Reko Diq debacle

Reko Diq debacle

The International Center for Settlement of Investment Deputes (ICSID), in its ruling in Reko Diq case imposed a massive penalty of $5.976 billion on cash strapped Pakistan. The Prime Minister has been informed about this fiasco in International Arbitration of disputes that are being caused by shady deals of previous governments. The fine announced in this case is unprecedented in the ICSID history of settlement of investment disputes.

The matter was taken to this International Arbitration Forum by Tethian Copper Company in 2012. A three member bench of the Supreme Court, headed by former Chief Justice Iftikhar Muhammad Chaudhry in a verdict on a writ petition filed by Maulana Abdul Baqi Baluch and others declared the lease agreement with company null and void.

The terms and conditions of the agreements that were made with foreign and Pakistani companies were mostly written by foreign contract writers and were fairly loaded against the national interests and serving the vested interests. When Pakistan lost an arbitration case against 9 IPPs in London Court of International Arbitration and had to pay rs.11 billion then a media debate started as to why successive government did not develop a professionally competent team of legal experts for drafting and vetting of agreements to secure national interest. The self serving leadership of PPP included the idle capacity payment clauses in the agreements with IPPs and because of these clause electricity consumers has to pay Rs.650 billion during the last fiscal year alone.

When the PTI government came to power, it hinted at renegotiation of LNG agreement with Qatar. In September, 2018 former federal Minister for Petroleum and Natural Resources Ghjulam Sarwar Khan had said if violation of Public Procurement Rules were found in the LNG agreement between PSO and Qatargas then it will be renegotiated. Again in December last year he said that government was considering the prospects of renegotiating this agreement. But one month later in January this year he has to say that Pakistan will uphold the LNG agreement with Qatar. Perhaps in this agreement which was made during the last PML-N government in 2016 for 15 years the hands of Pakistan have been tied at the back. Hence showing sagacity, the present government refrained from the renegotiation option or indulging in dispute for its likely unintended results.

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