Govt mulls options over UK judge’s ruling in Reko Diq case

Published July 10, 2021
The Reko Diq project site. — Photo courtesy Tethyan Copper Company Pakistan/File
The Reko Diq project site. — Photo courtesy Tethyan Copper Company Pakistan/File

ISLAMABAD: The federal government is weighing options how to deal with a recent London High Court judge’s rejection of Balo­chistan government’s defe­nce before the International Chambers of Commerce (ICC) tribunal that it lacked jurisdiction to arbitrate a dispute in the Reko Diq mining venture in view of corruption allegations.

An informed source privy to the development told Dawn that one of the options could be challenging the decision of the London High Court judge before the Court of Appeal in the United Kingdom. The International Disputes Unit (IDU) housed inside the Attorney General office in the Supreme Court building was reviewing the ruling and could reach a decision very soon, the source said, adding that a final approval about challenging the ruling was yet to taken.

Following a dispute after the Balochistan government’s Nov 28, 2011 denial of the mining licence, the Australian mining giant Tethyan Copper Company (TCC) Pvt Ltd initiated two arbitrations, first against the province of Balochistan pursuant to an arbitration clause in the July 29, 1993 Chagai Hills Exploration Joint Venture Agreement (Chejva) and the other against Pakistan under the Australia-Pakistan Bilateral Investment Treaty.

The arbitration against Balochistan province initiated by the TCC — a 50-50 joint venture of Barrick Gold Corporation of Australia and Antofagasta PLC of Chile — proceeded under the ICC arbitration rules, whereas the one against Pakistan commenced under International Centre for Settlement of Investment Disputes (ICSID) arbitration rules.

While raising the plea before the ICC tribunal, Balochistan had cited Jan 7, 2013 judgement of the Supreme Court that declared Chejva and related agreements illegal. But the ICC tribunal on Oct 21, 2014 held that the arbitration agreement in the Chejva as well as Chejva itself was valid and that TCC could invoke the arbitration agreement in the Chejva besides the ICC tribunal had the jurisdiction to consider TCC’s contractual and non-contractual claims.

When the decision was challenged by Balochistan, Judge Robin Knowles of the London High Court of Justice rejected Balochistan’s position in which it referred to the SC decision, saying it was not enough to demonstrate the allegations of corruption since the apex court judgement was not based on corruption allegations in the Reko Diq case.

Similarly, as the Balochistan province argued that mining giant allegedly indulged in corrupt practices by bribing senior provincial government officials to get the joint venture agreement and also pleaded that the ICC lacked jurisdiction, Judge Robin Knowles ruled that Balochistan forfeited its right to mount corruption allegations to challenge the jurisdiction of an arbitral tribunal adjudicating claims over the Reko Diq gold and copper mines. The UK court ruled that the English arbitration law barred parties from raising issues before the court that were not raised during the arbitration in the same case.

Meanwhile, the source disclosed that the High Court of Justice Business and Property Courts of England and Wales Queen’s Bench Division Commercial Court is expected to consider in September the question if Balochistan province would be permitted to adduce further evidence of wrongdoings and corruption in the mining agreement.

Earlier on May 25, Pakistan had won against the TCC that had initiated a case for the enforcement of July 12, 2019, $5.97 billion award against Pakistan by the ICSID in the Reko Diq litigation.

The High Court of Justice in the British Virgin Islands (BVI) had ruled in favour of Pakistan in the case commenced for the attachment of Pakistan’s major assets abroad, including two hotels in New York and Paris in its Reko Diq international arbitration.

The BVI high court had also ordered removal of the receiver appointed on interim basis from the Roosevelt Hotel, New York and the Scribe Hotel, Paris.

Earlier in Dec 16, 2020 the BVI High Court through its ex-parte order had attached the assets belonging to the Pakistan International Airlines Investment Limited (PIAIL) including company’s interests in two hotels namely Roosevelt Hotel in Manhattan, New York, the US and the Scribe Hotel in the Central Paris as well as froze 40 per cent interest of the PIA in a third entity, Minhal Incorporated.

Published in Dawn, July 10th, 2021

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