ISLAMABAD: The caretaker government’s failure to deposit Rs15 billion in security guarantees has resulted in the vacation of a stay order awarded to Pakistan in the Rental Power Projects (RPP) case, a local media outlet reported on Saturday.
The stay order was awarded on the execution of $846 million to Karkey Karadeniz Elektrik Uretim, a Turkish firm. The International Centre for Settlement of Investment Disputes (ICSID) had awarded the sum to the company.
The company approached a US court to enforce the award against Pakistan when it failed to deposit the security guarantees. The caretaker government had earlier refused to deposit the sum.
A high level meeting was conducted on Thursday where caretaker Minister Law and Power Ali Zafar and Finance Minister Shamshad Akhtar discussed the issue with members of the meeting. It was informed that former prime minister Shahid Khaqan Abbasi had approved the deposition of security guarantees to continue the stay order.
The $846 was awarded to the Turkish company in August, 2017 but Pakistan approached the ICSID and was granted a stay order in November. $150 million was the sum the ICSID said in May this year Pakistan had to pay to the company in order to continue the stay order. The 15 June deadline for the payment was extended by a week due to Eid holidays but the caretaker government refused to may the payment.
Pakistan may have to bear high litigation costs if the company moves to courts in different countries, explained a senior lawyer.
Pakistan had expressed its reservations regarding the award previously but was not allowed to present evidence. International arbitrators said that the Pakistan Supreme Court’s decision to declare all RPP contracts void was faulty.
The next government would have to make the payments to the company, lawyers said and Pakistan is currently facing 36 cases launched by various companies in international courts.
The Supreme Court is set to resume hearing for the RPP case on Monday and many lawyers have requested the Chief Justice of Pakistan Mian Saqib Nisar to take this issue into account.