ISLAMABAD: Attorney General Ashtar Ausaf on Thursday claimed that the International Centre for Settlement of Investment Disputes (ICSID) — a World Bank-funded tribunal — had accepted Pakistan’s evidence against the international firm over the terminated Reko Diq mining contract.
However, he contended that ICSID had declined Pakistan’s request to dismiss financial claims by the Tethyan Copper Company (TCC) over the termination of a multimillion dollar mining lease in Balochistan, adding that the case would therefore proceed.
“The order by the tribunal of March 20 states that the tribunal has admitted Pakistan’s evidence on the record,” Mr Ausaf explained in an announcement issued by the AG’s office, admitting that the tribunal had not dismissed the TCC’s claims.
Ashtar Ausaf says WB-funded tribunal has turned down govt request to dismiss TCC’s $400m claim
Pakistan had adopted the plea that the agreement/mining licence at Reko Diq was procured through corrupt means and, therefore, the claimant (TCC) cannot ask for damages.
The tribunal took up the dispute between Pakistan and the TCC after the latter’s application was rejected by the Mining Authority of Balochistan.
The Supreme Court, in January 2013, had declared void the Chagai Hills Exploration Joint Venture Agreement, signed between the Balochistan government and Australian mining company BHP in 1993. After the decision, the BHP sold its stakes in the venture to TCC.
TCC had invoked the jurisdiction of ICSID against the prospective Reko Diq Minerals Licence, claiming a loss of investment amounting to $400 million. the TCC is a Canadian and Chilean consortium of Barrick Gold Corporation and Antofagasta PLC, formed to explore gold and copper at Reko Diq — a small desert town in Chagai, Balochistan, that sits over the Tethyan copper belt and is known for having the fifth largest deposits of gold and copper in the world.
The AG explained that the recent ICSID tribunawl order was not a final order or award in the matter of TCC versus Pakistan. “It is part of a series of orders issued at the end of each distinct phase of the hearing,” the AG explained, adding that the tribunal’s order had been issued at the end of a phase where Pakistan presented evidence of alleged corruption by TCC and its representatives.
In Sept 2015, Pakistan had filed an application requesting the tribunal to dismiss the claims by TCC on grounds of corruption. Pakistan presented detailed evidence of corrupt practices by TCC in relation to its investment in the Riko Diq project, the AG stated.
This order brings to an end the “corruption” phase and it will now proceed with the “quantum” phase.
Explaining further, the AG stated that in this phase, the claimant (TCC) will now present its case for the value of compensation it seeks for terminating the licence.
Pakistan will rigorously contest any amount claimed by the claimant, AG said, adding that the final liability, if any, would be determined at the end of quantum phase.
The ICSID system, he explained, also provided for “annulment” of an award and other remedies and options were available to Pakistan within and outside of international arbitration, which it continues to consider fully.
Pakistan reserves the right to challenge the validity and enforceability of any order passed by ICSID tribunal, he said.
Published in Dawn, March 24th, 2017