Another Turkish firm moves ICSID against Pakistan

Construction firm Bayındır again files claim under bilateral investment treaty


Hasnaat Malik October 15, 2021

ISLAMABAD:

Turkish construction company Bayindir has again approached the International Centre for Settlement of Investment Disputes (ICSID) against Pakistan.

The Ankara-registered firm filed a claim under the 1995 Turkey-Pakistan bilateral investment treaty at the ICSID on October 12.

The Turkish firm has hired three law firms — Jones Swanson Huddell & Daschbach and Fishman Haygood in New Orleans, and Kabine Law in Istanbul — to fight the case.

Details of the case are scarce but the ICSID website read that the matter was related to the construction of a highway project.

In 2003, Bayindir had lost its claim against Pakistan at the ICSID. That case too was filed under the same bilateral investment treaty between the two countries.

That case related to a contract to build a six-lane motorway between Islamabad and Peshawar.

The contract was signed during the first tenure of former prime minister Nawaz Sharif.

However, the successive PPP government had modified the project by reducing it to a three-lane motorway.

The Turkish firm back then claimed that it had been expelled from the project unfairly.

A tribunal chaired by Switzerland's Gabrielle Kaufmann-Kohler with the UK’s Franklin Berman and Germany’s Karl-Heinz Böckstiegel dismissed the firm’s claim and ruled in favour of Pakistan in a 2009 award.

Also read: Pakistan absolved of paying $1.2b penalty to Karkey

In that case, Bayindir had used Samdani & Qureshi in Islamabad, and Sidley Austin and Stephen Schwebel in Washington, DC. Pakistan had retained Eversheds in Paris and Samuel Wordsworth QC of Essex Court Chambers.

The new ICSID claim will be unwelcome news for Pakistan, which is still fighting to annul a $5.9 billion award won in 2019 by Australian mining venture Tethyan Copper over a copper and gold deposit.

The country is currently using White & Case for the Tethyan annulment bid, though various other firms have advised it at different times during the dispute including Miami disputes boutique GST, Linklaters and Allen & Overy.

In 2019, Pakistan settled a billion-dollar ICSID award in favour of another Turkish investor, energy company Karkey Karadeniz, without making any payment. That dispute concerned the cancellation of a short-term electricity contract and seizure of Karkey’s vessels amid allegations of corruption.

The Attorney General for Pakistan's (AGP) office confirmed to The Express Tribune that Bayindir had filed case against Islamabad for the second time on the alleged violation of the investment treaty.

However, details about the case are not available yet.

A senior official of the AGP's office said that Pakistan would vigorously pursue the case at the ICSID.

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