Pakistan assembles legal team to tackle Iran pipeline lawsuit

Iran alleges Pakistan failed to complete its pipeline duties and receive 750 MMCFD gas under their bilateral agreement

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Pakistan has assembled a high-profile legal team to defend itself in an international arbitration case filed by Iran over delays in the Iran-Pakistan gas pipeline project, a local news channel reported.

Iran filed the case in Paris, alleging that Pakistan failed to complete its part of the pipeline and to receive the expected 750 MMCFD gas under the bilateral agreement.

To support its defence, Pakistan has appointed three prominent international law firms – White & Case, Three Crowns, and Wilkie Farr & Gallagher – along with a leading Australia-based barrister with extensive experience in oil and gas infrastructure litigation.

According to officials, the legal team has been briefed on the background of the pipeline project, known as the Iran-Pakistan (IP) pipeline, and the obstacles that have prevented its completion.

Details of the legal team representing Pakistan were submitted to the arbitration court's secretariat in Paris on 18 October 2024.

Per the arbitration process, Pakistan will select an arbitrator in coordination with its legal team, while Iran will also nominate one. Both parties are expected to jointly appoint a third arbitrator, completing the tribunal and allowing proceedings to commence.

A decision is anticipated within a year once the arbitration court is fully established.

The case follows a final notice issued by Iran to Pakistan in August 2024, indicating Tehran’s intention to escalate the issue to arbitration in September if Pakistan failed to advance the pipeline project.

The IP gas pipeline project, stalled since 2014 due to US sanctions proposals, has faced delays extending over a decade.

Previously, United States issued a cautionary warning to Pakistan regarding its involvement in the Pak-Iran gas pipeline project.

Matthew Miller, a spokesperson for the US State Department, addressed concerns related to the pipeline project during a recent press briefing.

"We will continue to enforce our sanctions against Iran. And as a matter of course, we also advise anyone considering business deals with Iran to be aware of the potential ramifications of those deals," Miller stated.

This statement underscores the US's stance on maintaining pressure on Iran through sanctions, which could affect Pakistan’s proposed pipeline project.

The Pak-Iran gas pipeline project, which aims to extend an 80-kilometre pipeline from Gwadar in Pakistan to Iran, has faced significant delays.

Initially scheduled for completion by December 2014, the project has experienced nearly a decade of setbacks.

However, work has resumed, and the project is now expected to be finished in 24 months at an estimated cost of Rs44 billion.