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March 22, 2017

Reko Diq case: WB tribunal decides against Pakistan

Top Story

 
March 22, 2017

Top legal team to be hired in bid to escape major penalty

ISLAMABAD: Pakistan may lose billions of dollars as damages to Tethyan Copper Company (TCC) for scrapping its agreement at the Reko Diq project as the Arbitration Tribunal of the World Bank is all set to kick-start its proceedings from today (Wednesday) for determining the exact penalty amount against Islamabad.

The WB’s International Centre for Settlement of Investment Disputes or ICSID tribunal on Tuesday rejected Pakistan’s final defence against liability and confirmed that Pakistan had violated several provisions of its bilateral investment treaty with Australia, where TCC is incorporated.

Pakistan’s top managers are worried about this development but they are confident that chances still exist where Islamabad can avoid a major penalty at the final stage of the case. However, when contacted, they said that a top legal team would be hired to defend Pakistan’s case in arbitration forum of the WB. First, they said, the government would take up this issue at the highest level before finalising the future course of action. The country’s legal team in collaboration with international legal experts will devise the future strategy to avoid billions of dollars penalty against Pakistan, they added.

Barrick Gold Corp. (ABX, ABX.TO) said that an arbitration tribunal of the World Bank’s International Centre for Settlement of Investment Disputes or ICSID issued a decision on the arbitration claims that TCC, a joint venture between Antofagasta plc and Barrick, filed against the Islamic Republic of Pakistan, in relation to the ‘unlawful’ denial of a mining lease for the Reko Diq project in 2011.

The decision by the ICSID tribunal rejected Pakistan’s final defence against liability, and confirmed that Pakistan had violated several provisions of its bilateral investment treaty with Australia, where TCC is incorporated.

The damages phase of the proceedings will begin on March 22, during which the tribunal will consider submissions from the parties to determine the amount that Pakistan must pay to TCC. A ruling on the quantum of damages is expected in 2018.