NY court grants RI?s request to release some of the frozen money

A New York court had accepted request from the government of Indonesia and state oil and gas company PT Pertamina Tbk to release some of the US$ 650 million fund frozen by US banks at the request of Karaha Bodas Company (KBC), a Pertamina official said Friday.

Pertamina in-house lawyer Simson Panjaitan told Petromindo.Com on Friday that the New York court had ruled to freeze only US$ 290 million of the fund, the amount of compensation payable to KBC. The decision was issued on earlier this month.

Simson said the court order was not immediately executed as KBC is seeking to appeal the court?s decision.

Pertamina and the government had been involved in prolonged legal battle with KBC over the former?s decision to scrap the latter geothermal power plant development in West Java due to financial crises that hit Indonesia in the 1990s.

The Geneva Arbitrary Court in 2001 had ordered Pertamina to pay US$261 million in compensation to KBC for canceling a joint power plant project. Several US courts and Hong Kong and Singapore courts upheld the decision and the amount of payable compensation soared to $290 million on interest charges.

The government had been trying to settle the case off-court, but thus far it had been unable to negotiate directly with KBC shareholders, Caithness energy and Florida Power. The government had also lobbied US government to help settle the case. (alex/godang)