- On 29 March 2019, the Tribunal of the Permanent Court of Arbitration (“PCA”) finally rendered a decision in favor of the Indonesian Government against Indian Metal Ferro & Alloys Limited (“IMFA”). This has ultimately saved Indonesia from having to defend itself against a USD 469 million lawsuit.
- The dispute was triggered when a number of overlapping mining licenses which were in the possession of PT SRI, the local partner of IMFA in Indonesia, were discovered. In essence, the Mining License for Operation Production (“IUP-OP”) which was in the possession of PT SRI and which was issued by the Indonesian Government on 31 December 2009 was found to overlap with licenses held by seven other mining companies.
- As a result of this problem, IMFA filed a lawsuit at the PCA on 24 July 2015 based on the Indonesia - India Bilateral Investment Treaty 1999. However, the PCA Tribunal ultimately decided that PT SRI had known about the overlapping issue since the general exploration phase back in 2005 and the fact that IMFA didn’t pick up on this problem was primarily due to a lack of proper due diligence.
- Although Indonesia has now managed to dodge this potentially huge lawsuit, the Indonesian Government is being urged to improve its mining license processing so as to ensure that no more overlapping licenses are issued in the country.
- For more on this story, see: “Pelajaran dari Kemenangan Indonesia atas Gugatan Arbitrase IMFA”.
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