Indonesia Wins Arbitration Lawsuit, Saves Rp6.68tn

TEMPO.CO, Jakarta - The Indonesian government has won the arbitration lawsuit lodged by the Indian Metal and Alloys Limited (IMFA). The ruling was announced after a series of legal proceedings that lasted since August 2018 in Den Haag, the Netherlands.

The international arbitration court rejected the IMFA’s claims and ordered it to return costs incurred during the arbitration proceedings to the Indonesian government, which amounted to US$2.97 million and GBP361,247.23.

"This success has been achieved through a long way. By that, Indonesia has saved state funds of 469 million dollars or around Rp6.68 trillion," said Attorney General M. Prasetyo in his office, South Jakarta on Monday, April 1.

The Arbitrator Assembly, Prasetyo said, accepted Indonesia's rebuttal on the temporal objection, which basically stated that overlapping and territorial boundary issues had occurred long before IMFA entered as an investor in the country. So if IMFA had conducted proper due diligence, they would have known the problem in question. Therefore, Indonesia as the host could not be charged for the investors’ negligence. 

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"The lawsuit filed by the IMFA against the Indonesian government on July 24, 2015, argued that there was an overlap of Mining Business Permits owned by PT SRI with seven other companies due to unclear area boundary problems," Prasetyo explained.

The IMFA then claimed that Indonesia had violated the India-Indonesia bilateral investment treaty (BIT) and demanded a compensation of US$469 million or around Rp6.68 trillion.

Prasetyo explained the victory was made possible thanks to the success of the integrated team assembled by President Joko “Jokowi” Widodo after the lawsuit was filed, which comprised Vice President Jusuf Kalla, the Attorney General's Office, the SOE Minister, the Finance Minister, and the Presidential Chief of Staff.

ANDITA RAHMA