New date for Reko Diq case at BVI court

The International News | 10 January 2021

New date for Reko Diq case at BVI court

by Murtaza Ali Shah

LONDON: The High Court of Justice in the British Virgin Islands (BVI) has postponed the hearing on the enforcement of the $6 billion award in the Reko Diq case until the 18th January and meanwhile Pakistan International Airlines (PIA) assets registered in the BVI jurisdiction remain frozen.

The News and Geo has learnt that the hearing on Thursday lasted only for about half an hour and Justice Gerhard Wallbank of the BVI High Court of Justice, after dealing with some procedural matters, fixed the new hearing date for 18th of January where for half a day Pakistani lawyers will present their case for the first time as the freezing order during the last hearing was issued ex parte. Injunction on the PIA assets including Roosevelt Hotel in Manhattan, Scribe Hotel in Paris and Minhal Incorporated remains in place till 19th of January 2021, shared a source from Pakistani legal side that attended the meeting. The receivership also stays in place till a decision is made at the next hearing. On Thursday, Pakistani legal team made a strong appearance at the online Zoom hearing with around eight lawyers and solicitors representing the PIA, the state of Pakistan and PIA’s offshore entities including PIA Investments and Minhal Incorporated. The Attorney General of Pakistan (AGP) also attended the online hearing. The Government of Pakistan engaged a team of lawyers for defence after the BVI High Court froze assets belonging to the PIA including interests in two hotels in New York and Paris at the request of Australian gold and copper exploration giant Tethyan Copper Company (TCC) to enforce a $6 billion award against Pakistan by World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

Justice Gerhard Wallbank had issued an ex parte order, in the middle of December last year, allowing Australia’s Tethyan Copper Company to enforce up to $3.1 billion of the award. The Attorney General’s office has said its confident Pakistan’s lawyers will be able to satisfy the court for an amicable resolution of the matter. The TCC on November 20, 2020, had filed a case in the BVI High Court for attachment of the assets belonging to the PIA but the Government of Pakistan has challenged the Order.

The BVI High Court of Justice ordered to freeze 100pc of the shares in two entities – PIA Investments and PIA Hotels. The court froze the PIA’s 40pc interest in a third entity called Minhal Incorporated.

In the Order, the BVI Court of Justice appointed a receiver (Paul Pretlove of Kalo Advisers) on an interim basis for the PIA Investments and PIA Hotels which indirectly own the Roosevelt Hotel in Manhattan and the Scribe Hotel, located in the heart of Paris. In 2019, an ICSID tribunal chaired by Germany’s Klaus Sachs, Bulgaria’s Stanimir Alexandrov and the UK’s Lord Hoffmann issued the award in favour of Tethyan Copper Company holding the Government of Pakistan liable for denying Tethyan a lease to mine Reko Diq.

Pakistan has applied against the award Order before an ICSID committee composed of South Korean chair Joongi Kim, Mexican former judge of the International Court of Justice Bernardo Sepúlveda Amor and Finland’s Carita WallgrenLindholm. In October, the committee ruled that Tethyan could collect up to half the amount of the award.

The case at the BVI High Court of Justice’s Commercial Division was registered as Tethyan Copper Company v the Islamic Republic of Pakistan, Pakistan International Airways Corporation, PIA Investments, Minhal Incorpor. The PIA is incorporated in the BVI. The TCC had approached the BVI High Court to enforce the award against Pakistan by the ICSID panel. The TCC is a 50/50 joint venture of Barrick Gold Corporation of Australia and Antofagasta PLC of Chile.

The long-running dispute related to the Province of Balochistan in 2011 having refused TCC a mining lease for the development of a $3.3 billion copper-gold mine at Reko Diq in Balochistan. After failing to find a resolution, the TCC filed a case against Pakistan with the ICSID in 2012. On 12th July 2019, the ICSID rendered an Award of $5.976 billion, which include $4.08 billion penalty and $1.87 billion in interest.

The AGP office said Pakistan would “vigorously” contest proceedings in any jurisdiction and protect national assets “wherever they may be located”. The AGP office also said the government aimed to settle the matter amicably.