Investment Dispute between Churchill Mining Plc and Republic of Indonesia

This paper discusses the investment dispute between Churchill Mining Plc and Republic of Indonesia over the East Kutai Coal Project. It covers the procedural posture, rule choice, legally significant facts, black letter law, and disposition of the case.

Running head: law
LAW

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Table of Contents
Introduction......................................................................................................................................3
Procedural Posture...........................................................................................................................3
Rule Choice.....................................................................................................................................4
Legally Significant Facts.................................................................................................................4
Black Letter Law.............................................................................................................................5
Disposition.......................................................................................................................................5
Reference list...................................................................................................................................7

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Introduction
This paper is based on three nations Indonesia, the United Kingdom and Australia were the
United Kingdom and Australia is the investors in the Indonesian East Kutai Coal Project.
Indonesia was controlling the interest of the investors in this field when Churchill Mining Plc
and Planet Mining Pty Ltd. had interest in the mining industry of Indonesia and they wanted to
invest but this revocation of the licenses of the outside investors in mining made Churchill and
Planet file a request in regards to Arbitration of their investments. These to claimants filed a
request in International Centre for Settlement of Investment Disputes.
Procedural Posture
The procedural history in relation to the documentation of the authenticity stage the tribunal
recalls the procedural steps at the early stage of this particular arbitration. In accordance with the
Decision on Jurisdiction amongst Churchill Mining Plc and Republic of Indonesia a dispute was
found out and it was submitted to International Centre for Settlement of Investment Disputes
(ICSID) based on the agreement which took place between the government of United Kingdom
of Great Britain and Northern Ireland and the government of the Republic of Indonesia in regard
to the Protection and Promotion of the investments dated 27th April 1976 (Setiawati, 2017).
Again on 22nd May 2012, it was found out that Churchill had filed a Request for the Arbitration
with ICSID pursuant to Article 36 of the ICSID Convention and the UK- Indonesia BIT. The
request was in regard to the fact of the dispute that arose in between Churchill and Indonesia in
regard to Churchill's allegation against the investment in the Indonesian companies in the various
coal-mining industry.
On 26th November 2012, a request was filed by Planet Mining Pty Ltd. in regard to the
arbitration with the pursuant of ICSID (Article 36) of the ICSID convention and the Australia-
Indonesia BIT (Sinclair and Repousis, 2017). The Planet also had the same Allegation in regard
to the investment in the Indonesian coal-mining industries and had a great connection with the
Churchill case against Indonesia.

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Rule Choice
Indonesia was bound on developing new investor treaty and they wanted to make sure all the
companies who invested in Indonesia had a proper biodegradable method of dealing with the
mines. So Churchill and Planet faced a problem in regard to their investments in Indonesia so
they filed a request of arbitration against Indonesia (Crockett, 2017).
On 1st March 2013, a join proceeding took place among Churchill, Planet, and Indonesia. But the
court had a disagreement as to whether to provide one joint decision for both Planet and
Churchill or to provide two separate decisions for each of the claimants. The decision was up for
inspection by the Singapore court in August 2014 where a document inspection was done. Both
the parties were allowed to present their case not only based on the laws but also based on the
facts.
Both the parties had been inspected thoroughly and the proceedings were done accordingly. On
26th September 2014 both, the claimants gave their comments on the application done which
opposed the request for an immediate hearing (Kryvoi, 2018).
All these dilemmas were making the Tribunal reconsider their decision about whether to provide
a join award was being considered and they decided on providing separate results. These details
are provided in the Procedural Order No. 1.
Legally Significant Facts
Indonesia disputed the authenticity of 34 documents which were provided by Churchill and
Planet that were given to the Tribunal like the survey licenses, cooperation letters, payment
requests, legality letters, exploration licenses and so on. Indonesia claimed of fraud and
deception in regard to PT Ridlatama Tambang Mineral, PT Ridlatma Trade Powerindo, PT
investment Nusa Persada and PT Investama Resources (Burnett, Beess and Chrostin, 2015). The
respondent commented that the disputed documents consisted of two sets of identical signatures
of Mr. Ishak (as Governor and Regent), the other set of identical signatures of Mr. Noor and Mr.
Bambang Setiawan. They also claimed that the signature of Mr. Ishak was pasted from the PT

