New York court to decide KBC case within next two months

The New York district court is expected to issue a verdict on Pertamina's appeal against its decision on Karaha Bodas Company (KBC) case within the next two or four months, the state owned oil and gas company's president director Widya Purnomo said.

"We are now waiting for the court's decision on the memorandum of law in opposition submitted by Pertamina's lawyer in April, last year to response to the sanction motion filed by KBC," he told a hearing with members of the Commission VII of the House of Representatives (DPR). "The appeal process has been begun since January 24, this year. Our lawyer expected the New York court would issue the decision within next two months or next four months at the latest," he added.

As part of the sanction motion, Pertamina had been scheduled to hold a hearing in the New York court on February 15 or Wednesday, he said.

In October, 2004, the US Supreme Court rejected Pertamina's appeal on the local court decision to require the state owned oil and gas company to pay compensation of up to US$302 million ( including interest).

As part of the decision, the Supreme Court had also asked Bank of America to transfer Pertamina's funds worth about US$29 million to KBC as part of the compensation settlement. KBC had also asked the New York court to allow the transfer of the government's funds worth about US$270 million to its accounts to settle the compensation.

Karaha Bodas sued Pertamina on the behalf of the government through the International Arbitrary for the suspension of its geothermal project in Karaha, West Java in 1997. In 2000, Pertamina were then asked to pay a compensation of US$261 million but the state-owned oil and gas company refused to settle the payment. The amount of the claim has swelled to over US$300 million due to the accumulation of interest and penalty. (Godang)