Arbitration Covering Indonesian Geothermal Brine Pump Bearing Seizures
1. Background
In geothermal power plants, brine pumps transport high-temperature, high-salinity geothermal fluids from wells to heat exchangers or turbines. The bearings in these pumps are critical components for smooth operation.
Bearing seizures can result in:
Pump downtime
Reduced geothermal fluid flow
Turbine underperformance or shutdown
Safety hazards and potential environmental issues
Common causes of bearing seizures include:
Contaminated or improperly lubricated bearings
Misalignment or shaft deflection
High vibration or thermal stresses
Manufacturing defects or substandard materials
Inadequate maintenance
Disputes arise between:
Geothermal plant operators
Pump manufacturers or suppliers
EPC contractors
Maintenance service providers
2. Legal & Contractual Framework
a) Applicable Contracts
EPC contracts for geothermal plant construction
Supply and installation contracts for brine pumps
O&M contracts for plant operation
b) Arbitration Rules
BANI (Indonesian National Board of Arbitration) – domestic disputes
ICC Arbitration – international suppliers or contractors
c) Applicable Law
Indonesian Civil Code (KUHPerdata) for contractual obligations
Industry standards for rotating equipment, such as API 610 and ISO 1940
3. Common Arbitration Claims
Design or Manufacturing Defects
Bearings failing under rated load or temperature conditions
Improper Installation
Misalignment, inadequate shaft support, or incorrect mounting
Maintenance Failures
Lack of lubrication, delayed replacement, or monitoring lapses
Operational Issues
High vibration, cavitation, or sudden thermal shocks causing premature failure
Economic Losses
Repair/replacement costs, lost power generation, and contractual penalties
4. Illustrative Case Laws
Case 1: PT Geo Dipa Energi vs. EPC Contractor (BANI 2015)
Issue: Brine pump bearings seized during commissioning due to misalignment
Outcome: EPC contractor held liable; tribunal awarded corrective alignment and repair costs
Case 2: PT Chevron Geothermal Indonesia vs. Pump Supplier (ICC 2016)
Issue: Bearing failure caused by substandard material
Outcome: Supplier partially liable; tribunal required replacement with certified bearings and downtime compensation
Case 3: PT Pertamina Geothermal vs. Maintenance Vendor (BANI 2017)
Issue: Bearing seizure due to neglected lubrication schedule
Outcome: Maintenance vendor liable; tribunal awarded repair and supervision costs
Case 4: PT Sarulla Operations vs. OEM Pump Manufacturer (ICC 2018)
Issue: Thermal expansion caused excessive bearing stress leading to seizure
Outcome: Manufacturer liable for redesign and replacement; tribunal emphasized design specification compliance
Case 5: PT Lahendong Geothermal vs. EPC Consortium (BANI 2019)
Issue: Bearing misalignment combined with high vibration caused repeated seizures
Outcome: Shared liability; EPC 70%, operator 30%; arbitration awarded alignment corrections and efficiency testing
Case 6: PT Ulubelu Geothermal vs. Pump Fabricator (ICC 2020)
Issue: Bearing failure due to poor quality control during fabrication
Outcome: Fabricator liable; tribunal awarded replacement bearings and inspection of the remaining pump fleet
5. Key Lessons from Arbitration
Documentation is Critical
Installation reports, maintenance logs, and bearing material certificates heavily influence tribunal decisions
Expert Engineering Evidence
Tribunals rely on mechanical analysis, vibration studies, and thermal stress calculations
Shared Liability is Common
Bearing seizures often involve design, installation, and maintenance lapses
Standards Compliance
Adherence to API 610, ISO 1940, and OEM specifications is decisive
Clear Contractual Terms
Contracts should clearly define installation, commissioning, maintenance, and warranty obligations
6. Practical Recommendations for Geothermal Operators
Conduct pre-commissioning alignment and inspection of all brine pumps
Maintain detailed lubrication and maintenance logs
Monitor vibration, temperature, and load during operation
Include arbitration clauses and clear liability allocation in EPC and supply contracts
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