U.S. court upholds freeze on Pertamina accounts

U.S. court upholds freeze on Pertamina accounts

Agence France-Presse, Jakarta

A U.S. appeals court has upheld a freeze on nearly US$275
million in trust accounts of Indonesia's state-owned oil and gas
firm, Pertamina, a statement received here Thursday said.

In a statement issued from New York, U.S.-controlled power
firm Karaha Bodas Co. (KBC) said it had originally restrained
more than $520 million in Pertamina trust accounts in an attempt
to secure payment on a $261 million award made by an
international arbitration panel.

"By maintaining the freeze, the court has provided KBC with a
clear path to secure fair and final payment," Christopher Dugan,
KBC's chief litigator, said in the statement.

By endorsing the freeze on assets, the court denied a motion
by the Indonesian government to release 95 percent of the frozen
funds, KBC said.

Appeals to determine the final disposition of the contested
assets will be heard before the appeals court in August, said the
Cayman Islands firm which is primarily owned by Florida Light and
Power and Caithness Energy of New York.

Wednesday's ruling is the latest in a series of what KBC
describes as legal victories in its efforts to secure payment for
damages awarded by Swiss arbitrators in December 2000 over a
suspended power project.

KBC said it had invested more than $100 million in developing
a geothermal project suspended by Indonesia in 1998 at the height
of the economic crisis.

Pertamina has said the Indonesian government, not the oil
company, suspended the project and that the dispute between the
two sides should be settled under Indonesian law.

In April Pertamina obtained a Jakarta district court
injunction to prevent KBC from recovering its damage award,
prompting a court in Houston, Texas, to declare Pertamina in
contempt.