Lessons from the $2 billion coal mining lawsuit against Indonesia
Indonesia cannot be held liable for $2 billion in compensation sought by Churchill Mining for the revocation of a coal-mining concession, the World Bank’s International Centre for Settlement of Investment Disputes ruled in a Dec. 6 verdict. The tribunal determined that Churchill’s claim to the mine site — and therefore its case against Indonesia — was based on forged documents. The London-registered mining firm, and its Australian subsidiary Planet Mining Pty., filed the case after local officials revoked the company’s license to mine coal in the East Kutai district in Indonesian Borneo. The ruling was a rare win for a nation-state in an international arbitration hearing, a forum critics complain is often stacked in favor of multinational corporations. In addition to throwing out Churchill’s compensation claim, the tribunal also ordered the company to reimburse Indonesia for 75 percent of the $12.3 million dollars in legal expenses and court fees the country incurred over the course of the four-and-a-half-year arbitration process. “We are obviously extremely disappointed by the Tribunal’s decision,” Churchill Chairman David Quinlivan said in a Dec. 7 press statement, adding that the company plans to challenge the ruling. Churchill itself was not judged to be responsible for the forgeries, but the tribunal criticized the company for failing to conduct adequate due diligence regarding claims made by its local partner, PT Ridlatama.
