Saturday July 13, 2024

International court reverses judgement to freeze PIA assets in Reko Diq case

PIA CEO Air Marshal Arshad Malik terms the development a "great victory for Pakistanis"

By Ayaz Akbar Yousufzai & Tariq Abul Hassan & Web Desk
May 25, 2021
PIA's Roosevelt Hotel in New York. — Twitter/PIA

The foreign assets of Pakistan International Airlines that were ordered frozen as settlement in the Reko Diq case have been given back to the carrier after the British Virgin Island High Court reversed its decision in this regard.

Attorney General for Pakistan Khalid Jawed Khan shared a statement, calling it a "great level victory for Pakistan".

"Receiver removed from Roosevelt hotel, NY and Scribe hotel, Paris," read the statement, referring to the hotels that PIA owns abroad and the control of which was sought as compensation against the cancellation of a copper and gold mining license.

In November 2020, the TCC approached the BVI High Court of Justice for enforcement of the $6 billion award in the Reko Diq case and on December 16, the court, through an ex parte order, hadattached assets belonging to the Pakistan International Airlines Investment Limited (PIAIL) including Roosevelt Hotel in New York, Scribe Hotel in Paris, and froze 40% of PIA's interest in Minhal Incorporated.

In July 2019, the International Center for Settlement of Investment Disputes (ICSID) slapped a massive $5.976 billion award against Pakistan for revoking TCC's mining contract at Reko Diq in Balochistan.

Former chief justice of Pakistan Iftikhar Muhammad Chaudhry's verdict in the Reko Diq case had set off the series of events that led to the ICSID decision after nearly seven years of litigation.

In September 2020, Pakistan won a stay on the enforcement of the award and ICSID said the stay shall continue on a conditional basis. The arbitrator directed Pakistan to provide an “unconditional and irrevocable” bank guarantee or the letter of credit (LC) for 25% of the award, plus accrued interest as of the date of the decision.

Pakistan, however, missed the deadline and did not deposit a 25% bank guarantee.

"Pakistan was dragged into the arbitration case on the basis of a bilateral investment treaty (BIT) that it had signed with Australia in 1998," TRT World had reported.

Meanwhile, responding to the development, PIA said that justice had prevailed and thanked the people of the country for their prayers.

"BVI decide[d]in favour of PIA, releasing all hard earned assets i.e., Roosevelt NYC & Scribe Paris. Great victory for PIA and Pakistan. We won this together," the airline said.

PIA CEO Air Marshal Arshad Malik saying the airline's valuable assets had been secured, termed the development a "great victory for Pakistanis".