Experience Handling Arbitration Case in Indonesia

I have experienced handling Arbitration Case at the Indonesian National Board of Arbitration ( BANI) in Jakarta, Indonesia. At one time my Law Firm was representing one of our Clients who was involved in the Oil and Gas Sectors at BANI in which my Client was claimed to pay for a certain amount of monies, by a drilling Contractor. Such experience was very interesting for me as the Partner of my Law Firm Suleiman Agung & Co, since the condition of defending our Clients interest in this Arbitration Board is totally different than handling a case in the Indonesian Court.

The most different part is because in Arbitration proceedings the conditions are very informal, where the Arbitrators consists of 3 members, whereby 2 arbitrators were each chosen by each Party from the list of arbitrators available in the list provided by BANI. The 2 Arbitrators shall then select 1 arbitrator who shall act as the empire of such Board of Arbitration. The Arbitration fee is being paid upfront by the Party who is applying for such Arbitration Proceedings, and will be adjusted accordingly to be shared by both Parties pursuant to the rules under the BANI ruling, depending on the Award of such Arbitration. We experienced that in practice, BANI may only proceed the Arbitration Cession, if the full Arbitration Fee had been made by the Party who request such Arbitration to take place.

Before the Arbitrations proceeding commence, we experienced that the Arbitrators will informed both Parties that the most significant element in handling this case is, processed through a fair arbitration proceeding, where both Parties are being given the same chances and opportunities to represent their argumentation, and mutual solution shall be strive to settle the differences between the disputing Parties through this Arbitration Proceedings.

In practice, each Party shall not only just launch their argumentation in writing, but may also be granted the chance to orally represents their argumentation. In my view, this is a significant difference compared to handling civil cases in the Indonesian Court, where only written argumentation can be submitted by each Party, during the Court Proceedings, and the time for launching oral argumentation is only given during the stage of submission of evidence by each Party.

The surroundings or place of such Arbitration during the arbitration proceedings is also not too formal, as we experienced in a Court Cessions. Thus, such condition really helps establishing a friendly environment of arbitration proceedings, and shows more of a meeting cession.

During such Arbitration Proceedings if there appears to be a dead lock or stagnant, the Board of Arbitrators shall act as a middleman, trying to seek out a way for the Parties to reached a win and win situation. If the Parties failed to reach such settlement, the Arbitrators will then remind the Parties that the Arbitrators may make its decision according to their perception of the case, which may end up the feelings of loosing and winning by a Party.

Frequently, in order for the Parties to cool down, if the tension rises, there will be a break of time, before the proceeding continues and emerged into a dead lock situation.

Well, at the end of the day, I may say that based on my above experience, the forum through the Indonesian National Board of Arbitration (BANI) appears to be a good and attractive alternative solution for the Parties who entered a Business Transactions in Indonesia, in choosing a forum to handle and settle disputes between the Parties, if such event occurred.

This is based on our Law Firm and or Senior Partner's experience of this Law Firm of Suleiman Agung & Co, where the process, which resulted in an Arbitration Award, is satisfactory to both Parties or close to a win-win situation. And as a business man who seeks and try to maintain good long term business relationships, we believe that there must always be a room to negotiate and settle differences, and avoid selfishness and greediness in conducting business, in other words we have to honour honesty, integrity and fairness in conducting our day to day business.

Cheers April 30, 2009

Agung Supomo Suleiman

Partner of Law Firm Suleiman Agung & Co

HP 0816830647

This is also Published in ALLVOICES GLOBAL MEDIA

Law Firm Blog: http://www.sacolaw.blogspot.com

Email: agungsacolaw@telkom.net

Oil and Gas Contracts and legal works

During my experience in running my Law Firm which now is called Suleiman Agung & Co, there are many experiences involving legal works relating to Oil & Gas. When I started in June 1, 1998, I started my office from my home at Cipete, South of Jakarta. After around 3 months I got legal works from an Oil Company who has returned its Contract Area /Block to the Indonesian Government.

For such purpose I had been requested to give them legal advices as to what are the procedures required to be completed, and ask my law firm to conduct, research and legal due diligence on their documents including reseraching with the relevant authorities, as to what are the steps that must be taken. Based on such request I made such legal research and legal due diligence, and provide my Client with the legal advices and legal services.

