Adverse decision in rental power case strong possibility

International Centre for Settlement of Investment Disputes (ICSID) is expected to award the case of 232 MW Karkey Rental Power Plant within weeks as Turkish firm M/s Karkey Karadeniz Elektrik Uretim A.S. has refused to settle the dispute out of court, well-informed sources told Business Recorder.
-- ICSID, an arm of the World Bank which offers arbitration and conciliation services for governments and private foreign investors' disputes, completed hearing last year. Pakistan and Turkish firm M/s Karkey Karadeniz Electric Uretim which established a 231MW rental power offshore plant at Karachi at an exorbitant tariff have been in litigation at the ICSID for the last two years.
-- "ICSID had promised to award the case in December 2016. GoP is waiting for the award anxiously," the sources added.
-- Minister for Water and Power, Khawaja Asif along with the officials of his Ministry and Attorney General for Pakistan visited London to represent the GoP in the court.
The Turkish Power ship, Kaya Bey, berthed at Ibrahim Hyderi, Korangi, as a barge-mounted rental power plant for the national grid. The case of M/s Karkey is still in the NAB Accountability Court against former Prime Minister Raja Pervez Ashraf. Former Interior Minister, Makhdoom Faisal Hayat who was also one of the political figures who raised this issue, has recently rejoined PPP.
-- Insiders claim that initially M/s Karkey Karadeniz Elektrik Uretim A.S. had offered to settle the case out of court but Pakistani authorities refused to accept the offer with the claim that Pakistan's case was very strong. However, at a later stage, Pakistan expressed its intention to opt for an out of court settlement, but this time the other side rejected the offer, saying that they would win the case.
-- M/s Karkey's issue was also discussed during the visits of Turkish President Recep Tayyip Erdogan to Pakistan at several meetings. .M/s Karkey had filed damage claim of $1.2 billion.
-- Though there was no official confirmation, insiders claim that British law firm M/s Allen & Overy which represented Pakistan at the ICSID viewed Pakistan's case as weak and proposed an out of court of settlement with M/s Karkey. The officials who accompanied Water and Power Minister denied receiving any such advice from the law firm.
The official further stated that out of court settlement with Karkey means weakening Pakistan's case, which is based on the rulings of Supreme Court of Pakistan.
--Pakistan has yet to pay Rs 400 million fee and other expenses of British law firm. Interestingly, the law firm has offered a discount of 30 per cent on payment of total bill. In August, 2015, Pakistan paid 2.38 million pounds (Rs 266 million) to M/s Allen & Overy after the law firm refused to appear in ICSID until payment was cleared.
The Turkish energy firm, Karkey Karadeniz Elektrik Uretim A.S. (Karkey), had registered a claim with the World Bank-affiliated ICSID against the Government of Pakistan early in 2013. The initial contract value of Karkey's power ship operations in Pakistan was $560 million for the duration of five years. The claims, as calculated by experts, sum up the damages as a result of the loss of earnings and costs associated with the detention of its vessels by Pakistan in April 2012.