ISLAMABAD: Describing as unique the presidential reference seeking its opinion on the validity of an international commercial agreement on Reko Diq mining exploration, the Supreme Court on Tuesday issued notices to a number of parties for assistance.

“The controversy presented before the court on account of its unusual nature necessitated assistance and competent advice and views of all stakeholders,” observed Chief Justice of Pakistan (CJP) Umar Ata Bandial in a brief order he dictated after hearing the presidential reference.

President Dr Arif Alvi had on Oct 18 moved reference seeking the apex court’s opinion on the proposed reconstitution of Reko Diq project in Balochistan and interpretation whether its 2013 judgement in the case prevented the federal and provincial governments from entering into the implementation agreement and the constitutionality of the proposed Foreign Investment (Protection and Promotion) Bill 2022.

The World Bank tribunal ICSID had on July 12, 2019 slapped a cumulative $6.5 billion award against Pakistan on a dispute between the government and Tethyan Copper Company Private Limited (TCC) for rejecting the latter’s application by the mining authority of Balochistan for the multimillion dollar mining lease in the province in 2011 following the 2013 SC judgement declaring the agreement void and in conflict with the country’s laws.

CJP says court will not set aside its 2013 verdict declaring mining agreement void

On Tuesday, a five-judge SC bench issued notices to the Balochistan government, Barrack Gold Corporation, Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings (Pvt) Ltd (GHPL) to present their points of view on the questions raised in the reference and assist the court on the legal soundness of the proposed contract.

The court also asked Additional Attorney General (AAG) Chaudhry Aamir Rehman to provide a list suggesting the names of senior counsel to be appointed as amici curiae, adding that as a starting point they will address the court on the maintainability of the presidential reference under Article 186 of the Constitution in the context of the commercial deal by the federal and provincial governments.

The court fixed the next hearing on Tuesday after the AAG informed it that in addition to the $6.5bn award against Pakistan at an enforceable stage, a second dispute was also pending before the International Chamber of Commerce (ICC) and “we are expecting another award against the country to the tune of $2-3bn. But the second dispute is at a standstill stage for a period that expires on Dec 15, 2022”.

The CJP observed that the negotiation position always differed, adding that had “we have resources, we could have settled the agreement on different terms”. The courts, he observed, did not have expertise, especially when the government was seeking its opinion to sanctify a financial and commercial arrangement between parties.

Justice Bandial asked the AAG to also consider redefining the questions asked in the reference since it was too wide, stating in clear terms that the court would not set aside its 2013 judgement.

At this, Justice Yahya Afridi asked the AAG if the court could order altering the questions raised in the reference and could he being a representative of the president alter these on his behalf.

Mr Rehman recalled how last year TCC had initiated a process at the High Court of Justice in the British Virgin Islands (BVI) for attachment of Pakistan’s major assets abroad belonging to Pakistan International Airlines Investment Limited (PIAIL), including company’s interests in two hotels — Roosevelt Hotel in Manhattan, New York, and Scribe Hotel in Central Paris.

He feared that the attachment of assets would discourage Pakistan from floating any international bonds.

Justice Ijaz-ul-Ahsan wondered how the apex court comes in the picture in a commercial concession awarded by the government, which was a sovereign entity to negotiate any deal.

The AAG explained that no government or bureaucrat was ready to go ahead with the agreement against the backdrop of guidelines suggested by the apex court in the 2013 judgement.

The CJP observed that the government could seek any legal advice or legislate, adding that normally the courts interpret constitutional provisions and not commercial agreements.

Justice Ahsan observed that it was a novel approach to seek opinion on a pre-emptive question. He said the agreement seems to be a best defence strategy in the available circumstances since “our negotiating position is lopsided in view of the sword hanging over it”.

“We are not asking the court to vet the agreement, rather asking it to render opinion. Are we violating in any way the guidelines developed by the apex court through its 2013 judgement by entering into the present agreement?” the AAG asked. It was one of the requirements of the investor, he added.

When Justice Jamal Khan Mandokhel asked whether an aggrieved party could challenge the agreement in future before a court of law, the AAG said anyone could challenge the agreement.

Published in Dawn, October 26th, 2022

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