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$11.5b damages claim in Reko Diq case rejected
By Tariq Butt July 15, 2017
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ISLAMABAD: Pakistan has rejected $11.5 billion claim made by the Tethyan Copper Company Pty Ltd (TCC), a joint venture between Antofagasta and Canada’s Barrick Gold Corporation, in the Reko Diq case.

The arbitration claim had been submitted in 2012 by the TCC. Five years later, in 2017, it filed for compensatory damages amounting to $9.1 billion based on a fair market value of its investments in the project till November 15, 2011. In addition, it also filed a claim of $2.3 billion as pre-award compound interest.

In a statement, Attorney General Ashtar Ausaf Ali said that the amount claimed in the international arbitration is being rejected by Pakistan as highly speculative and disproportionate, being hundreds of times larger than any amounts invested by the claimant.

He said that in any event, compensation will only likely be finally determined in some years. “An award has not been issued in the proceedings yet, and even when it does either party may yet invoke a number of remedies against the award, including annulment proceedings, which makes it impossible to forecast when a final decision will be reached. Pakistan is proactively pursuing its defence in this and every case under all applicable arbitration and other methods.”

The statement said that the quantum proceedings have been suspended as a result of Pakistan’s disqualification challenge in respect of one member of the tribunal, Dr Stanimir Alexandrov, which was based on the information acquired by Pakistan during the quantum phase of the arbitration.

Before reaching the quantum phase, the International Centre for Settlement of Investment Disputes (ICSID) heard the parties‘ arguments on the arbitration of the issues of corruption related to the TCC’s investment unveiled during the local proceedings in Pakistan which in the end resulted in the Supreme Court’s finding in 2013 that the underlying joint venture agreement was null and void ab initio, and in an ongoing inquiry into corrupt practices by foreign companies associated with the project, which is separate from the arbitration proceedings.

“The quantum phase of the arbitration is a prolonged, self-contained phase in itself, in which the office of the Attorney General is participating actively in the defence of the interests of Pakistan,” the statement said.

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