SC gives government go-ahead for bidding on OGDCL shares
However, shares can not be transferred until the conclusion of the case
ISLAMABAD:
The Supreme Court on Friday allowed the federal government to proceed with the bidding process for Oil and Gas Development Company Limited (OGDCL) shares, but restrained the government from selling or transferring shares till conclusion of the case.
The two judge bench of the apex court, headed by Justice Ejaz Afzal Khan and Justice Gulzar Ahmad on Friday took up the federal government’s appeal against the Peshawar High Court’s October 3 interim order staying privatisation of OGDCL.
The bench has also issued notice to all respondents including Khyber-Pakhtunkhwa (K-P) government and adjourned the matter until October 13.
During Friday's hearing, Attorney General of Pakistan Salman Aslam Butt has contended that privatisation of OGDCL is in national interest.
The Cabinet Committee on Privatisation (CCOP) as well as the Privatisation Commission (PC) had decided to put 10 per cent, or 322 million ordinary shares of the government in OGDCL on sale for international and domestic investors on Oct 3, 2013 and Jan 8-9, 2014 respectively. The PC’s board had even approved the appointment of a consortium consisting of Merrill Lynch International, Citigroup and KASB Bank to act as financial advisers for the sale on April 22, 2014.
However, the government's decision to privatise OGDCL was challenged by the K-P government before the Peshawar High Court (PHC), and a division bench of the high court stayed the federal government’s decision on Oct 3.
However, secretary petroleum, OGDCL and the PC jointly filed a petition in the Supreme Court, requesting the apex court to suspend the PHC’s interim order.
The appeal deplored that the K-P government, while challenging the privatisation process, had concealed important facts with mala fide intent and thus invoked the discretionary jurisdiction of the high court “with unclean hands”, especially when it was not an aggrieved party.
Therefore, the K-P government was not entitled to any discretionary relief, the appeal urged while highlighting that the provincial government was legally obliged to implead the federal government as a party, which it did not, in the first litigation before the high court. This was necessary since the original decision was made by the federal cabinet.
The appeal reminded the apex court that the constitutional change brought about by the 18th Amendment in Article 172 of the Constitution was prospective having no bearing upon the existing commitments and obligations. The constitutional provision suggests that any property without any rightful ownership of a property will vest in the government of the province where it is located as well as the federal government.
The federal government’s interest in exploration and production through OGDCL was created much earlier to the 18th Amendment and it is protected under the existing commitments and obligations as provided in Article 172(3) of the Constitution, the appeal explained.
It contended that Article 172 uses the expression “jointly vested” and explained that vesting of natural resources in the respective provinces and the federal government was in fact a public trust. Those resources belong to the people of entire Pakistan.
The K-P government’s challenge before the high court, the appeal argued, was totally misconceived and based on an incorrect interpretation of Article 172 of the Constitution, and the high court should not have ventured to enter into this political thicket by passing the stay order.
Likewise, the K-P government, in its challenge before the high court, levelled false allegations of corruption and malpractices against a large number of institutions, including the federal government, the appeal argued.
Refuting vehemently allegations of corruption levelled by the K-P government, the federal government's appeal pleaded that those allegations were pure questions of fact and could not be decided by the high court in the exercise of its constitutional jurisdiction under Article 199 of the Constitution.
OGDCL has stakes in blocks located in K-P
Earlier, the K-P government had stated before the PHC that recent discoveries of oil and gas in the province have made it one of the richest petroleum regions in the country producing almost 50 per cent of the entire indigenous oil production and 10 per cent of the total natural gas supplies.
The provincial government further stated that Exploration and Production (E&P) in up-stream oil and gas sector is carried out in different geographical regions that are called ''blocks''. Territories comprising K-P are divided into 22 blocks, where-against petroleum rights and concessions are awarded to different E&P Companies. He argued that OGDCL has a significant footprint in and hold on oil and gas resources in the Province with 100 per cent ownership in Latambar, Wali, Pezu, Hetu, Dhakni, Baratai and Orakzai Blocks, whereas a sizable interest is owned in other blocks as well as Tal (30%), Gurgalot (75%), Nashpa (65%), Kohat (30%) and Bannu West (40%).
The OGDCL owns up to 27.76 per cent stakes in major producing fields such as Makori, Makori East, Manzalai, Mamikhel, and Maramzai, besides having non-operating interests in numerous other interests.
"All these irrefutable facts and figures make OGDCL one of the biggest players in the oil and gas sector for the Province of Khyber-Pakhtunkhwa as well,"
The provincial government had urged the court to restrain all the respondents from transferring, alienating or diminishing existing shareholding or giving effect to impugned sale, adding that the entire process of impugned sale may also be declared void ab-initio and ultra vires.
Accepting the plea of the provincial government, the PHC on October 3 had directed the OGDCL, SECP and Privatisation Commission to file comments in response to the petition and adjourned hearing of the case till October 20.
