Total gets pleasant surprise from plaintiff's witness
Total gets pleasant surprise from plaintiff's witness
Fabiola Desy Unidjaja, The Jakarta Post, Jakarta
Total E&P Indonesie's defense in a controversial bankruptcy case
brought against it by former contractors received a boost today
when a witness testified there were no signed agreements between
the subsidiary and a subcontractor.
A witness from the Development Finance Comptroller (BPKP) told
the Commercial Court hearing on Thursday there were no
contractual relations between Total and subcontractor PT Istana
Karang Laut (IKL).
Witness Leonardo Hutahuruk said the contract to construct
platforms and a gas processing plant in Tunu field, East
Kalimantan, was made between Total and contractor PT Sanggar
Kaltim Jaya (SKJ).
"Total knew that IKL was the subcontractor for the project
since both contractors had a different scope of work," the
witness told the hearing.
IKL is the first plaintiff of the bankruptcy petition case
while SKJ is the second plaintiff despite its former position as
Total's main contractor for the project.
Leonardo was a member of the BPKP team assigned to audit the
Tunu oil field project, which is the subject of the dispute
between Total and its two contractors.
In his testimony, Leonardo said that based on the BPKP's
conclusion, Total was obligated to pay some US$3.952 million
compensation to SKJ and $3.178 million to IKL.
Total -- a local affiliation of the world's second largest gas
producer Total SA -- has refused to pay the claims. In the
previous trial, the company asked the court to reject the asset
preservation order as requested by both contractors.
The order would have stopped Total from selling any of its
assets in the country.
Answering Total lawyer's questions on Total's contractual
relations with IKL, Leonardo said he never saw invoices from the
subcontractor addressed to Total.
However, he insisted that during the audit the BPKP team
identified there were certain parts of the project constructed by
IKL.
"Both plaintiffs original demand (of compensation) was $18
million but our findings revealed that the compensation is only
worth $7.131 million," he said.
Lawyer Lelyana Santoso disclosed a number of letters from
Total addressed to the Oil and Gas Upstream Regulatory Agency (BP
Migas), objecting to the audit result since some of the documents
were disputed during the audit.
The documents showed SKJ had failed to complete the project by
the due time and, according to the main contract, should be
penalized for the delay.
"If there were any documents that could change the amount of
the claim, they should have been taken into account," Leonardo
said.
In their defense, the contractors' lawyer OC Kaligis said that
his clients had been invited by Total as separate units during
the out-of-court settlement to end the dispute before the case
was finally submitted to the court.
Total signed a $19 million contract in 2001 with the
contractors. It had paid a total of $25 million in 2003 for
several adjustments made during the construction, or $6 million
more than the amount originally agreed upon.
The case is the first bankruptcy petition against an oil
company in Indonesia.
In 2003, Manulife and Prudential insurance companies were
declared bankrupt by the court.
The trial was adjourned on Monday.