US Court of Appeals processing Pertamina?s appeal: Official
Monday, June 24 2002 - 02:50 AM WIB
?Our appeal to the US court has been received, and it is now processing it so as to make a legal decision,? Ainun said.
Ainun denied earlier reports that the US Court of Appeals had upheld a freeze on nearly US$275 million of more than $520 million frozen in trust accounts of Pertamina which had been involved in a legal battle with a Cayman Islands-registered geothermal firm Karaha Bodas Company (KBC).
A KBC lawyer had been quoted recently that the court had denied a motion by the Indonesian government, which had argued for the release of 95 percent of the frozen funds.
Ainun said on Saturday the US Court of Appeals had in fact turned down KBC?s request that it ignore Pertamina?s appeal.
He said the court had in stead ?ordered BoA to soon release Pertamina?s assets of more than $200 million.?
The legal dispute between Pertamina and KBC centers on the suspension by the Indonesian government of KBC?s geothermal power project in West Java in 1998 when Indonesia faced serious economic crisis.
KBC, which is controlled by U.S. companies Florida Power Energy LLC and Caithness Energy LLC, reported the case to a Switzerland-based arbitration panel which then ruled in 2000 in KBC?s favor. The panel ordered Pertamina to pay KBC $261 million in compensation for the breach of the power project contract. The project is located in Karaha Bodas District in West Java.
Based on the arbitration ruling, a U.S. court this year issued a ruling instructing Bank of New York and BoA to freeze some $200 million in funds believed to belong to Pertamina, which the Indonesian claims to belong to the Indonesian government.
The Indonesian government suspended the Karaha power project and many other mega projects due to the economic crisis. Pertamina, state electricity company PLN and KBC signed the project contract in 1994.
Cancellation of KBC project was force majeure, and not breach of contract, Pertamina says. (*)