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LONDON (Alliance News) - Churchill Mining PLC Wednesday said the government of Indonesia has failed to respond to a letter sent by the company's lawyers concerning the ongoing arbitration being handled by the International Centre for the Settlement of Investment Disputes.
Last week, the company said the Indonesian government had failed to make its latest advanced payment to cover the costs incurred by the ICSID for investigating and handling the case between the two parties, which led Churchill to cover the government's costs plus its own to ensure the case continues.
That meant Churchill's latest USD200,000 payment to the ICSID was doubled to USD400,000 to cover the government's equal share.
As the government did not pay its costs, Churchill said it had taken it as a sign that Indonesia may no longer wish to participate in the arbitration, but said it would send a latter to confirm this suspicion.
However, Churchill said on Wednesday that the government has failed to respond to that letter within the desired timeframe.
As a result, Churchill has now lodged an application to the ICSID requesting the tribunal continues to deal with the ongoing case to ensure a final decision is made and to issue a procedural order that Indonesia provides a written explanation for its default on the latest payment within 14 days.
Under that application, Churchill has asked for leave to file a request for "programming orders" if Indonesia fails to provide an explanation within that timeframe. Churchill said it has also reserved all rights, including but not limited to, as to costs.
"Despite our express request, Indonesia has now failed to confirm that it is still participating in the arbitration. Indonesia's continued silence suggests that it may have decided to withdraw from the arbitration proceedings," said Churchill Chairman David Quinlivan on Wednesday.
"While there is still time for Indonesia to re-appear in the arbitration, if it does not do so that will not stop the arbitration. Churchill remains committed to the resolution of its dispute with Indonesia through the ICSID process and will do whatever has to be done to ensure that the arbitration progresses to its natural conclusion," he added.
Churchill is hoping, regardless of the government's participation, that it can win its case and reclaim the payments made to the ICSID from the Indonesian government as a result.
Churchill and the government are arguing over the country's decision to revoke the company's licences covering its sole asset, the East Kutai coal project. Churchill considers the measures taken by the Indonesian government as "unlawful" and is pursuing its claim against the country in an attempt to secure USD1.31 billion, plus interest, in damages.
The Indonesian government has previously claimed that the licences covering the project were never owned by Churchill or its partner, saying the documents related to the licences were forged and that the areas of land covered by the licences were, at all times, owned by companies belonging to the Nusantara Group, an Indonesian firm that is involved in numerous infrastructure projects in the country.
Churchill shares were up 3.3% to 23.50 pence per share on Wednesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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