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September 30, 2017

Ruling against Pakistan in RPPs’ case: Govt may file revision with world forum

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September 30, 2017

ISLAMABAD: The government is considering options for filing a revision with the International Center for Settlement of Investment Disputes (ICSID) against its verdict in a dispute over rental power in which around $800 million penalty was slapped on Islamabad for failing to fulfill international obligations in RPPs agreement.

“The ICSID didn’t allow Pakistan to present its case while producing key expert witnesses for examination and    recording evidences related to corruption scandals that forced the country to terminate agreement,” revealed  Ahmad Irfan Aslam, Head International Dispute Unit.

On August 22, the ICSID awarded around $800 million to the Turkish company Karkey Karadeniz Elektrik Uretim AS in a damages suit it brought out against Pakistan.

Talking to The News, Pakistan’s chief defense said, “Our major grievance against the award is that as per domestic laws, Pakistan’s judiciary is independent and competent to decide the cases, so this can’t be termed a failure of judiciary.”

"The tribunal didn’t allow us to present our key witnesses; therefore, we are very disappointed. This award is deficient," the counsel said. 

“During the hearing of ICSID, we asked the tribunal that we want to produce documentary evidences of Karkay corruption but they didn’t pay any heed to our request,” he said, adding that the Pakistani experts on this case had travelled to the place of hearing but they were informed at the eleventh hour that there was no need to testify them before deciding this dispute.

The ICSID held that we are not concerned about the act of any subsidiary of a state. The tribunal penned down in its judgment that the judiciary is very much part of the state and its act is attributable to as an act of state. The findings held that the judiciary didn’t honor the international obligations of the state,” said the counsel while referring to the tribunal’s findings.

As per the tribunal’s verdict, the court should have understood what the state’s obligations were under the international law before scrapping the rental power projects (RPPs) agreements.

The tribunal in its judgment held that there were multi rental power projects and if one rental power project was found involved in corruption then other could not be penalised.

The tribunal held the standard must have been uniform for each separate case thus the standards of evidence were not met. There must have been a uniform principal — to hold an independent inquiry and investigation of each project – for the failure of one specific project, the court cannot scrape the entire agreement with a broad brush.

The key witnesses in the Karkay deals are the incumbent Foreign Minister of Pakistan Khawaja Muhammad Asif, the petitioner in this case before Supreme Court of Pakistan. Former Attorney General of Pakistan Salman Butt was not allowed to testify.       

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