For my legal services rendered, my Law Firm received legal fees, for which I then moved to a certain office building where I had shared space with my friend who was renting office space and offered me a space to be shared. I then obtained another retainer arrangement with an Oil and Gas Company who retained my Law Firm for 1 year.

It was really interesting. My Client is actually the holding company, which I was requested among others to review and look at their Production Sharing Agreements (PSC) and Technical Assistance Agreement (TAC) and assisting and accompanying them in meetings and negotiations in their efforts to reschedule their financing/ loan agreement. Well, related to the Production Sharing Contracts, it is really interesting because there are several types of Oil and Gas Contracts between the Government of Indonesia and the Oil and Gas Contracts, among others PSC, TAC, Enhance Oil Recovery(EOR), PSC-JOB ( Joint Operating Body).

One of the interesting part in drafting and reviewing such Oil and Gas Contracts, is the history surrounding such oil and gas activities, where according to the geologies, such oil and gas products was actually originated from fossils and plankton of animals, plants which was buried deep down in the earth, through process of over more than 350 Years, where the pressure is very high and the temperature is very high, which changed them to become oil and gas and are being trapped or deposited in a reservoir deep below the earth.

Amazing and really interesting isn't it? The risk in the oil a gas industry is very high, because you may find that after spending huge amount of monies, you may end up in finding a dry hole. And there are also risks exposure such as blow-out which is a kick of high pressure to the well head which could not be controlled, and shall then cause a blow out which could collapse the Drilling Rig, and even cause a crater, after such blow-out occurred. Of course there is the Blow Out Preventer ( BOP), but, this Blow Out, which is beyond the capacity of the BOP can occur. Thus the liabilities and financial exposure is really huge.

Since the risk is very high, the Government Of Indonesia’s policy is to shift the risk to Oil and Gas Contractors. After commercial production is declared by the Government, which right now is BP Migas, together with the Oil and Gas Contractors, then if such field or portion of the Contract Area is decided to be developed for production, then all the prior expenses which was incurred by the Contractor will be recovered by the Government in this case represented by BP Migas.

Thus the philosophy adopted by the GOI, is that such cost recovery is made by the Government of Indonesia ("GOI) "not" with cash and fresh monies, but through the oil and gas products produced from such Contract Area, field or portion of the Contract Area which had been declared commercially production. If no commercial oil or gas is made, then the risk of spending the monies or sinking fund is solely borne by the Oil and Gas Contractor, and not by the GOI, accordingly the GOI will not make any cost recovery upon the costs and expenses incurred by the Oil and Gas Contractor.

We should also note that, under the concept under the Indonesian Constitution Law, the Oil and Gas deposits are owned by the whole people of the Republic of Indonesia, and is totally different with the concept of a country which allows individual to own such oil and gas deposits which lays below their individual land property. Since the oil and gas reservoir and deposits which are under the ground is owned by the whole people of the Republic of Indonesia, the Government then has the full responsibility and obligation to ensure that the social welfare of the whole people of the Republic of Indonesia is guaranteed from such oil and gas reservoir and assets.

Formerly Pertamina, was being established, by Law No.8 Year 1971, as the proxy of the oil and gas authority mining rights, granted by the people, but now this concept had been changed where Pertamina is changed and become a PT Pertamina (Persero), which has the same status as Oil and Gas Contractors like other Oil and Gas Contractors, but this PT Pertamina (Persero) is 100 % owned by the State.

As we then realized, the GOI, who has the obligation and responsibilities to manage the social welfare of the whole people of Indonesia, based on the Indonesian Basic Constitutions Article 33 paragraph 3 Basic Law 1945 and its amendments, really needs the sources of revenue, which until know, the main resource is still depending on the oil and gas assets. Such resources from the oil and gas from the whole Area of the Republic of Indonesia, is then considered as the resources to fill in be the Governments Yearly Income and Budgets Program, which usually is made based on a 5 Year Plan, but every year the Government has to make report to the Indonesian Peoples Parlement (MPR and DPR).

Thus to make sure that GOI is guaranteed to get the portion of the Oil and Gas produced from the whole Contract Area located within the Whole Oil and Gas Territory of the Republic of Indonesia, then for each Contract Area under the PSC, TAC, PSC JOB, EOR, there is always a First Tranche Petroleum ( FTP) mechanism, built in such contracts, which means that on the Current Year before cost recovery is made to the costs and expenses incurred by such Oil and Gas Contractors, after commercial production has been declared by the Government of Indonesia represented by BP Migas ( a State Regulatory Body in Oil and Gas), and production is to take place, 20% of the Total Oil and Gas produced from such Contract Area has to be allocated aside to fill in the Yearly Government Income and Budget Program.

