Rothschild, who helped set up Bumi almost three years ago, has long opposed the miner's current management, and in a petition heard on Thursday argued Bumi was run in a way that hurt, or "unfairly prejudiced" small investors. A claim of "unfair prejudice" is a key legal remedy under UK law available to smaller investors left unable to block decisions.

Rothschild and his erstwhile Indonesian partners - primarily the influential Bakrie family - have been at odds for over two years, their relationship souring just months after they struck a deal that aimed to bring Indonesian mining promise to London.

Both sides have lost heavily as the partnership fell apart, amid tumbling thermal coal prices, boardroom battles and allegations of misuse of funds and illegal phone hacking.

According to Thursday's petition, Rothschild will not seek financial compensation with the case, but instead asked a court to scrap "relationship agreements" between the company and the Bakries, and to remove outgoing chairman Samin Tan and his executive and Bumi director Alex Ramlie from the board.

Bumi's current board is seeking to turn around the company's fortunes by splitting with the Bakrie family and focusing on majority owned Indonesian subsidiary Berau Coal.

The Bakries have agreed to split with the London firm, in a deal that will see them buy back a 29 percent stake in Indonesian unit Bumi Resources currently held by Bumi. They will sell their interest in the parent company to their partner, major Bumi shareholder and outgoing chairman Tan, lifting his stake to over 47 percent.

A spokesman for Bumi said the court proceedings were "an unnecessary distraction and serve no useful purpose".

"The relationship agreements will come to an end and the board will be restructured as part of the separation transaction," he said.

A spokesman for the Bakries said the family was concentrating on the split and the stake purchase "and we hope Mr Rothschild will support that".

SPLIT PLAN

The split plan was set in motion on Thursday, when Bumi agreed to sell the Bumi Resources stake for $501 million, conditional on the Bakries selling their stake in Bumi Plc. The deal is also conditional on independent shareholder approval.

Rothschild, who holds 14.8 percent of the company, has questioned the plan to sell the Bakrie stake to Tan.

"For the sake of the London market, I hope the regulators step in and ensure the interests of independent shareholders are protected," Rothschild said in a statement before the petition was heard.

Tan's stake rises to 47.6 percent, but he is seeking an exemption to rules which would require a shareholder with more than 30 percent to make a mandatory takeover bid.

Bumi, which has battled investor scepticism over the Bakrie family's ability to raise the necessary cash to buy back Bumi Resources and seal the split, said on Thursday that funding details of the deal were yet to be finalised. But it also sought to put in safeguards.

"More needs to be done before we are able to present a comprehensive package for shareholders to consider," the company's senior independent non-executive director Julian Horn-Smith said. He said this included finalising arrangements covering how the funds will be transferred to close the deal.

A general meeting for independent shareholders to vote on the deal is planned for the autumn, potentially before the next court hearing.

(Reporting by Clara Ferreira-Marques; editing by Keiron Henderson)

By Clara Ferreira-Marques and Sarah Young