Inside Financial Markets
Reqo Dik awards: BVI High Court unfreezes PIA’s assets, keeps $6Bn award intact - Inside Financial Markets

Reqo Dik awards: BVI High Court unfreezes PIA’s assets, keeps $6Bn award intact

– The News

The High Court of Justice in the British Virgin Islands (BVI) has lifted the attachment orders on PIA’s offshore assets — Roosevelt Hotel in Manhattan, Scribe Hotel in Central Paris and Minhal Incorporated — in the US$6 billion Reqo Diq case against Pakistan, according to Attorney General of Pakistan’s office.

The News has learnt that the High Court judge lifted the receivership and didn’t make any final determination whether the PIA could be held accountable for the debt owed by Pakistan. Thecourt sources said that the injunction prohibiting the sale of the assets remains in place, while the Claimant Tethyan Copper Company (TCC) was granted leave to appeal.

“It was a good day for Pakistan, the judge lifted the receivership but kept the injunction on. The PIA’s liability role will be determined at later hearings. The injunction is in place till the matter goes to the appellate court,” the source shared, adding that the US$6 billion Reko Diq award, however, remains intact and Pakistan will have to comply with a new timeline in the litigation.

In a statement, Khalid Jawed Khan announced that the BVI’s High Court has not only recalled the earlier orders but also removed receivers from Roosevelt and Scribe hotels. A TCC source said the original award of US$6 billion remains intact and Pakistan will have to settle the award in World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

The High Court of Justice in the BVI had heard the case on enforcement of US$6 billion award in the Reko Diq case on 18th January 2021 where Pakistan’s legal team challenged the freezing order on the assets issued ex parte in December 2020. The court had also frozen the PIA’s 40pc interest in a third entity called Minhal Incorporated.

Justice Gerhard Wallbank had issued an ex parte order in the mid-December 2020 allowing the Australian TCC to enforce up to US$3.1 billion of the award. The TCC on November 20, 2020, had filed a case in the BVI High Court for attachment of the assets belonging to the PIA.

In 2019, an ICSID tribunal chaired by Germany’s Klaus Sachs, Bulgaria’s Stanimir Alexandrov and the UK’s Lord Hoffmann issued the award in favour of TCC, holding the Government of Pakistan liable for denying Tethyan a lease to mine Reko Diq.

Pakistan had applied against the award order before an ICSID committee. In October, the committee ruled that Tethyan could collect up to half the amount of the award.

The long-running dispute arose after Balochistan refused TCC a mining lease for the development of a USD$3.3 billion copper-gold mine at Reko Diq in 2011. After failing to find a resolution, the TCC filed a case against Pakistan with the ICSID in 2012. On 12th July 2019, the ICSID rendered an award of USD$5.976 billion, which included USD $4.08 billion penalty and USD $1.87 billion in interest.

Syed Zaki Hussain

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