ISLAMABAD: The International Center for Settlement of Investment Disputes (ICSID) has levied a penalty of $5.976 billion against Pakistan in its 700-page ruling.
The ICSID awarded a $4.08 billion penalty and $1.87 billion in interest.
According to the sources privy to the matter, Pakistan has decided to challenge the decision before an international court by filing a revision application. Tethyan Copper Company’s (TCC) management had claimed $11.43 billion in damages.
The company filed claims for international arbitration before the ICSID in 2012 after the Balochistan government turned down a leasing request from the company.
The lawsuit between the government of Pakistan and the international company lasted for as many as seven years. The Supreme Court of Pakistan, under then Chief Justice Iftikhar Chaudhry, terminated the deal in 2013.
The court, earlier, held the view that Pakistan is mandated to pay damages for breach of contract.
The Pakistani government will conduct an internal review of ICSID’s “long-standing arbitration” between the state and TTC while a commission will be constituted to investigate who was responsible for the predicament that may cost Pakistan $5.976 billion.
A press release by the office of the Attorney General for Pakistan, dated July 13, said Pakistan was “disappointed” with the decision and added that Prime Minister Imran Khan has directed that a commission be constituted to “investigate reasons as to how Pakistan ended up in this predicament, who [was] responsible for making the country suffer such a loss and what are the lessons learnt, so that mistakes made are not repeated in the future”.
All stakeholders, including the Balochistan government, were looking into the legal and financial implications of the decision “will take a position” on the matter after considering all aspects, the statement added.
The statement further added, “for now, the government of Pakistan reserves its right to pursue any and all legal remedies available to it under the ICSID regime, international law, and all other relevant laws to safeguard its interests.”
Taking a statement by Tethyan board chair William Hayes in which he had expressed willingness to work with the government in order to reach a mutually negotiated settlement into consideration, the statement said that Pakistan “welcomed this approach to work towards a mutually beneficial solution that works for both sides”.
Hayes had said in a statement the company was still “willing to strike a deal with Pakistan,” but added that “it would continue protecting its commercial and legal interests until the dispute was over.”