Inside Financial Markets

Supreme Court orders National Refinery to pay Rs305 million to SBP

The Supreme Court has ordered National Refinery Limited (NRL) to pay Rs305 million to the State Bank of Pakistan (SBP) for failing to pay Saudi Aramco (Saudi Arabian Oil Company) its dues on time.

A three-member bench headed by Chief Justice Mian Saqib Nisar heard the case, filed by the Federal Board of Revenue (FBR).

It concerned a fine levied by SBP on National Refinery for violating a 1998 contract.

NRL’s lawyer had attempted to argue that SBP had not defined whether the payments were fines or penalties.

However, the court dismissed NRL’s appeal and upheld the fine imposed by SBP.

Representing the FBR, Siddique Mirza maintained that SBP had fined NRL according to the law.

He elaborated that the fine stood at a daily Rs4 for every 10 tonnes delivered late, and informed the court that the SBP had had to make timely payments to Saudi Aramco in the form of foreign currency.

“SBP acted as a sovereign guarantee between National Refinery and the Saudi oil company,” the Chief Justice observed.

“SBP imposed lawful fines when the payments were not made on time,” Justice Saqib stated. “Previous courts made complicated judgements on the case,” he continued, “but the matter requires a one-line judgement.”

ADDENDUM: In an email sent to Wednesday, NRL’s company secretary wrote: “Please be informed that the amount of Rs.305Million relates to amount already paid to SBP which was disallowed by FBR authorities in tax computation in 1998.” “The resultant tax on above disallowance is Rs.96million (approximately) which is the only exposure towards FRB and nothing is payable to SBP in this account.”

An earlier version of this story erroneously mentioned the payable amount to be Rs3.05 billion. The error is regretted.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)