- Those responsible must be identified
The World Bank’s International Centre for the Settlement of Investment Disputes has ruled in a 700-page judgement that Pakistan must pay the Tethyan Copper Company $5.8 billion for cancelling the Reko Diq lease agreement with it. The Company had its lease application rejected in 2011, and had filed a case against this. The Supreme Court had declared the agreement void in 2013. However, Tethyan went abroad with its case claiming damages of $11.43 billion. The government says it will go into review, but recent experience makes success doubtful. It just lost an appeal in the London High Court against an arbitration award of $33 million to Broadsheet LLC, which had been contracted by NAB, during the Musharraf regime, to probe the assets abroad of over 150 Pakistanis, including the Sharif family. The contract was terminated by NAB in 2003, but Broadsheet went into litigation.
The government must exhaust all legal remedies, but should not merely assume that it can put off forever the payment of huge sums, and that too in foreign exchange, when agreements are not fulfilled. Foreign companies are not bound to keep quiet, and officials used to riding roughshod over local businessmen should not assume that they can do the same with foreign companies. To put things in perspective, the damages awarded to Tethyan are more or less the same as the recent IMF package. The company still wants to do business, and may well use the award as a means of getting the deal.
However, Pakistan should not just be looking at how it is to pay this money, but at why it finds itself forced into this position. It should not be finding itself in such a position that it has to cancel a deal. While NAB’s agreement with Broadsheet seems partisan, Reko Diq was a strictly commercial deal. It seems to have gone terribly wrong, and it is not enough to plead that foreign courts are prejudiced. In fact, this is all the more reason to make sure that officials conduct due diligence. Why are our dispute resolution mechanisms not trusted? There should be a proper investigation into both deals, with the emphasis being fixing responsibility on the officials concerned. After all, vast sums are involved in both cases. While those responsible may be unable to pay, at least an example can be set.
