ISLAMABAD, May 16: Attorney General Makhdoom Ali Khan on Thursday stated before the Supreme Court that SGS, whose contract for providing “services” as pre-shipment inspection company had not brought any kind of investment to Pakistan, had no right to approach ICSID under the bilateral investment treaty between Pakistan and Switzerland.

The three-judge bench comprising Justice Munir A. Sheikh, Justice Qazi Mohammad Farooq, and Justice Abdul Hameed Dogar, continued hearing of the appeal of SGS in which it asked the court to issue direction that no arbitration proceeding should continue in Pakistan as the company had already taken the matter to the International Centre for Settlement of Investment Disputes. The hearing is likely to conclude next week.

Attorney General Makhdoom Ali Khan argued that when the pre-shipment inspection contract was terminated, the company had a number of choices available.

The company, after accepting the termination, sued Pakistan in Switzerland. After the rejection of the company case on merits by the Swiss Supreme Court, the company joined the proceedings in Pakistan and filed a counter claim against Pakistan in a civil court in Islamabad.

After its failure in the Swiss courts, the company decided to go before ICSID. He said if Swiss company was given the permission to continue availing itself of the remedies, one after the other, the Pakistan’s Supreme Court would be discriminating its own citizens who were consistently denied the right to second remedy after availing one.

The AG referred to the petition of SGS filed before the Swiss court to substantiate his contention that all the relevant points were raised by the company there, but the petition was dismissed on merit and not on the grounds of mere technicalities.

He said Pakistan did not file any application for initiation of arbitration proceedings till the time the Swiss courts decided their application on merits and asked the company to go for arbitration in Pakistan.

The AG stated that the statement of SGS that its application had been registered by the ICSID, hardly carried any value. He said that registration of an application by ICSID was almost identical to institution of a civil suit in the civil courts in Pakistan.

He also referred to the application of SGS which it had filed before the ICSID, saying that relevant facts, such as dismissal of its petition from the Swiss courts and its joining of proceedings in Pakistan by filing counter claims, were suppressed.

One possible explanation for suppressing the facts, he stated, was that they were apprehensive that their application might not even be registered by the ICSID.

The Supreme Court would continue hearing the case till next week. The court had decided to hear the appeal to decide three points:

i) Whether the arbitration agreement between Pakistan-SGS continued to remain valid after the Pak-Swiss treaty?

ii) Whether the SGS was an “investor” within the meaning of the Pak-Swiss treaty?

iii) Whether the SGS had waived its right to ICSID arbitration in view of its conduct in pursuing its claims before the Swiss courts and filing a counter claim before the Civil Judge, Islamabad.