TCC steps up efforts for $6bn claim in Reqo Diq case

Australian copper company has approached a US court for enforcement of $6bn penalty imposed on Pakistan by ICSID

The Australia-incorporated Tethyan Copper Company has approached a court in the United States for enforcement of $6 billion penalty which was imposed on Pakistan by the International Centre for Settlement of Investment Disputes (ICSID) in Reko Diq goldmines case, a private media outlet reported.

On August 9, the TCC – a joint venture of Chile’s Antofagasta and Canada’s Barrick Gold –filed a petition at a court for district Columbia after it won the award against Pakistan last month.

An ICSID tribunal on July 12 had ordered Pakistan to pay just over $4 billion in damages to the TCC, plus $1.7 billion in pre-award interest.

The tribunal found that Pakistan unlawfully denied the TCC a lease to mine copper and gold deposits at the Reko Diq mine, located in Chagai district of Balochistan. It held the state had committed an unlawful expropriation under the Australia-Pakistan bilateral investment treaty.

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The ICSID also declared that the Supreme Court of Pakistan’s 2012 judgment in the rental power projects (RPPs) case was ‘arbitrary’. According to the GAR report, the 622-page final award and earlier decisions in the case are now made public after being filed as exhibits in the US court.

The TCC entered into an agreement with Balochistan in 2006 to develop Reko Diq, on the basis of what it said were assurances from the federal and provincial governments, only to be later ousted from the project in 2012 after the Supreme Court of Pakistan declared the agreement void.

Later, the TCC approached the ICSID case which held a combined 32 hearings of the case in London, Hong Kong and Paris in the subsequent seven years. Pakistan made repeated efforts to have the TCC’s claims thrown out on the grounds that the investment was tainted by corruption.

Pakistan alleged that Tethyan and its predecessor BHP had paid numerous bribes in relation to the project. It also offered an expert opinion by US arbitrator and former president of the International Court of Justice Stephen M Schwebel in relation to its arguments on the TCC’s ‘unclean hands’.

Among its allegations, Pakistan said public officials had been provided with all-expenses-paid trips to Canada and Chile with unnecessary stopovers in Rio de Janeiro, New York, London and Nice. It said the TCC had considered bribing an official with the offer of a house in Islamabad and a BMW car.

The GAR report stated that the TCC denied the corruption allegations, which, it said, were a cynical attempt by the government of Pakistan to rescue its hopeless position in the arbitration.

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