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ISLAMABAD: The Government of Pakistan’s foreign counsel for arbitration at London Court of International Arbitration (LCIA) for Star Hydro Power Limited (SHPL) versus NTDC, M/s Mayer Brown International, LL. P (MB) has sought increase in fee of £350,000 in the budget to adequately cover the costs, sources close to CEO CPPA-G told Business Recorder.

The ongoing subject arbitration was processed in accordance with the Standard Operating Procedures (SOPs) issued by the Office of the Prime Minister and the ensuing meetings with the International Disputes Unit at the Office of the Attorney General for Pakistan, whereby the appointment of foreign counsel - M/s Mayer Brown International, LL.P (MB) - was finalised and subsequently executed wherein the total legal fees for the entire conduct of the instant arbitral case was agreed at GBP 920,000.

MB’s fees, as negotiated and agreed vide the SOPs and reflected in the letter of engagement executed therewith were, however, predicated upon certain shared assumptions at the time of its execution. Over the course of the arbitral proceedings, however, additional tasks were necessitated by the proceedings - including explicit directions issued by the sole arbitrator - and were ably performed by MB at the behest of CPPA (G) and added tangible value to CPPA (G)’s representation before the tribunal. In this regard, a “Memorandum on Budget Increase” was issued by MB of August 22, 2023 (Memorandum on Budget Increase“. By way of Memorandum on budget increase, a request of an additional £575,000 in the budget for the LCIA Arbitration was made by MB which was subsequently, reduced to £550,000.

However, since the submission of Memorandum on Budget Increase, new events have taken place which required further additional work outside the original scope of Letter of Engagement by MB. These new events were not reasonably envisaged at the time the Memorandum on Budget Increase was issued. Therefore, a “Supplemental Memorandum” for a further increase in the budget for LCIA Arbitration has been requested for the following works undertaken in excess of the scope of work enumerated under its letter of engagement; (i) increase in the number of hearing days, as directed by the arbitrator in light of the complexity of the case; (ii) additional witness statements, required to further substantiate NTDCL / CPPA(G)’s case before the tribunal; (iii) increase in number of documents that government was required to review in order to prepare its statement of defence resulting in significant increase in overall dimension of the case ;(iv) preparation of transcript by translation company and review of the hearing before NEPRA held on September 26, 2023; (v) investment of considerable additional effort and time to review Dr Birds Comparison Model included during the proceedings; (vi) time invested to comply with the additional procedural steps determined by Sole Arbitrator; and (vii) adapting the overall litigation strategy, including responding to new claims raised by SHPL even after the filing of the request for arbitration.

CEO CPPA-G, Rihan Akhtar is of the view that considering the work done on the case including these developments over the course of the proceedings and the additional work performed by MB in excess of that delineated by the letter of engagement - MB has requested a further increase of £350,000 in the budget to adequately cover the costs associated with the out-of-scope work executed during the LCIA Arbitration. CPPA-G has maintained that in view of the foregoing, the request for further increase in budget of LCIA Arbitration be formally forwarded to the Head of the International Disputes Unit, Office of the Attorney General for Pakistan, to be considered by the Committee in accordance with the SOPs of the PM.

Copyright Business Recorder, 2024

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