ISLAMABAD: The International Centre for Settlement of Investment Disputes (ICSID) suspended an award worth over $860 million (Rs120 billion) in favour of Turkish power company Karkey Karadeniz Elektrik Uretim, providing much-needed relief to Pakistan.
On August 22, 2017, the ICSID has awarded damage claim in favour of Karkey after the company filed a case against the government of Pakistan for terminating its rental power project contract. The contract had been terminated on Supreme Court orders.
According to the initial ICSID award, Pakistan had to pay damages amounting to more than $800 million, along with $5.6 million (Rs590 million) per month as interest to Karkey. It is learnt that the total amount due is now approaching $900 million.
the PTI-led government has initiated ‘revision proceedings’ in the ICSID to set aside the 2017 award in Karkey Karadeniz versus Pakistan, adding that Article 51 of the ICSID conviction allows parties to a dispute to bring to the tribunal any new facts that could decisively affect the award.
Pakistan pleaded that it had gathered fresh ‘evidence of corruption’ in the procurement of a rental power project (RPP) contract by the Turkish company. The government is confident that if will establish through the new evidence that the Karkey was involved in systematic corruption to secure the contract.
Following the suspension of the award, enforcement proceedings against Pakistan have been halted. For much of last year, the company had approached different countries’ courts for the enforcement of the award.
Generally, revision proceedings can take a couple of years. Though the sources claim Pakistan has a very good case and has very solid and undeniable evidence, records show that around 600 parties have approached ICSID for the annulment of an award since 1960, and only 17 have been successful in getting revisions.
Now Pakistan has engaged new legal representation – GST LLP – to contest the revision proceedings before the ICSID.