This FTP is split between the GOI and the Contractor in proportion to their split equity portion as been mutually agreed in their PSC. Besides this FTP there is also a Domestic Market Obligation (DMO) imposed to the Oil and Gas Contractors, where a certain formula is established under the PSC, TAC, EOR, PSC -JOB, where in essence based on the latest Oil and Gas Law including the Decision from the Constitutional Court, such DMO is 25% of the Oil and Gas Contractors portion of the Crude Oil produced in the current Year.

Well the above are some of the legal aspects which my Law Firm and I am involved in giving legal advises to our Oil and Gas Contracts. If some of you readers needs some legal advises and assistance from my Law Firm of Suleiman Agung & Co, please do not hesitate to contact me as the Senior Partner of this firm through my Mobile phone 0816830647 or my email agungsacolaw@telkom.net or agungsuleiman@gmail If you wish to put your advertisement of your products or services we will be happy to offer you as space for your ads in our website of http://www.agungssuleiman.blogspot.com

Agung Supomo Suleiman September 20, 2008

Sunday

Drafting Contracts Related To Coal Mining Activities

When you draft Contracts, you have to make sure that the parties are clear, and the object of the agreements are also clear. Under the Indonesian Law, parties of the Contract has the freedom to make and develop and incoporate whatever terms and conditions of their contracts, subject however, that the contents must not violate the laws and the public order. The surroundings, circumstances and conditions of the parties shall have great influence in drafting contracts. It really depends on the nature and situation where the parties are involved and situated. The Indonesian Civil Code actually is just a supplement to the terms and conditions entered and agreed by the parties. For instances if you are involved in a Coal Mining Activites, there are some rulings issued by the Directorate General of Coal Mining; Our experience in assisting Clients related to Coal Mining Activites, among others are that we are requested to assist our Client in drafting the Loan and Fiduciary Deeds. Our Client is actually Coal Trader, in which their Customers who are purchasing the Coal Products, form our Client, are Power Plant Industries, outside of Indonesia, among others China, who requires Coal Products to generate their Plants, to run the Industries which are booming in China. Our Client, who is a Coal trader is willing to assist in financing Coal Mining Companies in Indonesia, usually located in Kalimantan Island, in Indonesia, who needs some financing to develop their infrustructures, among others their Coal Plant Facilites to produce the coal, their jetties. The payment of such loan by the Coal Mining Companies to our Client are through selling the Coal Products to our Client. In this case our Law Firm Suleiman Agung & Co will assist our Clients by checking the legal documentations involved in such transactions from reviewing the legal documentation of such Coal Mining Companies such as their Coal Mining Licensces, their Agreements with the Government, drafting the Loan or Financing Agreement, including its Collateral / Fiducia Documents, and registering such Fiducia Deeds with the Fiduciary Office in Indonesia, of course advising our Clients on the rules and laws involved and governing such transaction and coal mining activities. Accordingly, readers who are involved in the Coal Mining Transactions including its financing transaction who seeks for legal assistance may contact our Law Firm Suleiman Agung & Co, Mobile Phone HP 0816830647. For those who are interested in putting advertisement relating to their products and services related to such Coal Mining Activities may put their ads as shown in our website.

Hoping that the above information will be usefull and beneficial to all of you.

