The Imran Khan-led government of Pakistan is confronted with yet another setback in the Riko Diq case as the high court in the British Virgin Islands has directed it to present assets as bank guarantees to an international arbitrator after Islamabad failed to provide them in the past.
The court has passed an ex parte order on December 16, asking Pakistan to attack details of some of its assets as a guarantee for an international arbitrator.
As per details of the court order, Pakistan will not be able to sell assets managed by offshore companies registered in the British Overseas Territory.
Further details revealed that the Tethyan Copper Company (TCC) had asked Pakistan to provide attachments of these assets for enforcement of $6 billion award, slapped on the country by the International Centre for Settlement of Investment Disputes (ICSID) on July 12, 2019, after Islamabad revoked the TCC contract for mining at Reko Diq in Balochistan province of the country.
However, the ICSID later stayed the enforcement of the $6 billion award and later on September 17, put out an order, stating that the stay shall continue on a conditional basis.
Pakistan was asked to provide unconditional and irrevocable bank guarantee or Letter of Credit (LC) for 25 per cent of the award, plus accrued interest as of date of the decision.
Later, ICSID held that if Pakistan fails to provide security and undertaking in terms as set out within 30 days of the notification, the stay of the enforcement in the amount of 50 per cent of the award and accrued interest would be lifted.
And after Pakistan failed to meet the deadline, the British Virgin Islands high court has now ordered for provision assets.
Pakistani government maintains that it will “vigorously pursue proceedings initiated by the TCC in any jurisdiction and the government reaffirms its commitment to protecting national assets, wherever they may be located”.
As per sources, Pakistan is weighing options of an out of court settlement with the TCC during next year as Pakistan has very limited assets abroad.
The litigation of the case has continued for years with TCC, initially claiming $11.4 billion in damages for the termination of their contract, which was later brought down to at least $4.08 billion.
Pakistan government under Prime Minister Imran Khan has already spent over $10 million as legal expenditures on this case. Pakistani lawyers and some government officials maintain that it was the misstatement of scientist Samar Mubarakmand, which pushed Pakistan towards being, slapped the heavy penalty by ICSID.
Mubarakmand claimed in front of the tribunal that Reko Diq gold mines would fetch the country around $2.5 billion annually, adding that the Reko Diq and other gold reserves in the country will bring in $131 billion to the national exchequer, a statement the tribunal relied on.
In the meanwhile, the ICSID had rejected over a dozen allegations by Pakistan of attempts made by the TCC of bribing the Balochistan Chief Minister in the same case. The Reko Diq case has been manipulated and misused by many politicians and authorities through corrupt practices over the years. However, with the current challenge at hand, the Imran Khan-led government and its legal team is trying to get TCC on negotiation table in an out of court settlement.
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