KBC seizes $29 million after Pertamina loses appeal in U.S.

State-owned oil and gas company PT Pertamina has suffered another defeat in its legal battles against PT Karaha Bodas Company (KBC), when New Orleans Supreme Court in the United States rejected Pertamina?s appeal and ruled in favor of KBC, the Investor Daily Indonesia and Koran Tempo newspapers reported in their Friday edition.

This decision puts Pertamina?s assets in the U.S. under major threat. According to the latest news, KBC has already seized over US$29 million from Pertamina?s 15 bank accounts.

?The latest information which we received (from the U.S.), the Supreme court rejected our appeal and awarded the case (to KBC) in a final decision,? Pertamina?s director of finance Alfred Rohimone said while replying to a question posed by Minister of Energy and Mineral Resources Purnomo Yusgiantoro on Thursday in Jakarta.

Armed with the Supreme Court?s judgement, KBC, according to Alfred, will be more aggressive in hunting the assets of Pertamina in foreign countries. Earlier also, KBC won the international arbitration against Pertamina.

But Pertamina has filed another case in the U.S., in which it claimed the money, around US$300 million, in the 15 U.S. accounts belong to the Indonesian government (not Pertamina), meaning that KBC could not seize that money. But it will take eight to 12 months to get the court?s decision.

Seprately, Pertamina?s president director Widya Purnama insisted he would not pay a single penny to KBC.

?Please note down, Pertamina will not pay, if it is told to pay, I will resign from my post. I am not playing,? Widya said.

Due to 1997 Asian fnancial crisis, KBC?s power plant project at Graut, West Java was cancelled by the previous government, prompting the U.S.-based firm to file arbitration suit against its partner Pertamina. (*)