Pakistan

Pakistan slapped with $5.97 billion penalty in Reko Diq case

KARACHI: The International Center for Settlement of Investment Disputes (ICSID) has announced a massive $5.976 billion (Rs944.21 billion) award against Pakistan in the Reko Diq case, which is one of biggest in ICSID history. The international tribunal on Friday issued a 700-page ruling against Pakistan in the Reko Diq case. ICSID awarded a $4.08 billion penalty and $1.87 billion in interest.

Tethyan Copper, a joint venture between Chile’s Antofagasta Plc (ANTO.L) and Canada’s Barrick Gold (ABX.TO), had discovered vast mineral wealth more than a decade ago in Reko Diq at the foot of an extinct volcano near Pakistan’s frontier with Iran and Afghanistan. The deposit was set to rank among the world’s biggest untapped copper and gold mines. Tethyan Copper Company’s (TCC) management had claimed $11.43 billion in damages.

The company said it had invested more than $220 million by the time Pakistan’s government, in 2011, unexpectedly refused to grant them the mining lease needed to keep operating.

The World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled against Pakistan in 2017, but until now had yet to determine the damages owed to Tethyan.

Tethyan board chair William Hayes 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.”

The lawsuit between the government of Pakistan and the international company lasted for as many as seven years. The Supreme Court of Pakistan under its chief justice of Pakistan Iftikhar Chaudhry terminated the deal in 2013.

The only remaining issue in the case was the final penalty on Pakistan, which has been now announced.

The detailed report said Dr Samar Mubarak Mand appeared before the tribunal to represent Pakistan. Dr Samar told tribunel that Reko Dic will give Pakistan $131 billion. The report said Dr had assured Pakistan will export gold worth $2.5 billion annually.

Sources said Pakistan has decided to challenge the decision before an international court by filing a revision application and a verdict on review petition can take 2 to 3 years.

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