SSGCL restrained from terminating agreement with JJVL

Sindh High Court restrained the Sui Southern Gas Company Limited (SSGCL) from terminating its implementation agreement with Jamshoro Joint Venture Limited (JJVL) on Tuesday. Justice Amir Hani Muslim of Sindh High Court while issuing notices to SSGCL and the federation of Pakistan as an ad-interim measure restrained the defendant from terminating its implementation agreement dated August 12, 2003 until the next hearing on February 16, 2011.
The Court observed that the supplies to JJVL were linked to supplies made by British Petroleum (BP) to SSGC and, therefore, the Implementation Agreement between JJVL and SSGC could not be deemed to have been terminated on February 3, 2011. The Court took note of the fact that supplies by BP to SSGC were under a Gas Sales Agreement (GSA) which was specifically referred to and made the basis of the Agreement between JJVL and SSGC.
The Court noted the submissions of JJVL counsel, senior advocate Aitzaz Ahsan, that gas from BP's Badin field could not be used for domestic or industrial purposes without the extraction of LPG from it. If such LPG was not extracted by the JJVL Plant, it would have to be flared or burned causing a loss of at least 200 tons of LPG per day.
It was also contended that the extension clause in the JJVL-SSGC Agreement, in fact, favoured SSGC because it meant that although gas would continue to be supplied by BP to SSGC under the GSA between the two parties, JJVL would not be in a position to refuse extraction of LPG to enable the product to be supplied to domestic and industrial consumers even after the expiry of the initial Agreement on February 3.
JJVL was thus bound to continue to serve SSGC and the consumer on the same terms negotiated several years ago for a further indefinite period. The court noted the submissions of JJVL counsel that the extension clause heavily favoured SSGC because the termination of the Agreement on February 3 would lead to colossal national losses. The counsel further pointed out that the plaintiff, JJVL, apprehended that SSGC was under intense pressure to cancel their agreement on account of a decision widely reported in the press taken by a Standing Committee of the National Assembly.
It was submitted that the Committee was not a judicial forum and could not determine the rights of any citizen or person in the land. It was submitted that the Committee could only make recommendations which cannot bind any authority or decision maker. However, SSGC management appeared to be under a genuine misapprehension that it would be found to carry out the decision of the Standing Committee without any other judicial forum having considered the issue.
Having heard the submissions of the counsels for the plaintiff, the learned judge directed that notices be issued to the defendants (SSGC and the federal government), and that in the meantime, SSGC shall continue to supply gas to JJVL in accordance with Article 2 of their agreement for the period that SSGC continues to receive supplies from BP. Senior advocate Aitzaz Ahsan and Uzair Karamat Bhandari represented the plaintiff.