A day after a British Virgin Islands (BVI) court ruled that Pakistan could retain its assets earlier attached in connection with the Reko Diq mines case, the country’s law minister said an out-of-court settlement with a mining company was not out of the question.
"An out-of-court settlement with the Tethyan Copper Company (TCC) is still not out of question,” said Federal Minister for Law Dr Farogh Naseem in a press conference on Wednesday.
"We have told the TCC there won't be any corruption this time. The company has responded saying ‘the assurance is music to the ears’,” he added.
The TCC had sought attachment of Pakistan’s foreign assets for enforcement of a $6 billion award that the International Center for Settlement of Investment Disputes (ICSID) slapped on the country on July 12, 2019 for revoking the TTC contract for mining at Reko Diq in Balochistan in 2013.
The ICSID later stayed the enforcement of the $6b award and on September 17, 2019 issued a 70-page order which said the stay shall continue on a conditional basis.
The arbitrator had ordered Pakistan to provide an “unconditional and irrevocable” bank guarantee or the letter of credit (LC) for 25% of the award, plus accrued interest as of the date of the decision.
The guarantee was to come from a reputable international bank based outside of Pakistan, which was pledged in favour of the claimant —the TCC — and to be released on the order of the ICSID.
The ICSID had also held that if Pakistan could not furnish the security and undertaking in terms as set out within 30 days after notification of the decision, the stay of enforcement in the amount of 50% of the award, plus accrued interest as of the date of the decision would be lifted.
However, Pakistan missed the deadline and did not deposit 25% bank guarantee and the BVI’s High Court of Justice attached the Roosevelt Hotel in New York and the Scribe Hotel in Central Paris, both the properties of the Pakistan International Airlines (PIA).
The same court on May 25, however, retracted its earlier order and ruled that the PIA could retain its two assets. Talking with reference to this legal victory, the minister said at the international tribunal, Pakistan had held the stance that the Reko Diq deal was a result of corruption.
“The Supreme Court had annulled the agreement due to that corruption. A deal that's an outcome of corruption doesn't come under the ambit of legal investment." He said the BVI high court accepted the aspect regarding the sovereign exemption, which will help in [resolving the] the original case.
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The TCC has till June 4 to appeal against the decision of the BVI, he added.
"It is true that the BVI's decision is related to the PIA hotels," he said, adding that it is "crucial in terms of giving our economy a support that our stance was approved in the court." He noted that in the past, tribunal's ambit has been accepted only after a notice of mediation was received.
The minister said the doctrine of sovereign immunity was an important point, which had been given up by the PPP government in the Nizam of Hyderabad Deccan case. He said he highlighted the sovereign immunity issue before the BVI court.
“The law ministry also engaged the TCC and informed it that Prime Minister Imran Khan's government would not allow anyone to mint money,” he added.
Dr Naseem congratulated the entire nation, especially Prime Minister Imran Khan and his cabinet, for success in the Reko Diq case. "[Pakistan was facing] a penalty of $6.5 billion dollars internationally in the Reko Diq case, besides other cases including the Karkey dispute."
“[In 2019,] the premier appointed me as the chairman of the committee in the Reko Diq case. We went to the US and the UK and met the lawyers [there]."
"We replaced many lawyers,' he said, adding that, "[former Attorney General for Pakistan] Anwar Mansoor Khan, [incumbent AGP] Khalid Javed Khan, and Ahmed Irfan Aslam made immense efforts [to resolve the case]."
Aslam was bestowed with a Sitara-e-Imtiaz on the recommendation of the law ministry, he added.
Earlier, while commenting on the decision, the spokesperson of the law and justice ministry termed the decision a major victory for Pakistan. Due to the verdict, he said, the country's assets of billions of rupees got saved from being auctioned or frozen.
"All decisions against the PIA have been withdrawn. Pakistan has got back [ownership of] Roosevelt and Scribe hotels due to the decision. Pakistan effectively defended its stance against the plea filed by the TCC company, which will now have to bear all the costs of the case,” the spokesperson added.