New York court to decide amounts of Indonesian govt funds in frozen U.S. accounts

The New York district court will decide on Jan. 27 the portion of the Indonesian government’s and state oil and gas firm PT Pertamina’s ownership in frozen U.S. bank accounts belonging to the Indonesian firm, a company official said Monday.

The court will order related banks to release funds owned by the Indonesian government after determining its ownership portion, Pertamina’s financial director Alfred Rohimone told reporters in Jakarta.

Currently, Pertamina is struggling to get back US$650 million from its 12 accounts in U.S. banks, saying that the fund belongs to the Indonesian government.

“We expect that the New York court judges will dare order the banks to return funds to the Indonesian government from the frozen accounts,” Alfred said.

Alfred dismissed recent reports that the government had provided Pertamina with funds worth $290 million to settle the company’s protracted dispute with American power firm Karaha Bodas Company (KBC), and that the move was meant to enable the government to claim at least 55 percent or about $357 million of its frozen funds.

KBC had filed arbitration proceedings against Pertamina with an international arbitration panel for the suspension in 1998 of its geothermal power project in Karaha Bodas village in West Java. KBC demanded Pertamina $261 million in compensation, which the Indonesian firm refused to fulfill.

An American court then ordered the blocking of Pertamina’s accounts in some American banks, which Pertamina said as also including funds belonging to the Indonesian government. (godang)