ISLAMABAD: Justice Munib Akhtar of the Supreme Court on Wednesday described the International Centre for the Settlement of Investment Disputes’ (ICSID) $6.5 billion award against Pakistan as a “nuclear bomb” since it could be taken up anywhere in the world for implementation.
The observation came when a five-member bench, headed by Chief Justice of Pakistan Justice Umar Ata Bandial, was hearing the presidential reference on the Reko Diq case.
Justice Akhtar’s observation followed the argument made by Amanullah Kanrani, who represented the Balochistan Bar Council, that the jurisdiction of Balochistan High Court had to be invoked for implementing the ICSID’s award.
CJP Bandial responded that such international penalties always addressed the country and not a province. He said when certain sovereign guarantees were given on behalf of the country, its violation entails attachment of the country’s assets in any part of the world.
On July 12, 2019, the World Bank tribunal slapped a cumulative $6.5bn penalty on Pakistan while deciding a dispute between the government and Tethyan Copper Company Pty (TCCP). The award came after the Mining Authority of Balochistan turned down a TCCP’s application seeking the multimillion-dollar mining lease in the province following the SC’s 2013 judgement.
Threat of an additional $2-3bn award in an arbitration pending before the International Chamber of Commerce looms large in case Pakistan failed to strike a deal by Dec 15, 2022.
The presidential reference has been filed to seek the SC’s opinion whether its 2013 judgement prevents the federal and provincial governments from entering into the implementation agreement afresh as well as the constitutionality of the proposed Foreign Investment (Protection and Promotion) Bill, 2022.
In 2013, the SC had annulled the Chagai Hills Exploration Joint Venture Agreement for exploring gold and copper in the Reko Diq area.
During the hearing, Mr Kanrani urged the court to direct the government to seek timeline from the international investor. He alleged that Barrack Gold Corporation (BGC), with which the government has entered into the agreement, enjoyed monopoly over gold and they wanted to cap it rather than exploring the precious mineral.
‘No corruption found’
Justice Bandial explained that he had gone through the 2013 judgement but could not find any instance of corruption on part of the international investors in the earlier agreement. Had there been a direct allegation of corruption against the investors, the arbitration at ICSID could have been stalled.
He further said that there should be a direct allegation of corruption against the investor to disengage from the international arbitration.
The CJP observed that the only reference in the 2013 judgement is that the “investors took advantage by exerting their influence” since the Balochistan government at that time lacked capacity to enter into an agreement of such huge size. He compared a similar agreement of Afghanistan, noting how Kabul had made the deal with zero investment and yet got 75 per cent royalty in return though there was unrest in the country at the time.
Additional Attorney General (AAG) Chaudhry Aamir Rehman explained that BGC would get 50 per cent share for $4.5bn whereas the federal and provincial governments would get 25pc royalty each for $900 million.
The CJP asked the AAG to provide an expert’s opinion on the structure and terms of the deal.
The SC said that an advisory body should be created on the Reko Diq issue to oversee all aspects of the agreement, APP reported. The bench then adjourned the case till Nov 7.
Published in Dawn, November 3rd, 2022