SHC freezes Hascol’s assets on Mena Energy application

Published October 15, 2021
A spokesperson for Hascol Petroleum Ltd said the matter dated back to the previous management and had been going on since 2014. — Photo courtesy Hascol website
A spokesperson for Hascol Petroleum Ltd said the matter dated back to the previous management and had been going on since 2014. — Photo courtesy Hascol website

KARACHI: While allowing an execution application of a foreign firm, the Sindh High Court has ordered the attachment of assets owned by Hascol Petroleum Ltd till further orders.

A single-judge bench headed by Justice Adnan Iqbal Chaudhry also barred Hascol from transferring its shares in three subsidiary companies together with any bonus and right shares, withdrawing or transferring the credit balances of its bank accounts and charging in any way the immovable properties listed in the execution application.

Mena Energy DMCC, registered as a firm in Dubai, filed a foreign execution application under Section 44-A of the Civil Procedure Code (CPC) for enforcing a foreign judgment passed in June 2018 by the High Court of Justice, Business and Property Courts of England and Wales, Commercial Court.

In the foreign judgment, the decree holder (Mena Energy) had been awarded $9,500,000 against the judgment debtor (Hascol) and the execution was filed at Karachi as the latter has assets here.

Spokesperson says appeal has been lodged against decision

The bench observed that the foreign decree was conclusive between the parties within the meaning of Section 13 CPC and was executable under section 44-A CPC and thus, the objections of the judgment debtor were dismissed and the execution was allowed.

It further stated that under the settlement agreement, the judgement debtor (JD) agreed to pay a sum of $9,500,000 in full and final settlement of the decree holder (DH) claim pending before the foreign court, in four installments commencing from June 2018, but JD did not make any payment nor did it provide the agreed bank guarantees.

The bench in its judgment said clause 3 of the settlement agreement recognised that the JD to make payment to the DH out of Pakistan and the JD would be required to obtain the approval of State Bank of Pakistan and it undertook to use its best endeavours to obtain such approval.

Advocate Arshad Tayebaly representing Hascol submitted that clause 3 was incorporated keeping in view section 5 of the Foreign Exchange Regulation Act, 1947 prevalent in Pakistan which placed restriction on payments from Pakistan to a person resident outside the country except with the approval of the SBP.

He contended that SBP approval was a condition to payment, and until such approval was given the decree was not executable.

However, the bench noted that while taking such a stance the counsel did not demonstrate that the JD was otherwise willing and able to make payment.

“Though the JD did make an application to the SBP for the requisite approval, but pending such approval it did not opt to deposit the money in an escrow account to avoid interest as per settlement agreement, nor is it willing to make the deposit in court. Therefore, the case is not that the JD is ready with the payment but for the SBP approval”, it added.

The bench further said that the foreign decree did not require payment to be made as per the settlement agreement, but it was a money decree and the execution was brought to enforce the money decree, not the settlement agreement.

The lawyer for JD said they are going to challenge the order before a division bench of SHC.

A spokesperson for Hascol Petroleum Ltd said the matter dated back to the previous management and had been going on since 2014. “Hascol Petroleum Ltd has lodged an appeal against the decision today,” he added.

Published in Dawn, October 15th, 2021

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

An inexplicable delay
03 Oct, 2022

An inexplicable delay

AFTER a flurry of activity a couple of months ago, geared towards filling the vacancies in the apex court — an...
Dire situation
Updated 03 Oct, 2022

Dire situation

If there is any time for the civilian leadership to show unity, it is now.
Russian annexation
03 Oct, 2022

Russian annexation

AS Russia and the West play a zero-sum game in Ukraine, Moscow’s official annexation of four Ukrainian regions it...
Spy games
Updated 02 Oct, 2022

Spy games

The audios leaked so far appear to have been carefully curated: they apply pressure but do not do major damage.
‘Geopolitical football’
02 Oct, 2022

‘Geopolitical football’

THE US-China rivalry is by all measures one of the globe’s most dangerous competitions for power and influence. ...
Fuel price reduction
02 Oct, 2022

Fuel price reduction

ISHAQ Dar is back; so are his signature policies. The reduction of a little over 5pc in fuel prices announced by him...