ISLAMABAD - In a major success, the World Bank’s International Center for Settlement of Investment Disputes has granted a stay on enforcement of the Award issued against Pakistan in the Reko Diq dispute.

This was announced by the office of the Attorney General (AG) for Pakistan here on Thursday. The quantum of the Award is the same as the bailout package granted to Pakistan by the IMF. If enforced, the Award shall cause serious economic hardship and retard economic growth. Seen in this context the decision on stay is a success and major relief for Pakistan.

In July 2019, an ICSID Tribunal had granted an Award of nearly USD6 billion against Pakistan for denying a mining lease to an Australian Company, Tethyan Copper Company (TCC). Immediately, thereafter TCC commenced proceedings for enforcement of the Award. In November 2019, Pakistan challenged the Award and initiated proceedings seeking its annulment. 

Pakistan was granted provisional stay upon initiating annulment proceedings. A hearing to confirm the stay order took place over video link in April 2020. On 16 September 2020, the Tribunal finally ruled in favour of Pakistan, confirming the stay on enforcement of the Award.

The ICSID is still considering Pakistan’s appeal against enforcing the penalty over its cancellation of the Reko Diq mining lease for TCC, a 50-50 joint venture of Barrick Gold Corporation of Australia and Antofagasta PLC of Chile and a final hearing will take place in May 2021. 5.

The Reko Diq district in southwestern Pakistan’s Baluchistan province is famed for its mineral wealth, including gold and copper. Prime Minister Imran Khan’s government considers it a strategic national asset, though instead of yielding a bonanza the Reko Diq mines have cost the country dearly owing to ongoing international litigation between TCC and Pakistan.

The government was seeking avenues to ensure that it is granted a stay on the enforcement of $5.9 billion penalty during pendency of proceedings of annulment of the award imposed against Pakistan by the International Centre for Settlement of Investment Disputes (ICSID) for terminating Reko Diq mining contract in Balochistan.

The AG office said that it had filed a request on Nov 8, 2019 for the annulment of the award rendered by the ICSID on July 12, 2019, in the matter of the Tethyan Copper Company (TCC) versus Pakistan.

Alongside the request for annulment, Pakistan had also requested a provisional stay on enforcement of the award, which was granted on Nov 18, 2019, it said. Presently, the ICSID award has been stayed which means that the TCC is not allowed to pursue any ongoing enforcement proceedings or initiate new ones.