ISLAMABAD: As required by an arbitrator for continuation of a stay on a $6 billion Reko Diq gold mines award, Pakistan has refused to offer a “unconditional and irrevocable” bank guarantee or letter of credit (LC).
However the authorities insist that no detrimental impact on the country can be caused by this failure. On September 17, the International Center for Settlement of Investment Disputes (ICSID) released a 70-page order in which it was agreed that the $6 billion reward stay in compliance, the same platform granted on July 12, 2019, should be extended on a conditional basis.
The order specified that Pakistan is to provide 25 percent of the award with a “unconditional and irrevocable” bank guarantee or LC, plus accrued interest as of the date of the ruling. The guarantee or LC was to come from a foreign repu-table bank headquartered outside Pakistan, which was pledged in favour of the claimant, Tethyan Copper Corporation (TCC), which was to be issued on the order of the ICS.
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The ICSID also held that if Pakistan were unable to provide protection and an undertaking under the conditions laid down within 30 days of notice of the verdict, the stay of compliance would be lifted at the rate of 50 per cent of the award plus accumulated interest as of the date of the decision. Pakistan skipped the deadline, though and did not deposit a bank guarantee of 25 percent.
There is still debate about the consequences of lifting the order of stay. Sources revealed to The Express Tribune that after its inability to have the bank guarantee, Pakistan won’t pay a single penny fine.
Sources have said, however that compliance proceedings surrounding the implementation of US$6 billion will be reopened, and could not be completed in a decade. The TCC has launched litigation against Pakistan in the United States and Australia, according to the reports, and Pakistan has already hired lawyers in both countries to appeal the compliance proceedings.
As Pakistan has small assets abroad, senior lawyers with foreign law experience said the organisation will find it very difficult to execute the prize. Therefore in this situation, a negotiated solution is still potentially the most possible outcome. The sources said Pakistani officials are actively involved in an out-of-court deal with the company officers.
The business is unlikely to seek compliance action due to the talks. Likewise, the Pakistani authorities are very vigilant and do not want to take any action that could have a negative effect on the climate of the ongoing talks between the two sides. The sources disclosed that the authorities had expressed serious concern about the decision of the National Accountability Bureau (NAB) to file a reference in the Reko Diq case against Pakistani officials.
Senior lawyers claim the NAB should be prohibited from doing anything adverse to the welfare of the country. The ICSID has also denied Pakistan’s claim that the TCC gave a $1 million bribe to former Balochistan Chief Minister Nawab Aslam Raisani in connection with the Reko Diq mines in 2009. The tribunal finds that the respondent [Pakistan] has not made all of its individual charges of wrongdoing attributable to the [TCC] complainant.’
“The tribunal has found no confirmed instance of the claimant (TCC) practising, or threatening to exert, undue power on government officials aimed at securing rights or benefits linked to the in-investment of the claimant in Pakistan,” said the 425-page judgement released by the ICSID in July 2019. In 2015, Pakistan appointed a new law company, Allen & Overy LLP, to plead its corruption charges against the ICSID.
The ICSID dismissed Pakistan’s more than a dozen charges in November 2017. The tribunal also noted that in its briefing note of June 4, 2015, the local advisory group recommended that the government of Balochistan should write to NAB in order to launch an investigation into graft and unethical practises with regard to Reko Diq. “It is important to put accountable government officials and TCC workers to justice,” it said.
In accordance with this suggestion, the government of Balochistan asked NAB to launch an inquiry by letter dated 22 June 2015, which NAB did two days later by authorization of its chairman. Taking into account that NAB began interviewing the seven individuals identified in July 2015 by the local group of experts as well as other individuals and acquired in the course of August.
It is also remarkable that NAB has not launched a case against any of these persons to date, as far as the tribunal has been told. In view of the timing and context in which the evidence was created, the tribunal also felt the need to document its concern, said the verdict.
It noticed that NAB did not authorise the review of the journal outside Pakistan and then declined to allow Pakistan’s own specialist, LaPorte, to carry out the very study for which it was retained, i.e. an ink-dating analysis, which could have shown unequivocally that two of the related journal entries were published in 2015 rather than in 2008 and therefore that the proof may have been fake.
On 5 November, however, NAB announced the filing of a reference against 26 persons in the Reko Diq project over misuse of authority. It claimed that the reference was the result of a detailed inquiry by the director general of NAB Operations and by the director general of NAB Balochistan into the 30-year past.
NAB also released the names of 26 defendants, nominated in the reference filed in Quetta’s accountability court. It included the names of a former governor, former chief minister, former senior mining and mineral department officers, the Balochistan Development Authority and Revenue Department and members of Australian mining firms.