US court junks Pakistan’s plea in Reko Diq case

The rejection of Pakistan's contention consequently impacted on the motion to dismiss the case and was swiftly rejected by the court

PGurus Newsdesk

March 17, 2022

The rejection of Pakistan's contention consequently impacted on the motion to dismiss the case and was swiftly rejected by the court

Pakistan can’t get $ 6 billion award suit dismissed

The District Court of Washington DC has dismissed Pakistan’s motion for stay enforcement of the $6 billion award against the country in the Reko Diq case by the International Centre for Settlement of Investment Disputes (ICSID).

The ICSID had imposed a billion-dollar fine on Pakistan on July 12, 2019, for revoking a mining contract at Reko Diq in the country’s Balochistan province. After the plea is dismissed by Washington Court, Pakistan will face a major challenge to counter a settlement dispute claim of $6 billion in the Reko Diq case.

The court closed its order with the ruling that the $6 billion award was final and that in the application of Articles 53(1) and 54(1) of the ICSID Convention, Pakistan is obliged to abide and comply with the award, followed by the steps required to enforce the obligation under the award.

The case was also reviewed by the British Virgin Island (BVI) court, which gave the ruling into the case and attached assets of Pakistan International Airline (PIA) in New York and Central Paris to enforce the award.

Pakistan had been granted a conditional stay of enforcement, but the stay was lifted in 2020 after Pakistan failed to meet conditions laid out by the court

Pakistan has maintained that it had not waived its sovereign immunity under the Foreign Sovereign Immunities Act (FSIA), highlighting that no valid arbitration agreement existed.

However, the Washington district court highlighted and emphasized that it is not entitled to review such an arbitrability agreement with reference to ICSID award under the FSIA.

The Washington DC district court said, “Even if we were allowed to do so, it would owe deference to the arbitration tribunal’s decision on this issue. The US statute implementing the ICSID Convention required courts to give awards the same full faith and credit as if the award were a final judgment of the state court.”

Pakistan’s contention that the arbitration tribunal lacked jurisdiction ratione materiae to grant full faith and credit, an argument disposed of by the court, insisting that longstanding precedent bars this attempt to recycle a losing jurisdiction argument.

The rejection of Pakistan’s contention consequently impacted the motion to dismiss the case and was swiftly rejected by the court.

The court directed both parties to agree on a joint proposed final judgment, consistent with its Memorandum Opinion, including the current amounts for pre and post-award interest.

[With Inputs from IANS]

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