$26m Pakistan state funds abroad held

WASHINGTON: In an attempt to recover the arbitration award handed down against the state of Pakistan and its National Accountability Bureau (NAB), Broadsheet LLC has secured over $26 million in Pakistani state funds reserved in various UK commercial bank accounts.

Through a London based High Court of Justice, the company obtained a Third Party Debt Order which directs the United National Bank to freeze financial assets in its accounts that belong to the Pakistani state.

The freeze will remain in effect until the final hearing which is due in November. At that time the funds will be turned over to Broadsheet to satisfy the Pakistani state's debt, without any recourse or appeals left to the country.

The order also directs that "until that hearing the third party must not, unless the court orders otherwise, pay to the judgment debtor, or to any person, any sum of money due or accruing due by the third party to the judgment debtor, except for any part of that sum which exceeds the total shown." The order then shows the amount that reaches almost 22 million dollars. However, Pakistan now owes at least $30 million to Broadsheet because of court-imposed interest penalties as well as substantial legal costs.

Broadsheet has also informed Pakistan and the NAB's counsel that the company has been advised by the United National Bank that it has taken the necessary steps against a number of additional accounts held with it to enforce the interim order and that the $26,000,000 already secured is not the only funds that will be seized to pay Pakistan's outstanding debts.

In addition, Broadsheet has taken the interim order to other London-based banks that manage Pakistan's commercial accounts. In the letter from its lawyers at Crowell & Moring LLP which was sent to the NAB and Pakistan's counsel; the company maintained that the seizure of the $26 million "is clearly insufficient to satisfy the full sum due to our client, which now includes substantial sums of court awarded interest and further costs caused by your client's failure to honour the High Court judgments."

It further mentions that "by the time November hearing arrives additional interest of circa $2.21 million will have accrued on the outstanding judgments." The Broadsheet letter requests that Pakistan resolves the debt by agreeing to "the sums held by United National Bank be paid out to us forthwith to save the Pakistani people the burden of at least some of the interest charges that are accruing. Costs, of course, continue to escalate and will be very significant by the time that your client pays its debt."