7th Dec 2016 09:11
LONDON (Alliance News) - Churchill Mining PLC on Wednesday said the International Centre for the Settlement of Investment Disputes dismissed Churchill's claims for damages against the Indonesian government and ordered it to pay costs.
The tribunal ordered Churchill to pay a total of USD9.4 million in costs and arbitration tribunal fees.
Churchill said it was requesting annulment of the award through writing to the secretary-general on the grounds that the "tribunal was not property constituted" and "that the tribunal has manifestly exceeded its powers". Churchill also argued there "has been a serious departure from a fundamental rule or procedure" and that "the award has failed to state the reasons on which it is based".
Churchill and the Indonesian government have been locked in a legal battle over Indonesia's decision to revoke Churchill's licences covering its sole asset, the East Kutai coal project. Churchill in the past has said it considered the measures taken by the Indonesian government as "unlawful" and pursued its claim against the country in an attempt to secure USD1.31 billion, plus interest, in damages.
However, on Wednesday, Churchill said the decision was made to dismiss its claims, noting that 34 disputed documents in the case were held to be not authentic. According to Churchill, the tribunal said the forger of disputed documents was "most likely a person or persons acting for or on behalf of Churchill's Indonesian partner the Ridlatama group in collusion with a person inside the East Kutai Regency".
There was no finding that Churchill were involved in any forgery, though the tribunal did rule that Churchill's due diligence investigations conducted at the time of buying the East Kutai coal licenses were "insufficient".
"We are obviously extremely disappointed by the tribunal's decision and the fact that the tribunal drew no adverse inferences against Indonesia following the refusal by [District Head of East Kutai in East Kalimantan] Isran Noor to attend the August 2015 hearing so that he could be cross-examined and the refusals by Indonesia to provide documents that the tribunal itself considered prima facie relevant," said Chairman David Quinlivan.
"While we are still reviewing the reasons, the tribunal appears to have accepted that Noor was deceived into signing the exploitation licenses despite his non-appearance and his witness statement having been struck from the record. Indonesia has always conceded that the EKCP exploitation licenses were validly issued and signed, and it is difficult to understand how the tribunal found otherwise on the evidence available," Quinlivan added.
Shares in Churchill Mining were suspended from trading on Tuesday ahead of the decision. Churchill on Wednesday said that, in light of the USD9.4 million in costs it has been ordered to pay, its shares will continue to be suspended from trading pending clarification of its financial position.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.