Friday , January 24 2020

Reko Diq case: Pakistan moves US court to stop over $6 billion fine

Reko Diq case

WASHINGTON: Pakistan moves to US federal court to withhold $ 6 billion fine in Reko Diq case.

According to a local media reports, New York-based Legal Publication, Law 360, reported that the Australian Copper Company, Tethyan Copper Co. Pty Ltd, won a case last year in connection with a dispute over a mining project in Balochistan Province.

Pakistan was asked to pay $ 6 billion to Tethyan Copper Company.

Reko Diq case

Now, Pakistan has approached the US Federal Court on the issue, where it was held that ‘the implementation of the decision will have disastrous consequences on their political and economic stability of Pakistan.

In a short statement submitted to the court on Friday, Pakistan objected that “Tethyan should not be allowed to proceed with the litigation while it looks to annul the award based on “numerous substantive and procedural errors”.

The report said that the award is the second-largest award ever issued by the International Center for Settlement of Investment Disputes (ICSID) and it is 2% of Pakistan’s annual gross domestic product and its 40% of the total liquid foreign reserves.

It should be noted that ICSID is an international arbitration agency established in 1966 to resolve and resolve legal disputes between international investors, which receive funding from the World Bank Group in Washington.

Related: IMF satisfied with economic performance of Pakistan

Pakistan said in its statement, “Our economy is already facing many challenges, and the implementation of this award will weaken the government and the economy.”

The brief statement stated that the tribunal ignored international law and did not seek permission or explanation for the wrong procedure relied on to estimate damages.

It may be recalled that the management of Tethyan Copper Company had claimed a loss of Rs 11 billion 43 crores in Reko Diq case.

The claim was filed in ICSID in 2012 after Pakistan rejected the leasing application of the company.

After that, the case between the Pakistani government and the international company continued for 7 years.

It should be noted that Reko Diq, which means ‘sand dune’ in Balochi, is a small village in Chaghi District, Balochistan, which is located near the Iran-Afghanistan border.

Reko Diq case

Reko Diq is known to be the fifth-largest gold and copper reserves in the world.

In July 1993, the then Balochistan Chief Minister Nawab Zulfiqar Ali Magsi awarded the contract for the Reko Diq project to the Australian company PHP.

The project on Balochistan’s 33 million 47 thousand acres was contracted for drilling only, but the Australian company had contracted with the Italian company Tethyan to do more without informing the government of Balochistan.

Reko Diq case

The Australian company had tried to sell Reko Diq’s gold and copper through Gwadar Port to Canada, Italy and Brazil, with Balochistan accounting for only 25% of total revenue.

However, the Balochistan government had cancelled the contract after the irregularities by the PHP, after which the provincial government had also decided in 2010 that the provincial government would work on the project itself.

In addition, in January 2013, the then Chief Justice of Pakistan Iftikhar Muhammad Chaudhry dismissed the Reko Diq Agreement between the Balochistan Government and the Australian Mining Company, calling it a violation of national laws.

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