U.S. Supreme Court rejects Pertamina's latest appeal on KBC case

The U.S. Supreme Court has formally turned down Pertamina's latest appeal against an earlier court ruling which requires the state-owned oil and gas firm to pay US$299 million in compensation to U.S.-based power firm Karaha Bodas Co., Investor Daily reported on Tuesday.

Speaking at a hearing with the Commission VII of the House of Representatives (DPR) on Monday, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that the U.S. Supreme Court had rejected all the new evidence documents submitted by Pertamina in its appeal.

"At present, the government is trying to submit another evidence related to alleged tax fraud made by KBC and to seek an out of the court settlement," he was quoted as saying at the hearing.

In its appeal, Pertamina submitted a number of new evidence including a document indicating that KBC had received an insurance claim of about US$75 million, as well as an audit result indicating that the geothermal power plant developed by KBC in Karaha Boda, West Java had a capacity of only 30 megawatt.

The minister said that in its appeal, Pertamina also submitted another audit result indicating that KBC had invested only about US$50 million, instead of Rp US$100 million it claimed.

Karaha Bodas sued Pertamina on the behalf of the government through the International Arbitrary Agency for the suspension of its geothermal power project in Karaha, West Java in 1997. Pertamina were then asked to pay a compensation of US$299 million but the state-owned oil and gas company refused to settle the payment.

Karaha, then, sued Petral offices in Singapore and Hong Kong to pressure Pertamina to pay the claim. (*)