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Sunday, November 26, 2023

Govt weighs options as UK Judge ruled against Pakistan in Reko Diq case

As Pakistan has lost its plea in UK high court to raise corruption charges against TCC in the International Chamber of Commerce, the government is pondering over ways to overpower the decision. One such way being thought about is appealing the decision with a higher legal authority.

National media sources are reporting that the government of Pakistan is pondering over various options on how to proceed with the Reko Diq case following the UK High Court judge’s rejection of the Balo­chistan government’s defe­nce.

The court on July 6 rejected Balochistan’s plea to raise corruption charges in the International Chamber of Commerce (ICC), which is hearing the Tethyan Copper Company’s (TCC) case against Pakistan.

The Balochistan government had argued that the International Chamber of Commerce (ICC) tribunal lacked jurisdiction in the Reko Diq case as the underlying agreement was void due to corruption.

The UK judge found that although the Supreme Court of Pakistan had rendered the joint venture void, its ruling was not based on Pakistan’s allegations that the agreement was secured through bribes, Dawn wrote.

“Descriptions of or references to corruption are insufficient: the question with which the corruption allegation is concerned is whether the Supreme Court of Pakistan found that the [agreement] and related agreements were void due to the existence of corruption,” Judge Robin Knowles of the High Court of Justice wrote.

“In my judgment, it did not. If the province has evidence relating to corruption that was not before the ICC tribunal … then it is for the province to seek to address those matters with the arbitral tribunal; it does not make it legitimate for the province to raise them with the court as a challenge to the jurisdiction of the arbitral tribunal,”  Judge Knowles reportedly wrote.

According to national reports, the government is thinking of the next moves. One such option reportedly being pondered over is appealing the decision by the London High Court judge before the Court of Appeal in the United Kingdom.

The government is reportedly approaching the higher court to present new evidence of corruption against the complainant Tethyan Copper Company (TCC) Pvt Ltd. in the Reko Diq case.

In 2019, the International Centre for Settlement of Investment Disputes (ICSID), too, had rejected Pakistan’s allegation that former Balochistan chief minister Nawab Aslam Raisani was offered a bribe of $1 million by Tethyan Copper Company in connection with Reko Diq mines in 2009.

For years, the Balochistan government has maintained this stance of government officials being bribed by the company to get an undue advantage into securing a mining license in the province.

Read More: Learning from Reko Diq: Mining Natural Resources & Maintaining Sovereignty?

History of Reko Diq

There is no doubt about the richness of Balochistan in terms of copper, gold and other precious resources. Reko Diq is an area in Balochistan famous for such natural resource deposits.

Thus, the Reko Diq Mining Project was to build and operate a world-class copper-gold open-pit mine at a cost of about $3.3bn.

According to the company, its 1998 agreement with the Balochistan government entitled it to the mining lease, subject only to routine government requirements.

The project stalled in November 2011 after the application was rejected. Pakistani officials say the mining lease was terminated by the government because it was secured in a non-transparent manner, which as mentioned was through bribes.

The case was then taken to the International Centre for Settlement of Investment Disputes (ICSID) as the company claimed $8.5 billion from the government in the form of forgone profit.

By then, the company had invested $220 million in Reko Diq. The company sought help from the World Bank arbitration tribunal in 2012, and it ruled against Pakistan in 2017, rejecting an earlier decision by the Supreme Court.

The intergovernmental tribunal decided the cost incurred by TCC in that time period, and an award of $6 billion was issued against Pakistan in July 2019. TCC began proceedings for the enforcement

In November 2019, Pakistan sought annulment of the award rendered by the International Centre for Settlement of Investment Disputes (ICSID).

Pakistan was granted the provisional stay upon initiating annulment proceedings after which a hearing to confirm the stay order took place over video link in April 2020.

On Sept 16, 2020, the tribunal finally ruled in favor of Pakistan, confirming the stay on the enforcement of the award.

However, on Nov 20, 2020, TCC moved a separate case in the BVI High Court for the enforcement of the award, which included an attachment of the assets belonging to Pakistan International Airlines Investment Ltd.

The TCC however failed to attach the PIA’s assets abroad, and the decision came in Pakistan’s favor.

Read More: PIA, Reko Diq & K Electric: Mistakes made while contracting with foreign companies

Legal experts say Pakistan’s chances of having its $6billion penalties annulled in the Reko Diq case have received a boost after the ICSID committee set aside a €128m arbitral award slapped on Spain, Tribune wrote.