A British Virgin Islands high court has saved Pakistan International Airlines from a $6 billion payout to Tethyan Copper Company by voiding the verdict in the Reko Diq case, wherein PIA hotels in Paris and Manhattan were frozen, it emerged on Tuesday.
BVI High Court Justice Gerhard Wallbank, while passing the order on December 10, 2020, had attached certain assets belonging to Pakistan International Airlines Investment Limited, including the company’s interests in two hotels — Roosevelt Hotel in Manhattan, New York, and Scribe Hotel in central Paris – as well as the erstwhile frozen 40 percent interest of PIA in a third entity, Minhal Incorporated.
Following the historic legal victory, Pakistan International Airlines has again received ownership of its hotels located in the US and France and other properties.
The court had issued the order after the TCC approached it for enforcement of the $5.97 billion award against Pakistan by the International Centre for Settlement of Investment Disputes in Reko Diq litigation on July 12, 2019.
The BVI High Court of Justice has ruled in favour of Pakistan after a review appeal the country submitted on the Nov 2020 verdict in which TCC had won an award of US$6 billion, about the size of IMF’s bailout package to Pakistan, to be paid by Pakistan and in turn asked the court to freeze its assets registered in BVS remits.
Moreover, the high court has further ruled the litigation expenses incurred by the country in the review appeal will also be recompensed by TCC.
Attorney General of Pakistan office said judgment is a “Great legal victory for PIA and Pakistan”.
“A short while ago judgment was announced by British Virgin Island High Court. Great legal victory for PIA and Pakistan. The order was passed earlier on the request of TCC which was seeking enforcement of the Reko Diq award. All orders passed against PIA earlier are now recalled by the Court. Receiver removed from Roosevelt hotel, NY and Scribe Hotel, Paris. Cost of litigation also awarded,” said a statement issued by the AGP office on Tuesday.
Additional Attorney General for Pakistan and International Disputes Unit head Ahmed Irfan represented Pakistan before the BVI court. The PIA engaged its own legal team in the case. Similarly, all offshore companies, two registered PIA hotels hired their separate counsels.
Prime Minister Imran Khan has appreciated the efforts of the international disputes unit and the office of the attorney general.
Earlier this year, the legal team of Tethyan Copper, a gold and copper exploration company involved in Balochistan to develop the Reko Diq mine, visited Islamabad to settle the billion-dollar dispute with the government.
According to Civil Aviation Authority, the office of the attorney general had requested a travel permit for the team from February 9 to 15. Following the AG office’s request, the team was allowed to visit the country.
In 2013, the Supreme Court, in a long-running dispute between the Balochistan government and TCC — a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold — over the right to develop a $3.3 billion copper-gold deposit, ruled against the latter, citing imbalanced stakes.
According to the original agreement signed in 1993, Balochistan holds a 25 percent stake in the project, with Tethyan holding the remaining 75 percent.
Subsequently, in July 2019, a World Bank arbitration court ordered the government to pay damages of $5.8 billion to Tethyan.
Since then, the government is in talks with Tethyan to settle the dispute. “We have been engaged in negotiations with parties involved in the Reko Diq dispute,” said an official who is part of the team handling negotiations, without providing further details.
The parties have been in talks for an extended period since Tethyan in 2018 expressed willingness to explore a negotiated settlement, Reuters quoted a second official as saying in 2019.
A spokesman of CCA said that Covid-19 protocols would be strictly followed keeping in view the health of the foreigners.
Reko Diq, located in Pakistan’s southwestern province of Balochistan, is one of the world’s biggest untapped copper and gold deposits. Development of the asset has been stalled for nearly a decade by the long-running dispute.
Following the World Bank’s International Centre for Settlement of Investment Disputes order, Tethyan board chair William Hayes had said in a statement the company was still “willing to strike a deal with Pakistan,” but “it would continue protecting its commercial and legal interests until the dispute was over.”