A district judge in New York has stayed a $12 billion lawsuit by an American energy company and its St Lucia subsidiary against State-owned Petrotrin in the largest lawsuit ever filed against the government of Trinidad and Tobago.

World GTL Inc served Petrotrin with a complaint in the United States Federal District Court for what it called wrongful expropriation of its assets in joint venture company, World GTL Trinidad Ltd in February.

In 2005, World GTL Inc and Petrotrin entered into a project agreement to build a gas-to-liquid plant within Petrotrin's refinery at Pointe-a-Pierre.

World GTL of St Lucia would own 51 per cent and Petrotrin 49 per cent.

In June Petrotrin moved for an order staying the lawsuit and compelling World GTL to arbitrate any claims it believed it had against Petrotrin.

On August 11, US District judge Lawrence McKenna granted a motion by Petrotrin staying the lawsuit by World GTL.

The judge compelled the World GTL parties to bring any claims before the London Court of International Arbitration, Petrotrin said in a published statement yesterday.

Petrotrin said it continues to pursue its rights in the arbitration it brought against World GTL earlier this year. Petrotrin is alleging that the World GTL parties breached their contractual obligations with the gas-to-liquids power plant at the refinery.

"Petrotrin is very pleased and encouraged by this early success in its dispute with the World GTL parties," a statement from the company said, adding that it was confident it will prevail in its claims against them.