Pertamina, PLN investigated for possible collusion on Karaha case
Thursday, July 18 2002 - 12:10 AM WIB
In a statement, KBC said it has filed evidence in the US District Court for the southern district of Texas which it claims shows Pertamina conspired with PLN to impede a ruling issued by the court in April.
That ruling bans Pertamina from continuing its efforts in Indonesia to annul an international arbitration decision issued two years ago ordering it to pay US$ 261 million to KBC as compensation for their failed joint venture.
Pertamina has been found in contempt of the district court's order but continues to seek an annulment within Indonesia. It is facing another contempt motion filed by KBC
In the latest order in the long-running case, the district court has given permission for KBC to obtain "information regarding the relationship between PLN and Pertamina and the extent to which PLN exerts control over Pertamina or has directed the actions of Pertamina in pursuing the Indonesian action", according to court documents distributed by KBC
"At this time, the court is not requiring Pertamina to divulge attorney-client communications," said the order, signed by judge Nancy Atlas.
However, Pertamina must respond to Karaha's queries regarding communications between itself and PLN as well as any other Indonesian government official regarding the annulment proceedings.
Atlas also ordered Pertamina to present a witness with personal knowledge of the matters to appear in a mutually agreed location in the US within 20 days of the order, dated July 12.
This is the latest round in the companies' legal dispute, which began in earnest in 2000 when a Swiss arbitration court ordered Pertamina to pay KBC $ 261 million as compensation for a failed joint venture between the two companies. Pertamina has refused to do so, despite the ruling being upheld by courts in the US, Hong Kong and Singapore.
KBC claims it invested more than $100 in developing a geothermal project, which was suspended in 1998 at the height of the Asian monetary crisis. Some industry analysts had doubted the figure and argued that considering the progress of the works done by KBC on site, the fair investment value was only $ 40 million.
The $ 261 million awarded to it in compensation covers this investment, as well as lost profits and legal costs.
Pertamina claims the Indonesian government which owns the company, not the oil company itself, suspended the project and that the dispute between the two sides should therefore be settled under Indonesian law.
It has also told AFX-Asia that it disputes Karaha's claim relating to the level of investment and lost profits, although Pertamina did not contest these points in the Swiss court. (*)