The International Centre for Settlement of Investment Disputes (ICSID) has ordered Pakistan to pay damages of $5.976 billion to the Tethyan Copper Company in the Reko Diq case.
A World Bank arbitration court, the ICSID facilitates conciliation and arbitration of international investment disputes. In a 700-page ruling delivered on Friday, it awarded Tethyan a $4.08 billion penalty and $1.87 billion interest.
Local media has reported that Pakistan would likely challenge the award shortly and file a revision application in a bid to get a lower penalty. This process can take anywhere from two to three years.
In a statement issued by Tethyan board chair William Hayes, he said the company was still “willing to strike a deal with Pakistan.” However, he added, “it [Tethyan] would continue protecting its commercial and legal interests until the dispute was over.”
Tethyan discovered large quantities of mineral wealth in Reko Diq over a decade ago. It said it had invested more than $220 million in the project by the time the provincial government of Balochistan decided against granting a mining lease needed to continue operations. The case reached Pakistan’s Supreme Court where then-chief justice of Pakistan Iftikhar Chaudhry declared void a 1993 agreement between Tethyan and the federal government and said the mining company had no rights with respect to the Reko Diq agreement.
After the judgment against it in Pakistan, Tethyan continued its case before the ICSID, which ruled against Islamabad in 2017. The damages owed to Tethyan, however, have only just been revealed.
This isn’t the first time one of Chaudhry’s judgments has resulted in a heavy cost for Pakistan. The country is also set to pay a $900 million penalty to Turkish energy company Karkey, whose rental power project was terminated on the orders of a Chaudhry-led Supreme Court bench. Attempts to settle with Karkey were also scuttled by Chaudhry.