ISLAMABAD, April 6: A high-level US delegation is arriving here in the third week of May to hold the final round of talks for signing a bilateral investment treaty (BIT) with Pakistan. Official sources told Dawn here on Tuesday that before the US delegation, a German delegation would arrive here in the first week of next month to discuss and sign a new BIT with Pakistan. So far the issue, sources said, had not been finalized because of the persistent demand by Germany to have a level-playing field for its investors in Pakistan.
Prime Minister Shaukat Aziz has directed the authorities concerned to finalize details of the proposed BIT with the United States by the second half of April. This will be the last and final round of talks. Earlier, two rounds were held — first in Islamabad and then in London early this year.
Pakistan and the United States have reportedly agreed in principle to resolve investment related disputes through any international forum in the proposed BIT.
Both the sides have given up their conditions to have multiple choices for dispute resolution at various world forums, including the International Centre for Settlement of Investment Disputes, Washington, the United Nations Commission on International Trade Law, Vienna (Austria), and the International Chamber of Commerce (ICC), Paris.
Pakistan was likely to accept arbitration in the ICSID because of the involvement of the World Bank which in case of a final decision becomes the implementing authority.
The sources said Islamabad was expected to get some distinctive favours in the proposed BIT that had not been offered to many countries who signed this BIT with the United States.
Pakistan has so far declined to accept the signing of BIT with retrospective effect to cover the investment made by the US investors in the past. The new draft of the proposed bilateral investment agreement has been prepared by prime minister’s adviser on legal affairs Syed Sharifuddin Pirzada, vetted by the law ministry and approved by the cabinet division.
The sources said one of the clauses of the draft was that there would be no involvement of lower courts to hear investment related issues. Now only the High Court would be authorized to hear such cases with one final appeal in the Supreme Court in case the issue was mutually agreed between the two sides.
The Pakistan government wanted that foreign investors should first exhaust remedies in local courts before seeking any international arbitration. Similarly, it wanted that the state should not be liable for any breach committed by one of the parties to an investment/contract agreement signed by an investor of either contracting party with any individual.
The sources said Pakistan had so far agreed in bilateral talks that it was inappropriate to encourage bilateral investment by weakening or reducing the protections afforded in domestic labour laws.
