Karaha Bodas Co LLC v Pertamina FACV 6-2008
4. In November 1994, the respondent (“KBC”) entered into contracts with the appellant (“Pertamina”) and PT PLN (Persero) (“PLN”) for the exploration and development of geothermal energy in West Java. The project was halted by an Indonesian Presidential Decree dated 10 January 1998. This led to an arbitration between the parties resulting in December 2000 in an award of damages (“the Award”) in favour of KBC in the sums of US$111.1 million for wasted expenditure and US$150 million for loss of future profits. Since then, Pertamina, whose assets have been targeted, has been litigating in numerous jurisdictions with a view to setting aside the Award or resisting its enforcement.
5. KBC obtained leave to enforce the Award in Hong Kong by order of Burrell J dated 15 March 2002. Pertamina’s application to set that order aside was refused by his Lordship on 27 March 2003.1 After a hiatus agreed upon by the parties, Pertamina’s appeal came before the Court of Appeal in September 2007 and was dismissed on 9 October 2007.2 Leave to appeal to this Court was granted by Court of Appeal on 18 March 2008.
6. In the Court of Appeal, Pertamina sought to introduce as a new ground for resisting enforcement the allegation that the Award had been obtained by fraud (“the fraud argument”). This had not previously been raised, Pertamina’s explanation for this being that it had not been aware until August 2005 of certain documents created by persons in the KBC camp which, it contended, show the existence of fraud. It sought leave to introduce ten such documents as fresh evidence with a view to persuading the Court of Appeal that a sufficient case was made out to warrant the question of fraud to be remitted for trial by the Judge at first instance.