Supreme Court chief justice urges govt to pay KBC’s claim
Wednesday, July 28 2004 - 02:43 AM WIB
The Supreme Court chief justice Bagir Mannan has suggested that the government must respect the international arbitration decision, which ordered the state-owned oil and gas company PT Pertamina to pay compensation to the US Power company Karaha Bodas Company (KBC), the Koran Tempo newspaper reported in its Wednesday edition.
The government, according to Bagir, already knew that the arbitration’s decision was final and compulsory for the disputed parties to respect the decision.
“Therefore, don’t mix this with the ongoing corruption case (which is being investigated by the police),” Bagir told the Koran Tempo newspaper on Monday in Jakarta.
Bagir was referring to last week’s National Police chief Gen. Da’i Bachtiar’s statement, which said that it would be better if the government postpone the payment to Karaha Bodas until investigation of the corruption case is settled.
According to Bagir, there is nothing complex in this case. As per the arbitration’s decision, the defeated party must pay the claim to the winner, where as the corruption case is subjective in nature.
Pertamina and the Indonesian government have been involved in a protracted legal battle with KBC over the suspension by the Indonesian government in 1998 of KBC's geothermal power project in Karaha Bodas, West Java.
The Geneva panel of arbitrators in 2001 ordered Pertamina to pay $261 million in compensation to KBC for the power project suspension, which Pertamina and the Indonesian government refused to follow on the grounds that it was an overly big amount.
The compensation amount soared to $294 million on interest charges. (*)