March 11, 2003	Tuesday	Muharram 7, 1424

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ISLAMABAD, March 10: The International Chamber for Settlement of Investment Disputes has registered the request of Italian contractor of the Ghazi Barotha project for arbitration after overruling Pakistan’s objections to its jurisdiction.

Official sources told Dawn that Pakistan was intimated on Monday by the ICSID secretariat that it had registered the request of Impregilo, the Italian contractor, for arbitration and Pakistan should raise the objection to the jurisdiction of the tribunal before the tribunal itself.

The Italian contractor has approached the ICSID, which works under the umbrella of World Bank, demanding $450 million from the government of Pakistan.

The government in its preliminary objections before the ICSID at Washington had stated that under Article 25(1) of the ICSID Convention the jurisdiction of the centre did not extend to Wapda as it was not a constituent subdivision or agency of Pakistan and had not been designated to the ICSID by Pakistan.

The government has been informed that the ICSID had noted that the request was against the government and not against Wapda.

The sources maintain that just the registration of the request would force the government to spend a few millions of dollars.

After registration of the request both the parties are required to deposit $100,000 as fee, besides engaging foreign lawyers having necessary qualification to take up cases at the ICSID.

This is the second application for arbitration filed by a foreign company engaged for projects in Pakistan which has been registered by the ICSID. The request of Turkish company Bayinder has so far not been registered.

The Italian contractor has claimed that Wapda is in serious breach of contractual commitments and is also responsible for denial of justice to it by frustrating the contractual dispute resolution mechanism.

Now both Pakistan and the Impregilo will appoint an arbitrator each. Neither party can appoint one of its nationals as arbitrator. The two arbitrators will by mutual agreement appoint a chairman. If they fail to agree then the chairman will be nominated by the ICSID.

At present Pakistan has investment protection treaties with 43 countries. Majority of these agreements were signed in the 90s without properly defining what was meant by investment.

Unlike other countries, Pakistan never protected its foreign assets. If a suit is decreed by the ICSID, the other party can ask for the execution of the treaty by identifying Pakistan’s assets.

Pakistan’s foreign assets include its reserves in the Reserve Bank of America, PIA’s fleet, PNSC ships and embassies.

The countries with which Pakistan has investment treaty are Germany, Romania, Sweden, Kuwait, France, South Korea, the Netherlands, China, Uzbekistan, Tajikistan, Spain, Turkmenistan, United Kingdom, Singapore, Turkey, Portugal, Malaysia, Switzerland, Kyrgyz Republic, Azerbaijan, Bangladesh, UAE, Iran, Indonesia, Tunisia, Syria, Denmark, Belarus, Mauritius, Italy, Oman, Sri Lanka, Australia, Japan, Belgium, Qatar, Philippine, Yemen, Egypt, Lebanon, Morocco, and Bosnia-Herzegovina.