East Kutai ready to fight against Churchill's lawsuit

Oleh Sutan Eries Adlin, Hadijah Alaydrus
Senin, 18 Juni 2012 | 11:40 WIB

JAKARTA—The municipal government of East Kutai refused to have negotiation as it is ready to face lawsuit filed by Churchill Minning Plc, an UK-based mining company, in International Center For Settlement of Investment Disputes (ICSID) in Washington.

East Kutai Regent Isran Noor confirmed he has studied the lawsuit of Churchill Minning, East Kutai regency saw the UK-based miner's step has no legal basis.

"We have prepared supporting data to fight the lawsuit, government in this case also supports the coordination meeting with relevant agencies, " Isran said in a press release to Bisnis, Sunday (17/6).

Isran insisted that there was never a British company named Churchill Mining Plc which will invest in the coal sector in its administrative region.

According to him, there is only Ridlatama group, the holders of the mining license for coal mines which has been revoked by the government of East Kutai.  Apparently, later Churchill holds 75% shares in the project.

"In our opinion, Churchill was never there. That there was Ridlatama, but their mining permits have been revoked. Churchill acquired Ridlatama secretly, it is illegal. While mining permit [IUP] can not be owned by foreign investors, as they can only hold PKP2B and KK, " he said.

According to the attorney of East Kutai government, Didi Darmawan, regent has sent a letter asking about Churchill's ownership in Ridlatama. At that time, Ridlatama Group said 100% of the mining license was owned by local.

Churchill Mining saw the revocation of four mining permits as a confiscation of property and an inequality in investment between foreign and local investors. "However, the arbitrase which has been filed by them does not give any details and evidence of the ownership on the fours mining licenses," said Didi.

Previously through a variety of reports in the international mass media Churchill Mining said that it had bought 75% shares from Ridlatama Group which had 4 Mining Licenses in East Kutai.

However, according to Didi, the management of Ridlatama Group in a letter of response to the Regent of East Kutai said Churchill Mining is just acting as the Master Services Agreement.

"So Churchill is just a partner providing mining service only, the news that had globally circulated has unbalance information, we regret it," he said.

According to Didi, the reason why East Kutai Regent revoked four mining license (IUP KP) is very strong, which is a violation on investigation audit of Indonesia Financial Audit Board and the recommendation of the Minister of Forestry.

"Against this revoke, Ridlatama filed a lawsuit to administrative court [PTTUN] which has been declared lost and the court decided East Kutai as the winner. Likewise at the appeals court and Supreme Court, Regency of East Kutai has been declared as the winner and has power of force." (T03/aph)

http://www.bisnis.com/articles/east-kutai-ready-to-fight-against-churchills-lawsuit