ISLAMABAD, Sept 1: The government has finalized a draft bill seeking protection of foreign investment by authorizing only the High Courts and the Supreme Court to take up cases relating to litigation.

Official sources told Dawn here on Wednesday that the draft bill will soon be referred to the Federal Cabinet for approval for removing objections of foreign investors against the country's lower judiciary.

After the bill's approval, the High Court will hear cases of arbitration, while there will be only one right of appeal in the Supreme court. The objective is to restore credibility of the judiciary by allowing only the High Courts and the Supreme Court to deal with the issues involving litigation.

Sources said that the draft bill was finalized in the light of the forthcoming negotiations to be held with the United States and Germany to separately sign investment agreements with them for which dates have also been firmed up.

According to the sources, talks with Germany will be held here on September 7 with a 3-member delegation headed by the Assistant Secretary, Ministry of Economic and Labour Affairs, Dr Hans Gerd Kousch. The delegates are Martin Hiestand, representative of the Justice Affairs Ministry and Hetzel, a senior official of Federal State Bank of Germany.

Similarly, talks between Pakistan's commerce minister and the United States' senior officials will be held from September 28 to October 1 in Washington for signing an investment treaty with a view to protect the American investment in Pakistan.

Pakistan and Germany signed their first investment agreement in 1959 which, sources said, would now be substituted by a fresh agreement. However, investment agreement with the United States was there, which according to the US officials, needed drastic improvements, particularly, to allow the US investors to seek international arbitration in case of any dispute.

The agreement with the United States will be signed in the light of overall context of the Trade and Investment Framework Agreement (TIFA). Sources said the US government was seeking special favours for its investors in the proposed agreement and in return was promising adequate investment in Pakistan.

The United States was currently the top foreign investor in Pakistan, having 30 per cent of the total investment, which sources said, was likely to be stretched to 50 per cent, provided Islamabad was ready to accept some of the harsh conditionalities.

"The US government does not accept Pakistan's internal laws pertaining to foreign investment and wants us to follow international laws if at all we are really interested to lure the American investment in our part of the world", said a concerned official.

When contacted he said that although Pakistan would not compromise on its sovereignty, it will have to face tough negotiations in Washington over the issue. "There will be a legal document in the shape of an investment treaty with the United States under which the American investors could invoke clauses relating to international arbitration in case of any dispute", the official said.

In case of violation of the treaty, he said, international arbitration will automatically be invoked and will be made a part of the proposed investment treaty. He said that foreign investors especially those of the US and Germany did not want to face a situation which was earlier experienced by M/s Bayinder of Turkey and those who worked at the Ghazi Brotha Hydle project.

Both the companies faced litigation for a long time in Pakistani courts. Matters pertaining to labour and environment laws will also be taken care of in the proposed investment agreements with the United States and Germany.