Bankruptcy petition against Total reaches final stages

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

The ongoing legal battle between Total E&P Indonesie and two of its contractors is nearing an end, with the two sides presenting their concluding remarks on Wednesday.

In the final hearing before a verdict is handed down next Tuesday, Total underlined its position that there were no grounds for the court to proceed with the bankruptcy petition filed against it by the two contractors.

"There is no substantial evidence that supports the suit. Therefore, we ask the court to deny the plaintiffs request and deny the asset preservation order sought by the plaintiffs," Total lawyer Todung Mulya Lubis said at the Jakarta Commercial Court.

He said an audit by the Development Financial Comptroller was "not a legal product and had no execution power".

Lawyers from the firm of OC Kaligis representing the two contractors said Total had overdue debts that it had failed to pay.

"Total must be declared bankrupt because it has failed to pay their debts on time," the lawyers said.

The two contractors, PT Istana Karang Laut (IKL) and PT Sanggar Kaltim Jaya (SKJ), filed a bankruptcy petition against Total on Jan. 14. The petition claimed Total owed some US$3.952 million in compensation to SKJ and $3.178 million to IKL, as found in an audit by the comptroller.

SKJ had been appointed to construct platforms and a gas processing plant at the Tunu gas field, and a pipeline at the Peciko field, both of which supply the PT Badak plant in East Kalimantan.

The two contractors asked the court to issue an asset preservation order for the Tunu and Peciko projects, which legally belong to the state.

Total -- a local affiliate of the world's second-largest gas producer, Total SA -- has refused to pay the demanded compensation. It says it already paid the contractors for their work.

Total has filed a complaint with the Indonesian National Board of Arbitration, claiming it has suffered over $12 million in losses due to delays in the projects.

Referring to the work contract, Total said SKJ, as the contractor, had to bear all losses caused by delays in the construction projects that resulted from the actions of a subcontractor, in this case IKL, or other third parties.