Daily Times

The International Centre for Settlement of Disputes (ICSD) awarded a penalty of almost $ 6 billion against Pakistan in the RekoDiq dispute. The tale of this dispute goes back to 29 July 1993, when the government of Balochistan entered a Joint Venture Agreement called “the Chagai Hills Exploration Joint Venture Agreement” (CHEJVA) with an American based company namely the BHPM Minerals Intermediate Exploration Inc, for the exploration of copper, gold and other hidden minerals in the RekoDiq area (70km northwest of Naukundi close to Pakistan Iran border). The respective percentage of interest was 25% to the Balochistan government and 75% to the BHPM. After this, the BHPM found that a miner intends to create a specialized company to be known as the Tethyan Copper Company (TCC) to finance and operate the Alliance Agreement.

As a consequence of the joint venture agreement, the Balochistan Government had issued a mine exploring licence to the TCC for copper, gold and associated minerals in an area of 973.75 sq.km. After fulfilling statutory requirements in Pakistan, the TCC start working on this project.

In 2006, a local resident namely, Molana Abdul Haq along with others, filed a constitutional petition (no. 892/2006) at the Balochistan High Court, Quetta. They intended to declare the CHEJVA void and prayed to nullify the mine exploring licence issued to the TCC. However, after investigation, the Balochistan High Court found the CHEJVA to be legal, and dismissed the constitutional petition on 26 June, 2007. The aggrieved petitioner assailed this order to the Supreme Court and filed a leave to appeal (no. 796/2007). Meanwhile, other petitioners also joined directly at the apex courts, by way of invoking jurisdiction under article 184(3) of the constitution.

On 7 January 2013, the three-member bench of the Supreme Court headed by Iftikhar Mohammad Chaudhry, former Chief Justice of the Supreme Court, announced the 181-paged long judgment against the Joint Venture Agreement and also cancelled the TCC’s Licence of mine exploring. TCC assailed this order to the International Center for Sustainable Development (ICSD), who were given the power to adjudicate the matter as per legalities. Meanwhile, Pakistan also signed a bilateral investment treaty with Australia. Almost a year earlier, the ICSD reached to the conclusion that Pakistan had violated several clauses of the agreement and the treaty. As per the preliminary reports, one of the reasons for this fine was the testimony of Samar Mubarak Mand, which stated that Pakistan has mineral worth of $131 billion. It is much pertinent to mention here that whatever the causes or justifications of the case were, beyond doubt the amount of the penalty is too big to be paid by an economically struggling Pakistan. Unfortunately we do not have a good history with international judicial courts, thus, it will be interesting to see Pakistan’s moves towards resolving this issue.

The writer is a practicing lawyer.