Pertamina appeals ruling in Karaha case<\/p>\n
Moch. N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
State-owned oil and gas firm Pertamina said on Friday it had
\nfiled an appeal with the Central Jakarta District Court against
\nan arbitration ruling ordering Pertamina to pay US$261 million to
\nindependent power producer Karaha Bodas Co. LLC in compensation
\nfor the suspension of a power project in 1998.<\/p>\n
Pertamina's finance director, Ainun Naim, said the appeal was
\nfiled in response to legal actions by Karaha, which won
\nconfirmation from the U.S. Federal Court in Houston, Texas, and
\nbegan seizing Pertamina assets around the world to satisfy the
\nruling.<\/p>\n
"We filed the appeal today (Friday). The international
\narbitration ruling should be based on Indonesian law as the case
\noccurred here," he told The Jakarta Post.<\/p>\n
Karaha entered into contracts with Pertamina and state
\nelectricity company PT PLN in 1994 to develop a geothermal power
\nplant in Karaha Bodas, West Java.<\/p>\n
It had invested $100 million developing the project when the
\ngovernment suspended it, along with other independent power plant
\nprojects, in late 1997 to help ease PLN's financial burden during
\nthe economic crisis.<\/p>\n
The moved prompted Karaha to file a suit against Pertamina,
\nPLN and the government with the International Arbitration Board
\nin Switzerland in 1998.<\/p>\n
In December 2000, the arbitration board issued a ruling
\nordering both Pertamina and state electricity company PLN to pay
\n$261 million to Karaha, plus 4 percent interest per year,
\nbeginning from January 2001.<\/p>\n
In December last year, Karaha won a confirmation from the U.S.
\nFederal Court in Houston approving the execution of the
\narbitration board's ruling.<\/p>\n
The company began a campaign to seize Pertamina's assets
\naround the world, including in Texas, New York, Delaware and
\nCanada, following Pertamina's refusal to pay the compensation.<\/p>\n
Karaha is 37.5 percent owned by American giant Florida Power,
\n37.5 by New York-based Caithness, 5 percent by Japan's Tomen and
\n10 percent by local company Sumarah Daya Sakti.<\/p>\n
Ainun said while Pertamina was pursing the appeal, it would
\ncontinue efforts to persuade Karaha to resume the power plant
\nproject.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-appeals-ruling-in-karaha-case-1447893297",
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"sponsor": "Okusi Associates",
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