Wednesday, September 17, 2008

Agung Supomo Suleiman SH. Senior Partner Law Firm Suleiman Agung & Co

http://www.sacolaw.blogspot.com email: agungsacolaw@telkom.net

agungsuleiman@gmail.com

Milestone

I feel that I am in a milestone stage, where I feel that I am in a rather strange situation. I don't know why? I feel that I have worked for more then 28 years, and I feel like I need a break. Why is it like that. Maybe it is because almost everyday, in reality, I am always buried with my work. I think I need to rest for a while, and take a break. Eventually, since I am in Grand Wijaya from January 2008, it appears, that there is no time for me to take a rest. Thus I really feel fatigue. The most enjoyable time that I can feel, is when in the early morning, after I said my subuh prayer, I walked together with my wife, seeking for fresh air and walk within the surroundings area of Cipete, South of Jakarta,where I live. The air is clean and fresh, and together with my wife, we can feel the freshness and cool air and weather which we can inhale. It feels so good, and I really enjoyed it. On the way, we can watch many types of plants, with green leaves and colorful flowers. These are all the signs of the greatness of ALLAH the Creator of the plants, which are created by God for the benefits of human beings pursuant to the contents of the Holy Al Quran. We usually walked for about 1 hour. By walking, our body feels good, probably due to the circulation of the blood, since when you are walking, your heart beat starts pumping, which also works together with the clean air inhale by us containing oxigen which is also good for our lungs. By walking, it can also refresh your mind, since you go out from your house and watch the conditions and view outside your house. Well walking is also good for our body, because your feet are moving, and most part of your body is also in action, and that is really good for your body movement. Well, I am not a doctor, but I think walking is very good for keeping your body in action, especially, early in the morning when the air are still clean and fresh. That is all what I have to say this evening, since I also need to take a rest. Monday, July 14, 2008 at 23.20 hours.

Experiencing Practicing Own Law Firm for 10 Years

Well I am back at the office from the Central Court Of Jakarta, where I had tried to submit letter to inquire whether a certain company is involved in court cases in Central Jakarta either, in the civil case and criminal case and bancruptcy case. I was requested to bring the original Power of Attorney and also the Articles of Association of such respective Companies. Based on such information I shall report to my Client accordingly. Our task is conducting certain legal due diligence, for which purpose, we have to collect data including data concerning the litigation involvement of such Company. Well, those are some of my legal works that recently my Firm is involved, and I think I have to find another legal works for the sake of maintaining the continuity of our firms' cash flow. I was already experiencing for nearly 10 years since 1 June 1998, practicing as an independent lawyer and also running our own boutique law firm. It is really fun and exiting since you newer, can now as to what type of Clients maybe contacting you and requesting for our legal assistance. Usually our potential Client will contact us and represent their case or legal issues which they feel, they need some legal assistance from our Firm. They will then normally ask for our Company's Profile and also our legal fee arrangement for handling the legal matters that they require us to be involve. Well, usually it will take some time waiting for their response, to our legal fee proposal. So this really depends, on the situation and circumstance, which is faced by our customers or potential Clients. Sometimes we feel, as if we are riding a roller coaster, since our cash flow is not certain, sometimes up sometimes down. These experience will goes on and on, where, sometimes we did not realize that, it has already been 5 months from January 2008 that we have stayed in this new rental building Located at Grand Wijaya Centre on the 4th Floor. Times goes by, very fast, from day to day, week to week, and month to month, without us realizing how rapid the time goes by. Well, I think I have to stop writing since I have to go back concentrating and focusing on the pending legal matters that I have to complete. See you readers, Chiao and good luck Hours 14.40 Thursday, 15 May 2008 Agung Supomo Suleiman Senior Partner Suleiman Agung & Co

Freedom & Independent

I really enjoy being Freedom & independent. It feels really good especially in my heart, since I can say and express whatever ideas and experimental spiritual experience which I can do with the Permit of ALLAH The ALL Mighty, as well as mental experience, by setting up my own vehicle or Law Firm by the name of Suleiman Agung & Co(SA&Co) as been permitted and allowed by ALLAH the Great and Only Creator of this Universe that we are allowed to be part of such beautiful live, to the extent, we have to be still within the guidance and blessing of God All Mighty the Creator of this Universe. As we all have to continuously remember and plant in our mind, heart, soul : is God's saying in Surah Fatir/The Originator of Creation (surat 35) paragaph 45 of the Holy Quran, in which ALLAH says : In the name of Allah The Most Gracious and the Most Merciful,

1. All the praises and thanks are to ALLAH , the (only) Originator (or the (only) Creator of the heavens(sky) and the earth.Who made the angels messengers with wings :2 or 3 or 4 .He increases in creation what he wills. Verily ALLAH is able to do all things.
2. Whatever of mercy (i.e.of good), ALLAH may grant to mankind, none can withold it, and whatever He may withold none can grant it thereafter. And He is the ALL-Mighty, the ALL-Wise.
3. O mankind! Remember the Grace of Allah upon you! Is there any creator other than ALLAH who provides for you from the sky(rain) and the earth? La ilaha alla Huwa(none has the right to be worship but HE. How then are you turning away(from Him)?