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RP Survey License. According to the respondent, it was notified that document nos. 1 to 18
bared the identical signatures of Mr. Ishak as a Regent of East Kutai and from documents 19 to
24 as the governor of East Kalimantan.
In this regard, the claimants rigorously failed to prove that these documents were authentic
where Indonesia spotted out the disputes. The claimants did not address the hearing based on the
authentication of the documents (Hodgson, 2016). The forgery of Mr. Ishak’s signature became a
huge issue. The documents which were borrowed for use was also forged and Indonesia proved it
and provided sufficient evidence in that regard.
Black Letter Law
The most of the proceedings and hearings of the case were done in the court of Singapore. Both
the claimants had to follow the burden and standard of proof as a rule. They had to prove their
claims to be right or wrong according to the respondent’s challenges (Ali, A. H, and Sainati,
2016).
The tribunal relied on Article 42 of the ICSID Convention which stated that rules of the law need
to be agreed by both parties and if they are disagreeing then the law of Contracting State needs to
be followed by the Tribunal. As both the parties here did not agree so it was necessary for the
Tribunal to determine where the issue which was established was subject to international or
national law.
Disposition
After a thorough assessment of the allegations of forgery and fraudulent scheme of the claimants
by the respondent was done and based on that the court world provides its judgment and declare
the legal consequences (Ahmad, 2016). The position of the parties will be assessed and decided
before being presented to the Tribunal.
The decision that was awarded by the court after through assessment the claimants lost the case
dated 24th February 2014. The 34 documents were not authentic, the arbitration brought in by the
claimants was not admissible. It was ordered by the court to bear 75% of the expenses of the

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respondent in regard to the proceedings which was around $8,646,528. The claimants also had to
bear the expenses and fees of the Tribunal as ICSID’s fees.

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Reference list
Ahmad, J. (2018). Complicity in Forgery and Investor Due Diligence over Local Partners. The
Journal of World Investment & Trade, 19(2), 293-304.
Ali, A. H., & Sainati, T. E. (2016). Adverse Inferences: A Proposed Methodology in the Light of
Investment Arbitrations Involving Middle Eastern States. BCDR International
Arbitration Review, 3(2), 293-325.
Burnett, H. G., & Beess und Chrostin, J. (2015). Interim Measures in Response to the Criminal
Prosecution of Corporations and Their Employees by Host State in Parallel with
Investment Arbitration Proceedings. Md. J. Int'l L., 30, 31.
Crockett, A. (2017). The Termination of Indonesia’s BITs: Changing the Bathwater, But
Keeping the Baby?. The Journal of World Investment & Trade, 18(5-6), 836-857.
Hodgson, M. (2016). Churchill Mining PLC and the Planet Mining Pty Ltd v Republic of
Indonesia: Procedural Order No 15: Reconsideration under the ICSID Convention: No
Award Required. ICSID Review-Foreign Investment Law Journal, 31(1), 114-121.
Kryvoi, Y. (2018). ECONOMIC CRIMES IN INTERNATIONAL INVESTMENT
LAW. International & Comparative Law Quarterly, 1-29.
Setiawati, W. (2018). The risk of joining the Trans-Pacific partnership for Indonesia: An
investment perspective. In Law and Justice in a Globalized World (Vol. 157, No. 165, pp.
157-165). ROUTLEDGE in association with GSE Research.
Sinclair, A. C., & Repousis, O. G. (2017). An Overview of Provisional Measures in ICSID
Proceedings. ICSID Review-Foreign Investment Law Journal, 32(2), 431-446.