Before the project

Before the project

Oct. 2, 1990: PT Manggala Pratama owned by Tantyo Sudharmono
expresses its interest in participating in the geothermal
business.
June 16, 1993: Pertamina asks PT Manggala about the follow-up to
its proposal. PT Manggala responds that it has transferred all
responsibility on geothermal interests to PT Sumarah Dayasakti.
Sept. 30, 1993: PT Sumarah presents Pertamina with an improved
proposal with a copy of a memorandum of understanding (MOU)
between PT Sumarah and SCOTIA Geothermal.
March 23,1994: PT Sumarah informs Pertamina that it will partner
with Magma Power Company to develop Karaha.
Oct. 13 1994: PT Sumarah signs an MOU with Caithness Resources,
which replaces Magma Power, and forms Java Geothermal Company.
Oct. 17 1994: PT Sumarah informs Pertamina that it has changed
its foreign partner from Magma Power to Caithness.
Nov. 9 1994: PT Sumarah, Java Geothermal and Duval Corp. sign a
joint venture agreement and establish PT Karaha Bodas Company
(KBC).
Later, Caithness Energy sells some of its KBC shares to Florida
Power & Light, thus KBC's shareholders are Caithness Energy
(40.5%), Florida Power & Light (40.5%), Tomen Corp of Japan (9%)
and PT Sumarah (10%).
Dec. 2 1994: KBC signs a joint operation contract (JOC) with
Pertamina, and an energy sales contract (ESC) with Pertamina and
PLN.

During the project
May 1995: KBC starts operation in Indonesia, opening offices,
conducting an environmental impact study, building access roads
to the location, and conducting surface exploration.
Nov. 2, 1995 to Aug, 28, 1997: KBC drills 15 core hole wells in
Karaha and four in Lake Bodas areas, and six standard wells in
Karaha. Of the six wells, only two are considered commercial.
Sept. 20, 1997: Following a recommendation from the International
Monetary Fund (IMF), the Indonesian government issues
Presidential Decree (Keppres) No. 39 that postpones the
construction of a number of infrastructure projects, including
Karaha Bodas.
Oct. 14 1997: Pertamina holds a meeting with KBC and other energy
investors to get their input following the issuance of Keppres
39. Following the meeting, Pertamina and PLN recommends that the
government allow geothermal projects to resume operation.
Nov. 1, 1997: The government issues Keppres No. 47, allowing a
number of postponed infrastructure projects, including Karaha
Bodas, to resume construction.
Jan. 10, 1998: Following pressures from the IMF, the government
issues Keppres No. 5 that revokes Keppres No. 47.
Jan. 13 1998: KBC asks Pertamina to demand that the government
allow KBC to continue with the geothermal power plant project.
Jan, 23, 1998: KBC reports to Pertamina concerning the
consequences of the Keppres.
Feb. 10, 1998: KBC declares force majeure as a result of a
government related event (Keppres).
March 6, 1998: PLN asks all parties in the Karaha Bodas project,
including Pertamina and KBC, to abide by the Keppres and stop the
project.
April 30, 1998: KBC files a case with the Geneva-based UNCITRAL
international arbitration court against Pertamina, PLN and the
Indonesian government, for breach of contracts.

Legal battle
June 2, 1998: KBC through its lawyer informs Pertamina that it
has asked UNCITRAL in Geneva to appoint an arbiter for Pertamina,
PLN and the Indonesian government, due to lack of response from
the latter.
Nov. 19, 1998: first hearing in Geneva
May 31, 1999: second hearing held in Paris, with a main agenda of
hearing court decisions concerning procedural matters.
Dec. 18, 2000: final arbitration award, with the court declaring
that Pertamina in breach of the joint operations contract and
energy sales contract (ESC), and PLN in breach of the ESC. The
court orders Pertamina and PLN together to pay KBC US$111.1
million for its expenditure loss, and $150 million for loss of
future potential profit from the project, with 4 percent interest
per annum starting 1 Jan 2001.

Following the arbitration award, KBC files cases in various
courts around the world, including United States, Canada, Hong
Kong and Singapore, asking them to confirm the arbitration ruling
and confiscate Pertamina's assets in those countries.

Pertamina and PLN file a case with the Swiss Federal Supreme
Court to annul the arbitration ruling, but to no avail because
they fail to pay proceedings costs on time.
Dec. 4, 2001: Houston Court issues a summary judgment, confirming
the arbitration ruling.
Jan. 4, 2002: Pertamina files an appeal with the Fifth Circuit
Court in New Orleans against the Houston Court decision.
Feb. 22, 2002: KBC brings the execution of Pertamina's assets to
banks in New York.
March 14, 2002: Pertamina files a case at the Central Jakarta
District Court, asking the court to prevent KBC from executing
its assets around the world
April 1, 2002: the Central Jakarta District Court issues a
provisional ruling that asks KBC not to execute Pertamina's
assets based on a decision from a U.S. court.
April 2, 2002: the Houston Court tells Pertamina to file a
withdrawal of the Central Jakarta District Court's provisional
ruling.
April 8, 2002: Pertamina asks the Central Jakarta District Court
to annul the provisional ruling.
May 23, 2002: Hong Kong court confirms arbitration ruling.
May 29, 2002: Singapore court confirms arbitration ruling
Aug. 27, 2002: The Central Jakarta District Court annuls the
international arbitration ruling.
September 2002: KBC files an appeal with the Indonesian Supreme
Court
March 8, 2004: The Indonesian Supreme Court rules that the
Central Jakarta District Court has no authority to fulfill
Pertamina's demand to annul the arbitration ruling.
March 23, 2004: The Fifth Circuit Appeal Court rejects
Pertamina's appeal against the Houston Court's ruling.
Oct. 6, 2004: New York Court asks banks to disburse $US29 million
of Pertamina's frozen money at New York banks to KBC.
Oct. 22, 2004: New York Court orders Bank of America to disburse
the remaining US$271 million frozen fund to KBC.
Nov. 22, 2004: the Indonesian government files an appeal to the
U.S. Supreme Court, saying that the money (US$271) belongs to the
Indonesian government, not Pertamina.

from various sources