By Hasnaat Mailk in The Express Tribune, July 17, 2019
ISLAMABAD: The next couple of months are crucial for Pakistan’s cases at international legal forums, The Express Tribune has learnt.
According to Foreign Office sources, the International Centre for Settlement of Investment Disputes (ICSID) has recently closed proceedings to determine the quantum of the damages to be awarded against Pakistan in the Reko Diq mines case and may announce a decision either towards the tail end of this month or the one after.
Simultaneously, the sources said that International Court of Justice (ICJ) judges have also completed deliberations on the case of Kulbhushan Jadhav – the Indian spy Pakistan arrested in Balochistan and sentenced to death in connection to various terror and sabotage activities – and may announce a verdict next month.
Although there is no official confirmation that ICJ judges have finished deliberating, legal experts believe the international court will end up rejecting New Delhi’s plea for the spy to be handed over. At the same time, they say it is likely Pakistan will be instructed to grant India consular access to Jadhav. Whatever the case, it would be the first time an ICJ judges panel will give a ruling on a matter pertaining to consular access to a spy.
Meanwhile, sources said top Pakistani officials are preparing for a second round of dialogue to come to an out-of-court settlement in the Reko Diq case, wherein the complainant company whose contract was terminated is claiming $11.43 billion in damages before an international tribunal. A date has not yet been finalised.
Consultations with the intention of avoiding a huge penalty for Pakistan began before any award in the case was even announced, sources said. ICSID has already declared that Pakistan is liable to pay damages.
After taking all stakeholders into confidence, Law Minister Dr Farogh Nasim and Attorney General for Pakistan Anwar Mansoor Khan visited the United States to negotiate a deal but an out-of-court settlement remained elusive.
A senior lawyer who has closely followed proceedings of such cases at international forums said there is no chance the second round of dialogue will end in success since ICSID is close to issuing an award in the Reko Diq case. “Three judges have already conveyed the award will be announced in the last dates of April or next month,” the lawyer added.
Earlier efforts for an out-of-court settlement were also unfruitful. ICSID judges, Pakistan’s legal team led by Cherie Blair – the wife of UK’s former prime minister Tony Blair – and ex-AGP Salman Aslam Butt were unsuccessful in convincing concerned parties to initiate negotiations.
Legal experts have appreciated the government’s efforts to come to a lower out-of-court settlement as the country is already facing penalties running into billions of rupees in the Karkey and Broadsheet cases. They also expect that Tethyan Copper Company’s (TCC) management must also realise that execution of the award would take time and annulment will also take another couple of years.
However, it is still not clear what are Pakistan’s chances of getting to a more reasonable out-of-court settlement.
On the other hand, International Chambers of Commerce in London (ICC) is likely to resume hearing the TCC plea against the Balochistan government as well.
After the case was filed, Pakistan lost its first jurisdictional challenge, when the international tribunal said that it has the jurisdiction to adjudicate the Reko Diq matter. After that, the tribunal declared that there was no wrongdoing in the agreement – the grounds on which the Supreme Court of Pakistan terminated the deal in 2013 – and eventually, the tribunal held that Pakistan is liable to pay the damages.
The only remaining issue in the case is the determining the final quantum of liability, which will be announced in summer.
In 2012, TCC filed claims for international arbitration before the ICSID of the World Bank after the provincial government turned down a leasing request from the company.
In the ICSID proceedings, the jurisdiction and liability have been decided against Pakistan, as the tribunal has found that Pakistan breached the Bilateral Investment Treaty of 1998 between Pakistan and Australia, the Balochistan mines secretary informed the PAC.
According to the ICSID, the Supreme Court’s decision to declare the joint venture agreement illegal did not diminish the TCC investment. According to the provincial government, even malpractices and corruption by TCC did not deny it investment rights.
In 2013, the Supreme Court declared that Chejva and all of its successor agreements were void ab initio (from the start) and that TCC had no legal rights to explore and mine in Reko Diq. As of March 2017, Pakistan has incurred $15.5 million in expenses on the arbitration case, while TCC’s expenses are estimated at $39.2 million.
A number of senior lawyers have been critical of former chief justice Iftikhar Chaudhry for passing judgments which in ensuing years have caused headaches for policymakers and concern for international investors. “Why would international investors come to invest Pakistan when your local courts are passing judgment without considering prevailing circumstances,” said a senior lawyer.
Reko Diq is part of the Tethyan Magmatic Arc, which is a mineralised belt that originates in Eastern Europe and runs through to Iran, Afghanistan and into Pakistan. It holds an estimated 5.9 billion tons of mineral resources, with an average copper grade of 0.41% and 0.22 grammes gold per tonne.
Broadsheet LLC case hearing next month
London High Court will also take up Pakistan’s appeal next month against the London Court of International Arbitration (LCIA) decision to award a penalty of $21 million (Rs2.93 billion) to the country in the infamous Broadsheet LLC case.
Both sides have already filed their submissions and hearing will be conducted next month.
The National Accountability Bureau (NAB) had filed an appeal against LCIA in London High Court under section 68 of the UK Arbitration Act on the basis of two grounds. Firstly, NAB contends that the tribunal failed to conduct the proceedings in accordance with the procedures agreed by the parties. Secondly, the LCIA did not comply with the requirements as to the form of the award. It is expected that fate of appeal will also be decided next month as well. There is less chance that the quantum of award will be revised by London High Court.https://tribune.com.pk/story/1954887/1-pakistan-awaits-major-verdicts-bated-breath/
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