Pakistan Arbitration body starts hearing Turkish firm’s plea

AGP Salman Aslam Butt is in England to defend the government


Hasnaat Malik February 29, 2016
AGP Salman Aslam Butt is in England to defend the government. PHOTO: FILE

ISLAMABAD: The International Centre for Investment Disputes (ICSID) on Monday opened the last round of hearing of a Turkish power company’s lawsuit of $2.1 billion in damages against Pakistan.

Attorney General for Pakistan Salman Aslam Butt left for England last week to attend the hearings that will be conducted between February 29 and March 11. The government has also hired the services of UK-based legal firm Allen and Overy for the case filed by Karkey Karadeniz Electricity Production Corporation (Karkey).

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Sources in the AGP office told The Express Tribune that contrary to the previous government’s decision, AGP Butt has decided not to hire local lawyers along with the international firm for perusing cases at the international forum.

The AGP is himself representing the country in such matters in order to save public money.

An official said a few senior officials of the water and power ministry and the National Accountability Bureau had also flown abroad to attend the proceeding as witnesses.

He criticised former chief justice Iftikhar Chaudhry for issuing such judgments, which were now causing international litigations.

The official expressed apprehensions the recent arrest of Raja Babar Zulqarnain, who worked as a middle-man in the deal between Karkey and the government, might affect Pakistan’s legal position before the ICSID.

On Jan 31, 2014, Karkey had filed the claim worth $2.1 billion against the Pakistani government for breaching its obligations under the bilateral investment treaty (BIT), breaches of international law and defiance of ICSID provisional measures order, in connection with Karkey’s investment in a rental power project (RPP) in Karachi.

Karkey was one of the 12 companies awarded contracts in 2009. The Supreme Court later scrapped all the deals made by the government with RPPs set up since 2006 by declaring them illegal, non-transparent and invalid.

The SC on November 26, 2012, ordered NAB to recover $128 million from Karkey.

According to Karkey, Islamabad did not comply with ICSID’s demands and continues to detain the power-producing vessel.

Karkey’s investments in Pakistan originated when the authorities announced an international competitive bid for energy firms to provide relief from continuing power shortages through the use of RPP. Karkey won one of the bids and sent four vessels, including two of its Turkish-flagged power ships, supplying 232MW.

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Pakistani officials had said that in an earlier claim lodged by Karkey, the ICSID tribunal in its October 16, 2013 order had rejected all claims of the power firm, merely allowing the ship to temporarily sail to Dubai for mandatory dry-docking (maintenance).

In July 2014, ICSID had rejected the plea of the water and power ministry against the jurisdiction of a tribunal hearing the $2 billion damages suit of Karkey.

Published in The Express Tribune, March 1st, 2016.

COMMENTS (2)

A thinker | 8 years ago | Reply This shows the level of competence our Government has!!! By doing substandard hiring in govt offices and by hiring 3rd class civil servants... this was deemed to result in this.
Brainy Bhaijan | 8 years ago | Reply From the looks of it, the government of pakistan might end up paying a few hundred million dollars in settlement fines, thanks to the personal ego and mis-adventures of iftikhar chaudary.
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