PAKISTAN is facing yet another international dispute before the International Centre for Settlement of Investment Disputes related to the M1 motorway project. Details are sketchy at this stage but it involves a highway construction project by a Turkish company called Bayindir. The attorney general’s office has confirmed that it would pursue the case vigorously. That may be so, and it may also be premature to comment on the merits of the case in the absence of relevant details, but what is indeed disturbingly clear is that Pakistan has over the years been increasingly finding itself locked in international legal battles with foreign investors.

Among numerous such cases, two stand out. One is the Reko Diq mining case in which Pakistan lost the case in an international forum and has been slapped with damages amounting to billions of dollars. Similarly, it also lost the case against the Turkish company Karkey and was required to pay very hefty damages. Both these cases involved the superior judiciary intervening in contracts without taking into account international repercussions. By now it has become obvious that Pakistan has deficiency in understanding and appreciating the legal sanctity of international contracts. In most such cases, the attitude and approach of the Pakistani authorities has been cavalier, unprofessional and legally unsound. They either did not grasp the seriousness with which such contractual agreements are taken, or failed to do due diligence before wading into waters they were not equipped for. However, it seems that few lessons have been learnt, and fewer remedial measures taken. There are scant indications that government organisations and judicial quarters have undertaken capacity-enhancement steps so that they are better equipped to deal with such matters. The country’s leadership also needs to understand that foreign investors will shy away from Pakistan if they see it as an unsafe and unreliable place for their investment. It is no secret that Pakistan suffers from a volatile and turbulent brand of politics. But if incoming governments do not respect the contractual obligations signed by their predecessors, foreign investors will think twice before venturing into our market. The latest international dispute therefore provides a timely and urgent reminder to the authorities to put in place measures that can better protect contracts and agreements, and that can also build a framework whereby untrained and ill-equipped institutions do not jump into disputes they should not be handling. We have paid enough for such follies.

Published in Dawn, October 17th, 2021

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