Based on such God's saying, we really do not have to be afraid to make any experience with our live to reach the stage as freedom and independent and only to ALLAH shall we worship ourselvers and nobody else but ALLAH. Thus, it is only to ALLAH that we should be afraid of and not to any mankind, who sometimes try "to play god" and "try to play power". It is Allah who gives us the opportunity to live in this world. And it is to ALLAH that we have to report whatever deeds that we have done during our live on this World. As we all Know, in every Court Decision in Indonesia, the Heading of such Decision is always "For The Sake of Justice Based on GOD who is the only One God . Thus, since the Court's decisions is basing on GOD who is the only One GOD, we as Lawyers, Judges, Attorneys, Legal Advisiors, Advocates, Legal Consultants, businessmen and whomsoever we are, who seeks Justice from the Courts Decision in Indonesia, in the event of disputes / different of understanding / interpretation on contracts, by the Parties who have entered into such contract, or non-contracts , must really realized the Consequences of their efforts in seeking for such Justice, in the view and prespective of God the Only One GOD as the only Creator of this Universe, since the Court's Decision is always made : For the Sake of Justice based on GOD the only One God. Thus if the Name of GOD is being misused, due to misconduct / misbehaviour by a certain party who cheats, bribes, or whatever unfair conduct, in trying to force their interests unfairly, than it is our faith, that God the only One GOD, will not bless such Courts Decisions, which was resulted and made from such misconduct of cheating, or bribing, which therefore is really unfair to the other party's rights, who is being lessen and decreased materially or morally. Based on Al Quran, decreasing the other's party's rights especially through unfair- unJustice Courts's Decision is in fact breaching, God's rules, because all things/wealths which you may find in and between the sky and earth, are actually created and owned by GOD, and is being given to the well beings /creatures in this World and Universe, as a tool/ instrument of test from GOD, whether such human being is greatfull to ALLAH, or not. Based on the information in Al Quran, it is GOD who distributes /grants wealth to any and all creatures, which God has created, including the human beings, and shall all return to GOD as the owner of this Universe. One significant element of Faith, that we have to plant in our Heart is that " There will be a DAY where, the REAL JUSTICE will take place, and the Judge will be ALLAH the ALL MIGHTY POWERFULL. Regardless whether you like it or not, you believe it or not, regardless of your nationality, your etnics, your believes, such Final DAY will for sure come, and only GOD will know when such Final Day will occur. Well, having said all of the above, I just want to remind myself to be always consistent with the need to ask and really ask deeply in our hearts, for GOD' s guidance in continuing our life. Such GOD's Guidance has been forwarded to us through God's Messengers, which are all the Prophets, and in this present moment, in the Area of this Very Rapid Information, including through the internets, blogs, you may and can be find, and read and digest God's Written Manual : How To live in this World, namely the Al Quran and all the Book's which was given by God through its previous prophets, which, benchmark has to be on the Latest Book which is the Al Quran and through the latest and Final Prophet, named Mohammad ( peace be upon him ), who is originated from the region of Arab, at the Place of the 1st House Lord so Called Baitullah or Meccah, where Abraham, who is Mohammad's great-great grand father from the line of Prophet Ismail, who has inspired all of us to keep on seeking and find the real God as the the Real and True and only Creator of this Universe, where during that period of time, Abraham has to face his own blood father, who has worship his own created god ( man made god or false god), other than God the All Mighty. Hours : 2.45 midnight continued and revised 11.45 morning Tuesday 13 May 2008 Wrote by Agung Supomo Suleiman

Awareness and Realization

Awareness and Realization Based on my experience, in running an independent vehicle or entity such as our Law Firm, which is now named SA & Co ( Suleiman Agung & Co) for nearly 10 Years, from 1 st of June 1998 until to date 26 April 2008 , I really am fully aware, and realize, that it is only with the Grace and permission of ALLAH, that I and my staff including my supporting wife, can still have the will and strength, physically, mentally, emotionally and spiritually, to continue full filing the excitement in experiencing our live in this world, and therefore,we must always keep on maintaining, thanking God, for giving us the permission to live in this World, and giving us the chance, to be independent and having Clients, who requires our legal services, which results cash in to our Firm, for which we can continue to feed our Family.