Friday, March 29, 2024

Pakistan wins stay over $6b penalty in Reko Diq case

Pakistan wins stay over $6b penalty in Reko Diq case
September 18, 2020
ISLAMABAD (92 News) - The World Bank's International Centre for Settlement of Investment Disputes has granted stay on the enforcement of penalty imposed on Pakistan in the Reko Diq mining lease dispute. In a statement in Islamabad, the office of Attorney General for Pakistan described the development as a success for the country and its legal team. In July last year, an international arbitration tribunal of the ICSID had slapped nearly six billion dollars penalty on Pakistan for denying a mining lease to an Australian company. Earlier, a World Bank arbitration court has ordered the Pakistani government pay damages of $5.8 billion to Tethyan Copper, a joint venture between Chile’s Antofagasta Plc (ANTO.L) and Canada’s Barrick Gold (ABX.TO), the Chilean miner said late on Friday. Tethyan Copper discovered vast mineral wealth more than a decade ago in Reko Diq, at the foot of an extinct volcano near Pakistan’s frontier with Iran and Afghanistan. The deposit was set to rank among the world’s biggest untapped copper and gold mines. The company said it had invested more than $220 million by the time Pakistan’s government, in 2011, unexpectedly refused to grant them the mining lease needed to keep operating. The World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled against Pakistan in 2017, but until now had yet to determine the damages owed to Tethyan. Tethyan board chair William Hayes said in a statement the company was still “willing to strike a deal with Pakistan,” but added that “it would continue protecting its commercial and legal interests until the dispute was over.” The Reko Diq mine has become a test case for Prime Minister Imran Khan’s ability to attract serious foreign investment to Pakistan as it struggles to stave off an economic crisis that has forced it to seek an International Monetary Fund bailout.