Supreme Court dismisses Petrosin''s review petition with costs

The Sup-reme Court on Friday dismissed Petrosin''s review petition with costs, enabling the Oil and Gas Development Company Limited (OGDCL) to develop the fields under litigation. Petrosin was issued a Letter of Interest (LoI) by OGDCL to develop Kunnar Pesakhi Deep, Tando Allah Yar and Sinjhoro fields in 2006 by a Managing Director on the last date of his service in ODGCL and without lawful authority.
However, LoI was terminated by BoD of OGDCL. Oil and Gas Development Company Limited has already invited bids for engineering, procurement, construction and commissioning of these projects and has already received bids from three companies, inclusive of Petrosin, which are under evaluation.
Mian Gul Hasan, Counsel for Petrosin, told Business Recorder that the review petition had to be filed within 30 days after the short order of the apex court instead of detailed judgement. According to him, in September 2008, the Supreme Court had given a verdict in favour of OGDCL and Petrosin had filed the review petition against the judgement.
He further stated that the apex court, in its judgement of September 2008, had allowed the OGDCL to start working on the project under litigation. Official document available with Business Recorder reveal that OGDCL was facing over $800 million, $1.5 million per day, due to litigation with Petrosin and was considering an out-of-court settlements.
As many as 16 cases were filed by Petrosin, a Singapore-based company co-owned by Pakistani national Sohail Latif against the OGDCL in various courts including Supreme Court. According to the draft minutes of the 111th special meeting of the OGDCL Board of Directors held on November 19, 2009 in Islamabad, available with Business Recorder, Managing Director of the company had stated that the losses were on account of delays in the Kunnar Pesakhi Deep, Tando Allah Yar, Sinjhoro and Qadirpur projects, which were expected to produce 7,000 barrels of oil per day and 300 mmcfd of natural gas.
"As many as 16 cases filed by Petrosin and Zafar Mehmood Malik, who claimed to be a shareholder, against OGDCL were pending in different courts including the Supreme Court, Sindh High Court, Lahore High Court, Peshawar High Court and District Court, Islamabad," he further stated.
Both petitioners were represented by Abdul Hafeez Pirzada, while OGDCL is being represented by Shahid Hamid, Khaliq-uz-Zaman and Sardar Qasim Farooq. In the meeting, one of the OGDCL lawyers, Shahid Hamid, stated that both the "co-petitioners" were "acting in unison with each other" and had filed the cases in different courts "with the evident purpose that if they could not obtain relief from one court then they had the chance of getting relief from another.
"The idea/intent is to engage (OGDCL) on various fronts and try to paralyse its operations," the minutes quoted Hamid as having said during the meeting. The meeting was called to discuss the offer of the petitioners to withdraw all the cases against OGDCL provided the OGDCL not treat Petrosin as a chronic litigant and allow it to participate in OGDCL''s pending and future tenders, and it (Petrosin) be treated as a "technically pre-qualified" party in the previous tenders that have already been re-tendered.
The OGDCL MD had informed the Board members that the Federal Minister for Petroleum and Natural Resources maintained that "settlement would be in the interest of OGDCL and the MPNR provided all the cases against the Ministry and the Federation of Pakistan were also withdrawn."
A participant of the board meeting told Business Recorder on condition of anonymity that the losses to the exchequer on account of higher fuel import bill as well as losses due to closure of the industries because of supply interruptions, took the real cost of such litigation against OGDCL into "billions of dollars." The Board had unanimously rejected the proposal to accept Petrosin as a technically pre-qualified party, as this "could cause problems/litigations with other bidders" and decided that Petrosin would have to "go through the process of pre-qualification on a case-to-case basis," the minutes revealed.