The Supreme Court on Friday allowed the federal government to proceed with the bidding process for Oil and Gas Development Company Limited (OGDCL) shares, but restrained the government from selling or transferring shares till conclusion of the case.
The two judge bench of the apex court, headed by Justice Ejaz Afzal Khan and Justice Gulzar Ahmad on Friday took up the federal government’s appeal against the Peshawar High Court’s October 3 interim order staying privatisation of OGDCL.
The bench has also issued notice to all respondents including Khyber-Pakhtunkhwa (K-P) government and adjourned the matter until October 13.
During Friday's hearing, Attorney General of Pakistan Salman Aslam Butt has contended that privatisation of OGDCL is in national interest.
The Cabinet Committee on Privatisation (CCOP) as well as the Privatisation Commission (PC) had decided to put 10 per cent, or 322 million ordinary shares of the government in OGDCL on sale for international and domestic investors on Oct 3, 2013 and Jan 8-9, 2014 respectively. The PC’s board had even approved the appointment of a consortium consisting of Merrill Lynch International, Citigroup and KASB Bank to act as financial advisers for the sale on April 22, 2014.
However, the government's decision to privatise OGDCL was challenged by the K-P government before the Peshawar High Court (PHC), and a division bench of the high court stayed the federal government’s decision on Oct 3.
However, secretary petroleum, OGDCL and the PC jointly filed a petition in the Supreme Court, requesting the apex court to suspend the PHC’s interim order.
The appeal deplored that the K-P government, while challenging the privatisation process, had concealed important facts with mala fide intent and thus invoked the discretionary jurisdiction of the high court “with unclean hands”, especially when it was not an aggrieved party.
Therefore, the K-P government was not entitled to any discretionary relief, the appeal urged while highlighting that the provincial government was legally obliged to implead the federal government as a party, which it did not, in the first litigation before the high court. This was necessary since the original decision was made by the federal cabinet.
The appeal reminded the apex court that the constitutional change brought about by the 18th Amendment in Article 172 of the Constitution was prospective having no bearing upon the existing commitments and obligations. The constitutional provision suggests that any property without any rightful ownership of a property will vest in the government of the province where it is located as well as the federal government.
The federal government’s interest in exploration and production through OGDCL was created much earlier to the 18th Amendment and it is protected under the existing commitments and obligations as provided in Article 172(3) of the Constitution, the appeal explained.
It contended that Article 172 uses the expression “jointly vested” and explained that vesting of natural resources in the respective provinces and the federal government was in fact a public trust. Those resources belong to the people of entire Pakistan.
The K-P government’s challenge before the high court, the appeal argued, was totally misconceived and based on an incorrect interpretation of Article 172 of the Constitution, and the high court should not have ventured to enter into this political thicket by passing the stay order.
Likewise, the K-P government, in its challenge before the high court, levelled false allegations of corruption and malpractices against a large number of institutions, including the federal government, the appeal argued.
Refuting vehemently allegations of corruption levelled by the K-P government, the federal government's appeal pleaded that those allegations were pure questions of fact and could not be decided by the high court in the exercise of its constitutional jurisdiction under Article 199 of the Constitution.
OGDCL has stakes in blocks located in K-P
Earlier, the K-P government had stated before the PHC that recent discoveries of oil and gas in the province have made it one of the richest petroleum regions in the country producing almost 50 per cent of the entire indigenous oil production and 10 per cent of the total natural gas supplies.
The provincial government further stated that Exploration and Production (E&P) in up-stream oil and gas sector is carried out in different geographical regions that are called ''blocks''. Territories comprising K-P are divided into 22 blocks, where-against petroleum rights and concessions are awarded to different E&P Companies. He argued that OGDCL has a significant footprint in and hold on oil and gas resources in the Province with 100 per cent ownership in Latambar, Wali, Pezu, Hetu, Dhakni, Baratai and Orakzai Blocks, whereas a sizable interest is owned in other blocks as well as Tal (30%), Gurgalot (75%), Nashpa (65%), Kohat (30%) and Bannu West (40%).
The OGDCL owns up to 27.76 per cent stakes in major producing fields such as Makori, Makori East, Manzalai, Mamikhel, and Maramzai, besides having non-operating interests in numerous other interests.
"All these irrefutable facts and figures make OGDCL one of the biggest players in the oil and gas sector for the Province of Khyber-Pakhtunkhwa as well,"
The provincial government had urged the court to restrain all the respondents from transferring, alienating or diminishing existing shareholding or giving effect to impugned sale, adding that the entire process of impugned sale may also be declared void ab-initio and ultra vires.
Accepting the plea of the provincial government, the PHC on October 3 had directed the OGDCL, SECP and Privatisation Commission to file comments in response to the petition and adjourned hearing of the case till October 20.