Pakistan seeking continuation of stay in Reko Diq case

Updated March 11, 2020

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AG office says it is seeking annulment of the ICSID's award to Tethyan Copper Company. — Abdul Razique/File
AG office says it is seeking annulment of the ICSID's award to Tethyan Copper Company. — Abdul Razique/File

ISLAMABAD: The government is seeking avenues to ensure that it is granted a stay on the enforcement of $5.9 billion penalty during pendency of proceedings of annulment of the award imposed against Pakistan by the International Centre for Settlement of Investment Disputes (ICSID) for terminating Reko Diq mining contract in Balochistan.

This was announced by the office of the Attorney General (AG) for Pakistan here on Tuesday.

The AG office said that it had filed a request on Nov 8, 2019 for the annulment of the award rendered by the ICSID on July 12, 2019, in the matter of the Tethyan Copper Company (TCC) versus Pakistan.

Alongside the request for annulment, Pakistan had also requested a provisional stay on enforcement of the award, which was granted on Nov 18, 2019, it said. Presently, the ICSID award has been stayed which means that the TCC is not allowed to pursue any ongoing enforcement proceedings or initiate new ones.

The ICSID secretariat would now notify the tribunal for the annulment phase of proceedings and subsequently decide on the question of stay on enforcement, the AG office said, adding that the ICSID secretariat retained the prerogative as to when to notify the tribunal.

AG office says that it filed a request on Nov 8 last year for annulment of award rendered by ICSID on July 12 in the matter of Tethyan Copper Company versus Pakistan

Recently, a delegation led by Attorney General Khalid Jawed Khan had visited London to prepare in advance for Pakistan’s submissions for the hearing on stay on enforcement with foreign legal counsels.

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

The ICSID tribunal was seized with a dispute between Pakistan and the TCC which had claimed $8.5 billion for rejection of its application by the Mining Authority of Balochistan for the multimillion dollar mining lease in the province in 2011.

Earlier Pakistan had taken the plea before the tribunal that the agreement /mining license for the Reko Dig project 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 into reasons why Pakistan ended up in this predicament.

Reko Diq is a small desert town in Chagai district of Balochistan and is 70 km 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 Jan 2013, a Supreme Court bench headed by the then chief justice Iftikhar Mohammad Chaudhry, while taking up a petition of former lawmaker Dr Abdul Haq Baloch, had declared the mining contract to the TCC for the exploration of gold and copper as illegal.

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

Published in Dawn, March 11th, 2020