Pakistan restrained from local challenges to foreign rulings

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SOURCEThe Express Tribune
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ISLAMABAD: The London Court of International Arbitration (LCIA) has permanently restrained Pakistan from challenging its rulings regarding payments to nine independent power producers (IPPs) in local courts of Pakistan.

 

“The IPPs are entitled to a final anti-suit injunction, continuing the interim injunction granted by Males J, on the entirely straightforward basis that the seat of the Arbitration is London. NTDC is to be restrained on a permanent basis from challenging the Partial Final Award in proceedings in Lahore, Pakistan, or anywhere other than England and Wales”, says the judgment, authored by LCIA judge Justice Phillips over the dispute between nine IPPs and National Transmission and Dispatch Company (NTDC). A copy of the judgment is available with The Express Tribune.

The IPPs have been generating and supplying electricity to the National Transmission and Dispatch Company (NTDC) –the exclusive purchaser of electricity from the IPPs. It is owned and controlled by the Government of Pakistan.

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The nine companies in the present case are Atlas Power, Liberty Power Tech, Nishat Chunian Power, Nishat Power, Hub Power Company, Saif Power, Orient Power Company, Sapphire Electric Company, and Halmore Power Generation Company.

Last year, a partial final award was issued in favour of the IPPs by holding that NTDC should provide interim security for the IPPs’ claims. Later, the LCIA had also directed the NTDC to pay more than Rs14 billion to the private power producers.

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In the arbitration claim issued on August 15, 2017, the IPPs sought a final anti-suit injunction to restrain NTDC from challenging the partial final award in LCIA arbitration between the IPPs and NTDC by way of proceedings in Pakistan, or any jurisdiction other than England and Wales.

The central issue between the parties is whether the courts of Pakistan have supervisory jurisdiction over the arbitration.

The IPPs contend that the seat of the arbitration is London and therefore the courts of England and Wales have exclusive supervisory jurisdiction. On the other hand, NTDC’s contention was that the courts of Pakistan should have concurrent jurisdiction, even if the seat is London. Alternatively, NTDC contended that if there can be only one supervisory jurisdiction, being exclusively that of the courts of the jurisdiction where the seat of the arbitration is located, the seat must therefore be Lahore, Pakistan.

The LCIA in its recent verdict says that NTDC cannot resist the present claim on the grounds that the seat of the arbitration was not London.

The ruling says that NTDC must be treated as bound by the decision of the LCIA as to the seat of the arbitration, adding that there is no suggestion that such determinations are illegal or contrary to public policy as a matter of English law, nor that there is any other legitimate basis on which they should be disregarded by this court.

“I therefore reject NTDC’s contention that, even if the seat of the arbitration is England, the courts of Pakistan have concurrent supervisory jurisdiction,” says the ruling.

Next guy’s problem

The next government will have to deal with the fallout of major legal battles in world legal forums, paying billions of dollars in damages in several controversial matters, especially in the Karkey rental power plant and Reko Diq mining cases.

Officials said that both these cases –Karkey and Riko Diq – were likely to conclude sometime next year.

According to them, the country would have to pay astronomical sums because of the judgments of the Supreme Court led by former chief justice Iftikhar Muhammad Chaudhry.

“Currently, Pakistan is facing 36 cases of different nature at international courts. Some independent power producers (IPPs) have also filed cases with international arbitrators seeking clearance of their pending dues, which amount to more than a trillion rupees,” they said.

“Where will this money come from? Our economy is already in bad shape,” a senior official wondered.

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