ISLAMABAD: Frontier Holdings Ltd (FHL), a foreign oil and gas exploration company, has requested assistance from the Petroleum Division in enforcing an international court’s ruling against a local firm, the Petroleum Exploration (Pvt) Ltd (PEL).
The letter written to director general (PC) Petroleum Division stated that the FHL obtained a victory against PEL in jurisdiction-related proceedings before the Singapore International Commercial Court (SICC).
The SICC overturned an International Chamber of Commerce (ICC) arbitral tribunal’s ruling that it lacked jurisdiction over the disputes between FHL, a foreign working interest owner (FWIO) and PEL, a Pakistani working interest owner (PWIO) falling under the Petroleum Concession Agreements/Joint Operating Agreements of Badin IV South and Badin IV North Blocks (collectively Badin Concession Documents).
Two foreign oil, gas firms win arbitration against PEL
The dispute between FHL and PEL arose under the Badin Concession Documents executed by the parties for the exploration of oil and gas in Sindh province of Pakistan. The FHL initiated arbitration proceedings against PEL. The ICC arbitral tribunal ruled by a majority that it had no jurisdiction over Badin Concession Documents disputes between FWIOs and PWIOs, and that the dispute was to be resolved under the domestic arbitration in Pakistan, rather than international arbitration under the auspices of the ICC.
The FHL appealed the tribunal’s jurisdictional award before the SICC.
On December 30,2024, the SICC handed down its decision in which it determined that the ICC arbitral tribunal had erred in its interpretation of the Badin Concession Documents. The SICC found that on a proper construction of the Concession Documents a dispute between FWIO-PWIO shall be resolved by international arbitration outside of Pakistan. Consequently, the SICC set aside the ICC arbitral tribunal’s jurisdictional ruling and ordered the arbitral tribunal to continue with the arbitration.
Earlier, on December 10, 2024, the FHL had also won ICC arbitration against PEL against its attempt to forfeit FHL’s 27.5 percent working interests in both Badin IV South and Badin IV North Blocks (together the “Badin Blocks”).
The ICC Tribunal ruled that FHL is a legal holder of 27.5 percent working interests in both Badin IV South and Badin IV North Blocks.
Further, the ICC tribunal dismissed PEL’s counterclaims of approximately US$483 million and awarded FHL damages against PEL in the sum of approximately US$7 million, including US$2 million interest at a rate of two per cent per month on a compound basis. The estimated amount of damages and interest thereon awarded to FHL will continue to accumulate on the amounts awarded until the time of receipt of damages and interest by FHL.
When contacted with management of PEL, there was no reply till filing of this report.
Copyright Business Recorder, 2025
Comments
Comments are closed for this article.