Losers - Stop Press - Pertamina in contempt of court - Brief Article

Business Asia, April, 2002

A US District Court found Indonesia's state oil company Pertamina in contempt for not withdrawing a request to a Jakarta court to halt worldwide enforcement of a US$261 million ($493 million) award. Karaha Bodas Co, owned by Florida's FPL Group Inc and other US shareholders, won the award in arbitration in Switzerland after a dispute over a cancelled Indonesian power project.

Bank of America and Bank of New York have frozen more than US$200 million of Pertamina's assets in New York, as Karaha tries to recover damages. The US court on 29 March ordered Pertamina to withdraw its request to an Indonesian court for an injunction against Karaha to halt worldwide enforcement of the Swiss arbitration award. But Pertamina went ahead, and won an injunction from the Central Jakarta District Court against Karaha plus a US$500,000 a day fine payable to Pertamina.