Reko Diq case: Row over tribunals holds up arbitration process

Basic pact of 1993 seen as uneven as it puts the Balochistan govt at a disadvantage.

ISLAMABAD:

Disagreement over the appointment of arbitrators between the government and the Tethyan Copper Company (TCC) has held up the arbitration process over the Reko Diq gold and copper mine, The Express Tribune has learnt.

Objections by both sides to the proposed arbitrators have delayed the formation of two tribunals, which were to be set up by the International Chamber of Commerce (ICC) and the International Chamber for Settlement of Investment Disputes (ICSID), said an official on condition of anonymity.

TCC had taken the federal government to the ICC and ICSID for arbitration after the Balochistan government rejected its application for granting a mining lease. According to an earlier statement of TCC official Tim Levisky, the company had been willing to work “towards an amicable, negotiated resolution”.

When contacted for details on the objections to different nominations, the TCC spokeswoman said her CEO had been travelling. She added that she could get his version when he returned.

Talking to The Express Tribune, Ahmer Bilal Soofi, who represents the federal government before ICSID and the Balochistan government before ICC, said the nature of their dispute pertained to the basic agreement of 1993, which violated public policy. He added the agreement was uneven and put the Balochistan government at a great economic disadvantage.

Process of arbitration at ICC

When the TCC appointed David Williams as an arbitrator before the ICC, the government of Balochistan could not name any person because of the proceedings before the Supreme Court (SC), the official said. After consulting with the ICC National Committee on Pakistan, the ICC Tribunal itself nominated Aziz A Munshi, the lawyer who contested the famous Atlantic case.

Upon his nomination, Munshi said his appointment will be subject to approval by the apex court.  TCC objected to Munshi’s nomination and cited his statement “as a proof of preferential compliance to Pakistan’s national court.” The ICC withdrew his nomination thereafter. TCC objected again when ICC nominated Shahid Hamid, on grounds that he participated in the PILDAT deliberations on Balochistan.

Upon nomination of Shahid Hamid by the ICC, the TCC again objected on the ground that he had participated in Pakistan Institute of Legislative Development and Transparency (Pildat) deliberations on Balochistan. The Balochistan government wrote a letter to ICC, stating the objections were frivolous since Hamid debated Balochistan’s situation in general.

Process of arbitration at ICSID

ICSID had also been unable to form a tribunal. TCC appointed David Williams as an arbitrator in ICSID as well, in addition to ICC.

On the federal government’s behalf, Ahmer Bilal Soofi objected to Williams’ nomination as an arbitrator for ICSID. He argued that Williams could not be appointed since he was already representing tobacco giant Phillip Morris in a claim against the Australian government. Williams declined to accept TCC’s nomination.

After Williams declined TCC’s nomination, it appointed ICC president John Beechey as its arbitrator. The federal government objected to the appointment once again, stating Beechey sat in judgment on various requests of the Balochistan government as the ICC Court of Arbitration president.

The claimant’s law firm Debevoise and Plimpton LLP has in turn objected to the objections raised by the federal government. At the moment, the ICSID Secretariat is considering the objections and counter-objections.

Pakistan cannot nominate its own national as an ICSID arbitrator in the absence of an agreement between the parties. The federal government’s legal team had already short listed names of some highly credible legal experts.

They include Lord Hoffman former Canadian Supreme Court justice Loius Arbour and former International Court of Justice president Dame Rosalyn Higgins.

Arthur Marriot QC, an international mining law expert, Cherie Blair QC, Mehnaz Malik, Ahmer Bilal Soofi and the Balochistan Advocate General are representing the federal government before ICSID and the Balochistan government before the ICC.

Published in The Express Tribune, June 2^nd, 2012.