Pertamina loses again on Karaha Bodas case

A court in the Cayman Islands has dropped Indonesian state oil and gas company PT Pertamina?s appeal to prevent Karaha Bodas Co. from getting access to $265 million awarded in an earlier case by the U.S. Supreme Court, Pertamina President Director said

?Karaha Bodas can take the money out? of the frozen account, Ari Soemarno told reporters in Jakarta Friday. Pertamina will pay for the claim, he said.

A Swiss arbitration tribunal in December 2000 ordered Pertamina to pay Karaha $261 million to cover the $100 million it had spent plus lost profits and interest. Karaha then turned to U.S. courts to force payment.

After years-long legal battle, the United States? Supreme Court issued a ruling on October 2, 2006 that upholds a lower court ruling that ordered payment from a frozen bank account held by Pertamina in the United States.

In August 2002, a U.S. District Court froze $285 million of Pertamina's funds in the U.S. About $29 million of the funds belongs to Pertamina while the rest is proceeds of liquefied natural gas sales belonging to the Indonesian government

Karaha Bodas built a geothermal power plant in West Java in 1990s but the government suspended the project indefinitely in 1998 as part of the retrenchment measure to cope with Asian economic crisis. (*)