Pakistan suffered another humiliation when the International Center for Settlement of Investment Disputes (ICSID) granted a massive $5.976 billion (Rs 944.21 billion) compensation to Tethyan Copper, a joint venture between Chile’s Antofagasta Plc (ANTO.L) and Canada’s Barrick Gold (ABX.TO) for the unilateral termination of its Reko Diq, Balochistan, mineral exploration contract. This includes a $4.08 billion penalty and $1.87 billion in interest.
TTC had challenged the Pakistani decision of unilaterally revoking its exploration license in the hills of mineral-rich Balochistan province. Vested civil-military interest, it seems, might have ‘influenced’ the senior judiciary to get TTC out of business. To date, the hills under the question remain mountains of dirt and rock. This deprived the Baloch economy of thousands of jobs and immense sources of revenue.
Only a day earlier on July 12, the London Court of International Arbitration (LCIA) had awarded a penalty of some 33 million dollars (Rs5.21 billion) against Pakistan for abrupt termination of a National Accountability Court contract with Broadsheet LLC in 2003.
On December 26, 2018, the Court had announced a compensation of $21 million (Rs2.92 billion) to the country in the infamous Broadsheet LLC case. Shortsighted Pakistani officials with misplaced optimism challenged it, and the ruling on review last week raised the cumulative penalty to 33 million dollars (Rs. 5.21 billion).
Services of the Essex Court Chambers to defend NAB have reportedly cost another half a million British pounds.
Earlier, on August 22, 2017, the International Centre for Settlement of Investment Disputes (ICSID) awarded $846 million in damages to Karkey Karadeniz Elektrik Uretim AS, a Turkish power company. The controversial deal for producing electricity on board barges parked off the Karachi shore was struck by PPP government in 2009 and was eventually struck down by the Supreme Court.
This amount included both damages as well as $5.6 million (Rs. 590 million) per month as interest to Karkey.
A recent study by the Center for Research and Security Studies (CRSS) has concluded that.
The cumulative losses resulting from Supreme Court’s intervention in four cases alone i.e. Reko Diq, Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM), and Karkey Eletrik (Turkey) may have cost Pakistan potentially more than Rs. 12 trillion (including the latest penalties in Reqo Diq and Broadsheet cases).
This is an exorbitant cost of judicial hyper-activism that began with Iftikhar Chaudhry – if one were to calculate the debt liabilities and operational losses of PIA, Pakistan Steel Mills, and the power utilities.
By the way, the tardy criminal justice system – thoroughly exploited by the rich and the mighty ones – that causes inordinate delays , has cumulatively cost the country at least $ 13 billion. The tax cases pending before the Sindh High Court and the Supreme Court, for example, are worth over 1200 billion rupees. Cases pending with the commissioners of Inland Revenue involve at least 250 billion rupees. This is the potential state revenue that is stuck in the system , largely because of the collusion of the bar and the bench.
Instead of attending to these cases by fixing the justice system, all previous Supreme Court justices took to populist public litigation. It won them praise but bled the country and deprived it of massive sources of revenue.
It is, nevertheless, not judicial activism alone; because of arbitrary, whimsical personal decisions by people in power – PM, President, heads of entities such as National Accountability Bureau (NAB), over the years, shortsighted rulings by the higher judiciary and poor bureaucratic as well as legal understanding of possible implications for the country, Pakistan, as of December 2018, was entangled in about three dozen litigations at international courts. They also included independent power producers (IPPs), who have been seeking clearance of their pending dues, which amount to more than a trillion rupees.
A sad comment indeed on the brains that occupy high places in governance, judiciary, legal fraternity and the security establishment, who forget that foreign investment is directly linked to the trust in the country’s systems and in those who govern it!
Many of the key decision-makers may themselves get away with their arbitrary decisions and sitting cozy in London, New York, at ranches in Australia or elsewhere, but it is the country’s image and the peoples’ interest that take the ultimate battering.