Pertamina declines to surrender $275m bond to Karaha
Friday, July 5 2002 - 01:48 AM WIB
State-owned oil and gas firm Pertamina declined to post a US$275 million bond as ordered by the U.S. Delaware District Court, saying that there was no final decision yet on its legal dispute with Karaha Bodas Co., a U.S.-based power producer.
Pertamina president Baihaki Hakim was quoted by the Kompas daily Thursday that since the court process was still underway, there?s no obligation for Pertamina to submit the fund to Karaha.
Karaha has demanded Pertamina to submit the $275 million bond as a guarantee fund in case it wins the case against Pertamina.
In 2000, an arbitration panel in Switzerland ordered Pertamina to pay Karaha $261 million in compensation, after the government in 1997 cancelled its contract to develop a power project. Karaha has claimed it had invested $100 million and said that the cancellation had cost the company some $160 million in potential profit.
But Pertamina challenged the arbitration ruling.(*)