OGDCL privatisation: SC to determine High Court's jurisdiction on resolving dispute between Centre, provinces

AGP claims PHC does not have jursidiction to adjudicate on OGDCL privatisation, while K-P counsel says otherwise

ISLAMABAD: The Supreme Court has decided to determine if the high court has the jurisdiction to arbitrate disputes relating to distribution of natural resources between the Centre and the provinces.

Chief Justice of Pakistan (CJP) Justice Nasirul Mulk on Monday heard the federal government’s appeal against the Peshawar High Court’s October 3 interim order which had stayed the privatisation of Oil and Gas Development Company Limited (OGDCL).

The Supreme Court had on October 10 had allowed the government to continue with the bidding for shares OGDCL, but restrained the government from transferring or selling its shares till the case is decided.

The bench had also issued a notice to the Khyber-Pakhtunkhwa government.

On Monday, the bench, while referring Article 184 (1) of the Constitution, directed the attorney general of Pakistan, as well as K-P government’s counsel to assist it on determining whether the high court has jurisdiction to decide conflicting issues related to the distribution of natural resources between the national and provincial governments.

Article 184(1) of the Constitution reads that "the Supreme Court shall, to the exclusion of every other court, have original jurisdiction in any dispute between any two or more governments".

During the hearing on Monday, the CJP asked who will implement the formula of resource distribution between the Centre and the provinces.

AGP Salman Aslam Butt contended that the PHC had no jurisdiction to stay the privatisation of OGDCL, adding that privatisation of 10 per cent shares of the OGDCL was in the national interest.

“The bidding process, which began in May, is still going on, and will be completed within the next two days,” he said.

He added that buyers were taking keen interest in the bidding process; however, he also expressed apprehension that if the privatisation of OGDCL’s shares was stopped, it may affect the country’s economy.

He argued that the PHC verdict in the matter had not only shaken the confidence of international bidders but also dented the chance of possible foreign investment in the country.

Butt requested the court to allow the federation to complete the sale of OGDCL shares as the bidding amount shall be credited to Federal Consolidated Fund.

PHC should decide whether it has jurisdiction

Wasim Sajjad, the counsel for K-P government contended before the three member bench on Monday that the PHC should be allowed to decide whether it has the jurisdiction to decide disputes relating to natural resources between the Centre and the provinces.

He contended that the case involved distribution of money between Centre and provinces, which shall be generated through privatisation of natural resources, adding that the Privatisation Commission needed to inform them about the share of distribution.

Sajjad said that after the passage of 18th Amendment, it was mandatory to seek provincial approval for sale of provincial assets.

He also questioned the mechanism under which the federal government had decided to sell 50% share in OGDCL of the K-P government.

It is to be noted that the Cabinet Committee on Privatisation (CCoP), as well as the Privatisation Commission (PC), had put 10% or 322 million ordinary shares of the government in OGDCL on sale for international and domestic investors on October 3, 2013 and January 8-9, 2014, respectively.

Before the decision, the PC’s board, on April 22 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.

But the decision was challenged by the K-P government in the PHC, and a division bench of the high court stayed the federal government’s decision on October 3.

Now, the federal government through a petition jointly submitted by the petroleum secretary, OGDCL and the PC, has asked the apex court to suspend the high court’s interim order.

The appeal deplored the K-P government that while challenging the privatisation process, it 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.

The appeal reminded the Supreme Court that as per the 18th Amendment in Article 172 of the Constitution that any property without any rightful ownership will belong to the government of the province, as well as the federal government.

Earlier, the K-P government told the PHC that recent oil and gas discoveries in the province made it one of the richest petroleum regions in the country, producing almost half of the entire indigenous oil production and 10% of the total natural gas supplies.

It urged the court to restrain all respondents from the sale of OGDCL.

The hearing of the case was adjourned till Tuesday, October 14.