February 12, 2003	Wednesday	Zul Hijjah 10, 1423

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ISLAMABAD, Feb 11: The International Chamber for Settlement of Investment Dispute would on Thursday take up the case of Swiss company SGS, which is seeking $120 million from Pakistan for the premature termination of its contract.

Nawaz Sharif government, alleging that it was procured after bribing the then Prime Minister Benazir Bhutto and her husband Asif Ali Zardari, terminated the pre-shipment inspection contract.

The matter after reaching Supreme Court of Pakistan and Supreme Court of Switzerland has finally landed in the ICSID. Pakistan has challenged the jurisdiction of the ICSID, arguing that the company had filed the case in Pakistan and was not entitled to seek remedy for ICSID, as it had not brought any kind of investment in Pakistan and was only contracted for pre-shipment inspection.

Pakistan’s Attorney General Makhdoom Ali Khan has left for The Haque, Holland. Pakistan has also engaged a French law firm, Freshfield for defending itself.

The Swiss company has based its suit on the bilateral investment treaty Pakistan and Switzerland signed on May 6, 1996 for the promotion of reciprocal protection of investment.

The government had raised the issue of jurisdiction but it has been advised by its lawyers in rare cases, suits are knocked out on technical grounds, and most of the times, those are decided on merits.

Irrespective what would be the outcome at the ICSID, Pakistan has been dragged into long drawn legal battle in which, even if it wins the case ultimately, it would end up losing few million dollars.

National Accountability Bureau, which is prosecuting former Prime Minister and her husband in the same case and pursuing the cases in Switzerland, is not willing to pursue the SGS arbitration by taking the plea that it was concerned only with the criminal prosecution.

When a complaint is registered at ICSID, both the parties are required to deposit $100,000 as fee, besides engaging the foreign lawyers who have specialized in ICSID proceeding, and they charge on hourly basis.

Pakistan is finding itself in the difficult position, only because of casual manner in which investment treaties are signed. Pakistan has investment protection treaties with 40 countries of the world.

The Investment Treaty with Switzerland defines “investment” so broadly, that no other country in the world ever agreed to this definition of investment.

Pakistan decided to defend itself even after the Supreme Court judgment that all the dispute between Pakistan and Swiss firm, SGS should be decided in Pakistan, on the basis of legal advise that if Pakistan refused to contest the arbitration, the ICSID will make an exparte degree.

ICSID functions under the World Bank umbrella. It was further advised that no country has ever been able to withstand the World Bank pressure for ensuring payments to the parties which have been obtained favourable decision.