ICSID stay

Letter September 22, 2020
Another impending danger has been kept at bay as the ICSID has granted a stay on the enforcement of a penalty imposed upon Pakistan in the Reko Diq mining lease dispute

KARACHI:

It is heartening to know that our FDI has improved during last month. The 23.5% increase amounting to $112.3 million is a good sign for our economy, keeping in view the current recession caused by Covid-19. Such momentum is required to be maintained for economic stability and development.

Another impending danger has been kept at bay as the ICSID has granted a stay on the enforcement of a penalty imposed upon Pakistan in the Reko Diq mining lease dispute. The penalty worth $5.97 billion including $1.87 billion interest was awarded against Pakistan for denying a mining lease to Tethyan Copper Company (TCC) on 12th July 2019. It was a historic as well as one of the largest ever penalties imposed by ICSID. However, as per news reports appearing in sections of the press, certain strings are attached with this stay. Pakistan will have to furnish 25% of the $4.08 billion as a guarantee, another huge burden on foreign exchange resources. Incidentally, William Hayes, the chairman of the TCC board of directors, has expressed willingness for a negotiated settlement and while legal teams are working for the annulment of this award, it will indeed be a hard nut to crack. Therefore, all the pros and cons of the case must be considered before moving further.

Already, large amounts of foreign exchange are spent on legal proceedings and choosing this path may further damage the goodwill of our country. But so far, the stay order is a welcome decision. Our legal teams must spend all energies to find a viable solution to this unprecedented case.

Iftikhar Mirza

Islamabad

Published in The Express Tribune, September 22nd, 2020.

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