January 16, 2002	Wednesday	Ziqa’ad 1, 1422

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ISLAMABAD, Jan 15: The Lahore High Court, Rawalpindi Bench, on Monday stayed the order of Civil Court Islamabad ordering the Swiss company, SGS, and Pakistan government to nominate their arbitrators for the settlement of their dispute after the termination of pre-shipment contract.

The government had filed a suit for the recovery of huge amount, which according to its estimates were lost after the award of contract to the Swiss company.

The civil judge had rejected the plea of the SGS which stated that all the proceedings should be stayed in Pakistan as its request before the International Centre for Settlement of Investment Disputes (ICSID), a forum set up under UN convention, had been registered.

The company had approached the ICSID for getting compensation from Pakistan government for termination of pre-shipment inspection contract.

Justice Saeed Akhtar of LHC, Rawalpindi Bench, after hearing Barrister Farrukh Karim Kureshi, counsel for SGS, suspended the operation of civil judge till Jan 31 when the case would be taken up again.

The court also issued notice to Deputy Attorney General. The counsel for the SGS had contended that under the Article 11 of the Investment Treaty guaranteed its consent to submit to the ICSID.

The Swiss company stated that Pakistan and Switzerland had signed an pact on May 6,1996 for the promotion of reciprocal protection of investment.

Pakistan violated number of obligations owed to the SGS pursuant to the Swiss-Pakistan pact as well as breached the agreement, it added.

Soon after the SC set aside the judgment convicting Ms Benazir Bhutto and Asif Ali Zardari on the charges of getting commission from the SGS, the company had filed a counter claim against the government of Pakistan, demanding $329 million as damages on account of premature termination of pre-shipment inspection (PSI) contract and for its defamation.

The SGS claimed: “The award of contract was fair, transparent and based on a competitive process of bidding and at no stage it indulged in any corrupt or unethical practices in order to procure the award of the contract.”

The Swiss company also stated that the wrongful repudiation of contract by the government and its subsequent false and politically motivated accusations had caused monetary loss and damage to the reputation of the company.

The company demanded $329 million in the form of outstanding invoices; interest on the unpaid invoices; damages on account of premature termination of contract, de-mobilisation cost; damages to the reputation of the company as a direct result of the defamatory statements of the government; damages on account of loss of opportunity and legal fees and expenses.