International litigation: Pakistan slapped with $700m fine in RPP case

Published: September 20, 2017


ISLAMABAD: The International Centre for Settlement of Investment Disputes (ICSID) has awarded $700 million to Karkey Karadeniz Elektrik Uretim AS, a Turkish company that constructs and operates rental power plants (RPPs), in a damages suit it had brought out against Pakistan.

According to the ICSID website, the award was announced on August 22, but sources told The Express Tribune the centre had given its verdict in March 2016 and now the tribunal has determined the quantum of the award, which is around Rs74 billion.

Government looks to renegotiate with RPPs

Sources revealed the award was kept secret by the Pakistan government. Not just that, the Turkish firm was also requested to keep details of the demeaning award under wraps.

Karkey had filed the damages suit against Pakistan at the ICSID in February 2013 after the Supreme Court’s ruling in the Rental Power Projects case in 2012.

Karkey was awarded a $560 million contract for power ship operations in Pakistan to overcome a spiralling power crisis in the country. The initial contract was for five years. However, PPP-Patriots leader Faisal Saleh Hayat and the current foreign minister Khawaja Asif approached the top court against the contract awarded by the then PPP government.

In 2012-13, then NAB prosecutor general KK Agha attempted to settle the issue with Karkey but the then chief justice Iftikhar Chaudhry stopped his efforts and warned NAB officials of strict action in case a settlement was reached with the Turkish firm.

At present, accountability courts are adjudicating corruption references filed over the RPP issue against several senior officials, including former prime minister Raja Pervez Ashraf. A senior official feared the ICSID verdict might affect NAB’s proceedings in these cases.

Karkey’s case is not the only one where Pakistan had to bite the dust. In the Reko Diq case, the ICSID dismissed Pakistan’s allegations of corruption against the Tethyan Copper Company Pty Ltd (TCC). Later, the TCC made a claim of $11.5 billion but Pakistan’s rejected it. Now the quantum stage has started, with both federal and Balochistan governments involved, and the TCC may agree to an out-of-court settlement.

RPPs case: NAB ‘discreetly’ ends probe without informing SC

Sources said the quantum phase of the arbitration is a prolonged, self-contained phase in itself, in which the office of the attorney general for Pakistan is actively participating in defence of the country.

At present, AGP Ashtar Ausaf is abroad to deal with several issues, as Pakistan faced international litigations in a number of cases, including Indian spy Kulbhushan Jadhav’s case at the International Court of Justice.

Last week, Pakistan requested the World Bank to establish a court of arbitration to decide on Pakistan’s objection over two dam projects of India. It is leant that Pakistan has spent more than Rs1.3 billion on lawyers’ fees to contest the cases which are recently being adjudicated before the ICJ.

Raheel Kamran Sheikh, an executive member of the Pakistan Bar Council, said it was a matter of concern that Pakistan’s success rate in international arbitration cases was 2 per cent, while India’s success rate was 60 per cent.

“We lost important cases at international forums in the last couple of years,” Sheikh said. However, an official differed, claiming that the success rate was ‘very good’ during the era of former military ruler Pervez Musharraf.



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Reader Comments (8)

  • Anoni
    Sep 20, 2017 - 9:46AM

    Just follow up of trump retrorics .. leverage they are using . In all cases Pakistan will lose. i.e water .. reko deka .. etc

    Part of the blame is that we seems to have non merited and dishonest people working at top positionRecommend

  • rk singh
    Sep 20, 2017 - 10:19AM

    Not friendly nations, after all.Recommend

  • mahakaalchakra
    Sep 20, 2017 - 10:22AM

    You just can not deceive all nations all the time.Recommend

  • yasser kidwai
    Sep 20, 2017 - 12:14PM

    Please take a all the people that have caused these projects to fail and take all their assests and give them hard labour to try and pay off this loss.Recommend

  • Lilly
    Sep 20, 2017 - 1:35PM

    More than dishonesty, Pakistanis are not smart. They have to choose which case to fight and which to settle.Recommend

  • Zulfiqar
    Sep 20, 2017 - 5:45PM

    Shame on IFTEKHAR CHAUDHRY who did not allow the power projects.Recommend

  • Duh...
    Sep 20, 2017 - 6:19PM

    @Anoni: “Part of the blame is that we seems to have non merited and dishonest people working at top position”

    And part of the reason is your cases have no merit. Your media anchors may convince gullible Pakistanis but not international courts.Recommend

  • Haji Atiya
    Sep 21, 2017 - 3:40AM

    @yasser kidwai:
    “Hard labour”, where ? Dubai and London ?Recommend

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