RPPs dispute: Turkish ship allowed repairs in Dubai

Published: October 23, 2013
Investment disputes centre rejects Karkey’s plea to release all four vessels. PHOTO: FILE

Investment disputes centre rejects Karkey’s plea to release all four vessels. PHOTO: FILE


The World Bank-associated International Centre for Settlement of Investment Disputes has rejected Turkish company Karkey’s plea to unconditionally release all four vessels from detention and has only allowed one power ship to sail to Dubai for repairs and then return to Pakistan’s waters.

The tribunal will take up Islamabad’s request to dismiss the Turkish company’s plea for compensation later at the arbitration stage.

The firm had leased a vessel-based power generation unit to Pakistan in 2011 as a means to alleviate the country’s dire electricity situation, but due to the intervention of the Supreme Court, the project was cancelled and the Turkish company was charged with breach of contract.

The case is still pending before the apex court and the National Accountability Bureau was asked to ensure recovery from Karkey as the apex court had identified serious violations in the contract and imposed restrictions on Karkey from leaving Pakistan without clearance.

Four of Karkey’s vessels have been held within Pakistan’s territorial waters despite several attempts by the firm to reach an out-of-court settlement and seek financial compensation from Pakistan for loss of earnings and costs.

In its order, ICSID emphasised, “This is only a temporal suspension and that the claimant will have the obligation to return the vessel as soon as it has complied with the dry docking inspections and control in Dubai.”

The Supreme Court in its judgment on March 30, 2012 had declared all RPP deals as void and had authorised NAB to take action against the RPPs.

The NAB inquiry uncovered that a deal had been struck under which Karkey would reimburse $17.5 million to Pakistan – but the Supreme Court had insisted on recovering $120 million from the Karkey power plant.

Published in The Express Tribune, October 23rd, 2013.

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Reader Comments (3)

  • Walter Brown
    Nov 14, 2013 - 12:44AM

    With the Supreme Court suddenly canceling all RPPs, is Karkey becoming the victim of Pakistani internal politics? I do not understand why the Pakistani government is discouraging international investors


  • drewall_taho
    Nov 14, 2013 - 12:53AM

    Not sure who is to blame in this blame game but detention of power ships does not seem to be the solution to the energy crisis in Pakistan.


  • Wayne Greztky
    Nov 14, 2013 - 1:04AM

    I agree… Pakistan should be open to all energy providers.


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