RI protests ICSID ruling, plans another challenge

The government is looking into the possibility of filing another objection into the latest ruling of the International Center for Settlement of Investment Disputes (ICSID), insisting that the international arbitration has no jurisdiction in hearing the claims filed by US-based coal miner Churchill Mining Plc against the Republic of Indonesia.

Kompas quoted Chairman of the Investment Coordinating Board (BKPM) Mahendra Siregar as saying Saturday that the Ministry of Human Rights and Law, and the Attorney General?s Office are currently making the necessary preparations to challenge the ICSID decision.

Mahendra said that the process of Churchill in acquiring the East Kutai coal asset in Kalimantan, which has been the center of dispute with the government of Indonesia, has not been in line with the existing law and regulations in Indonesia.

?In this context, we?re looking into the possibility on how to file a complaint toward the (ICSID) ruling,? Mahendra said.

Churchill Mining announced on Tuesday that the ICSID has rejected the Republic of Indonesia?s challenges to the tribunal?s jurisdiction in hearing the treaty claims filed by the company and its Australian subsidiary Planet Mining Pty Ltd.

Churchill filed in May of 2012 a Request for Arbitration with ICSID against the Republic of Indonesia (RI), alleging that Indonesia breached its obligations under the UK-Indonesia Bilateral Investment Treaty when licenses on the East Kutai coal project in Kalimantan were revoked.

Churchill?s Australian subsidiary Planet Mining Pty Ltd, which via its 5 percent shareholding in PT Indonesia Coal Development also held an interest in the East Kutai Coal Project, filed a separate arbitration with the ICSID against RI pursuant to the Australia-Indonesia Bilateral Investment Treaty (the Planet Arbitration). The Churchill Arbitration and Planet Arbitration have subsequently been consolidated into a single proceeding.

In its announcement of 10 May 2013, Churchill provided a preliminary estimate of its and Planet's damages as a result of the actions taken by the Republic of Indonesia of not less than US$1.054 billion, excluding interest. This estimate remains under review and Churchill and Planet will finalize their damages presentation in the course of the arbitration proceedings. (*)