or judgment. As a result, Karaha has been forced to begin execution against Pertamina's assets around the world. On February 21, it filed garnishments and discovery requests in Texas, New York, and Delaware against banks that are believed to hold Pertamina's funds, and against a number of Pertamina's oil and gas production partners. On the same day, Karaha also began enforcement proceedings against Pertamina in Canada to attach assets there. Karaha will continue to vigorously prosecute these execution proceedings in any location where it can identify Pertamina's assets.
Contact: for Karaha Bodas Company, Christopher F. Dugan at 202/879-3432. (*)