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Business & Finance

World Bank’s ICSID grants Pakistan stay on $6bn penalty in Reko Diq case

  • This is a success for Pakistan and its legal team said Attorney General for Pakistan’s office in a statement.
Updated 18 Sep 2020

In a major development for Pakistan, the World Bank’s International Center for Settlement of Investment Disputes (ICSID) has granted a stay on the enforcement of the $6 billion award issued against Pakistan in the Reko Diq dispute.

This is a success for Pakistan and its legal team said Attorney General for Pakistan’s office in a statement.

Pakistan is seeking the reversal of the $6 billion penalty imposed by an international tribunal for denying a mining lease to the Australian company, as Pakistan says that paying the fine will hinder its ability to mitigate the coronavirus pandemic.

The World Bank's ICSID on July 13, 2019, announced a 700-page judgment regarding a $5.976 billion (Rs 944.21 billion) award against Pakistan in the Reko Diq case.

The ICSID award includes a $4.08 billion penalties and $1.87 billion in interest to Tethyan Copper Company (TCC), a joint venture between Chile's Antofagasta Plc and Canada's Barrick Gold, the Chilean miner.

In 2012, TCC filed claims for international arbitration before the ICSID of the World Bank, after the Balochistan government turned down a leasing request from the company. The litigation has continued for seven years.

Former chief justice Iftikhar Muhammad Chaudhry in the Maulana Abdul Haque vs Government of Balochistan held that the "Chagai Hills Exploration Joint Venture Agreement" (CHEJVA) signed between the Balochistan Development Authority (BDA) and Broken Hill Properties Minerals Intermediate Exploration Inc. (BHP) in 1993 was void ab initio.