U.S. court rules Pertamina in contempt<\/p>\n
Moch. N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
The U.S. District Court in Houston, Texas, has issued a contempt
\norder against the state-owned oil and gas firm Pertamina for
\nusing a Jakarta court to avoid paying damages to foreign
\ncontrolled power company Karaha Bodas Co. LLC.<\/p>\n
\"It's extraordinary for a U.S. court to find a civil party in
\ncontempt, and it does so when a party's actions are extreme and
\negregious.<\/p>\n
\"This shows once again that Pertamina and Indonesia appear to
\nbe willing to do whatever they can to avoid their legal
\nobligations,\" Karaha legal counsel Chris Dugan said in statement
\nreleased on Thursday to The Jakarta Post.<\/p>\n
Pertamina and Karaha have been involved in a legal bout over a
\ngeothermal power project which was suspended by the government in
\n1998 due to the country's economic crisis.<\/p>\n
The suspension of the project prompted Karaha, which claims it
\nhas invested more than US$100 million, to file for arbitration
\nwith a Switzerland-based arbitration body. The U.S.-controlled
\npower firm won the case in 2000, under which the arbitration
\nboard ruled that Pertamina should pay some $261 million in
\ncompensation. The ruling was latter confirmed by the Houston
\nDistrict Court.<\/p>\n
But instead of abiding by the ruling, Pertamina brought
\nproceedings in a Jakarta court, which on Monday issued the
\nsurprising decision of annulling the award made by the
\ninternational arbitration body.<\/p>\n
The next day, the Houston court declared Pertamina in
\ncontempt.<\/p>\n
Pertamina declined to comment on the U.S. court ruling.<\/p>\n
Company spokesman Ridwan Nyak Baik would only say that
\nPertamina wanted to settle the dispute with Karaha in an
\nIndonesian court as the project was subject to Indonesian law.<\/p>\n
\"One of the clauses in the contract stipulates that the
\ngoverning law is Indonesian Law.<\/p>\n
\"Therefore, every dispute must use Indonesian Law,\" he told
\nthe Post.<\/p>\n
Dugan urged Pertamina to honor the arbitration ruling.<\/p>\n
He said that at present Bank of America and Bank of New York
\nhad frozen over $200 million belonging to Pertamina as part of
\nthe effort to recover the damages.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/us-court-rules-pertamina-in-contempt-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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