Efforts under way to get Reko Diq case penalty cancelled: AG Khalid Jawed Khan

27 Feb, 2020

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Financial implications of losing the case will be devastating for the country’s economic stability, says Jawed. — DawnNewsTV/File
Financial implications of losing the case will be devastating for the country’s economic stability, says Jawed. — DawnNewsTV/File

ISLAMABAD: Attorney General Khalid Jawed Khan has said that Pakistan’s foremost effort in the Reko Diq mining case is to secure annulment of the $5.9 billion penalty by getting the interim stay given by the Interna­tional Centre for Settlement of Investment Disputes converted into a permanent injunction in view of its serious financial implications for the country.

During an interaction with the media at the office of the Press Association of the Supreme Court, AG Khan said he was proceeding abroad to pursue the issue given the fact that Pakistan had to make a series of commitments with the International Monetary Fund (IMF) to secure almost a similar amount of $6bn.

The financial implications would have a devastating effect on the country’s economic stability and at stake were Pakistan’s assets in other countries which could be attached if the country lost the case, the AG feared.

“During my meeting with Prime Minister Imran Khan on Tuesday, we also discussed the matter along with other issues,” the AG said, adding that the premier was also concerned. He said they also discussed a number of other arbitration cases at different international forums.

AG Khan said his first priority would be to settle cases concerning national security and state revenue.

The AG had informed a 10-judge full court of the SC earlier this week that he would have to leave abroad between March 15 and 20 to attend to some important international obligations.

Pakistan-Tethyan Copper Company Pvt Ltd (TCC), a joint venture of Canadian Barrick Gold and Chilean Antofagasta Minerals, has approached relevant international forums for the enforcement of the $5.9 billion penalty imposed by the ICSID against Pakistan last year.

A special three-member tribunal is expected to be constituted by the ICSID to take up the annulment request of Pakistan next month and decide whether the provisional stay should be extended or rejected.

In its annulment request, Pakistan has taken the plea that the calculated damages were based on a projected 56-year operating period for the mine when it had not issued any lease or permit for such a long period.

If the government manages to get the provisional stay granted by the ICSID’s secretary general in November 2019 converted into a permanent injunction, Pakistan will be able to focus attention towards getting revision of the Reko Diq case.

On July 12, 2019, the World Bank tribunal called the ICSID had slapped a whopping $5.97 billion award against Pakistan that includes $4.08 billion as penalty as well as $1.87 billion in interest in a 700-page ruling.

The ICSID tribunal was seized with a dispute between the TCC which had claimed $8.5 billion for rejecting the latter’s application by the mining authority of Balochistan for the multimillion dollar mining lease in the province in 2011. Pakistan had previously taken the plea that the agreement /mining licence at Reko Diq was procured through corrupt means and therefore, the claimant (TCC) could not ask for damages.

After the announcement of the award, Pakistan reacted swiftly with Prime Minister Imran Khan constituting a commission to probe reasons why the country ended up in this predicament.

The commission was also tasked to fix responsibility for making the country suffer such a huge loss and the lessons learnt in order to avoid repeating mistakes.

Reko Diq is a small desert town in Chagai district of Balochistan and is 70km north-west of Naukundi close to Pakistan’s border with Iran and Afghanistan. The area is located in Tethyan belt that stretches all the way from Turkey and Iran into Pakistan.

In January 2013, a Supreme Court bench headed by then Chief Justice Iftikhar Mohammad Chaudhry while taking up a petition of Dr Abdul Haq Baloch had declared the mining contract given to TCC for the exploration of gold and copper ‘illegal’.

In his petition, Dr Baloch had sought a restraining order against the federal and the provincial governments from approaching the ICSID and the International Chambers of Commerce (ICC) in wake of an earlier direction by the apex court asking the Balochistan government to request the international arbitrators to hold their hearing till the time the court decides the matter.

While talking to reporters, he said he had expressed his inability before the Supreme Court to represent the federal government in the Justice Qazi Faez Isa reference case.

In response to a question, the newly appointed AG said he might have been nominated by the prime minister because he was a professional lawyer and that the judiciary also had the same expectation from him as the prime minister had.

He said it would be of his utmost endeavour to enhance the stature and importance of his office by making it completely independent for which the prime minister had given him complete freedom and support.

AG Khan said that both he and Law Minister Farogh Naseem were equal and that he would have a good working relationship with the government.

Published in Dawn, February 27th, 2020