The Ministry of Law and Justice has reportedly become involved in the ongoing dispute between the Government of Pakistan and the Independent Power Producer (IPP), M/s Halmore, reported Business Recorder. The dispute, which has been escalating, has prompted several ministries to weigh in on the issue.
According to well-placed sources, the Ministry of Foreign Affairs (MoFA) had forwarded the notification regarding M/s Halmore to the relevant ministries, including the Law Ministry and the Attorney General for Pakistan. The Law Ministry, however, clarified that it is not a party to the agreement in question. The Ministry suggested that the Attorney General’s Office, which is directly handling the matter, should be contacted for further action.
The roots of the dispute trace back to an agreement signed on November 30, 1994, between the United Kingdom, Northern Ireland, and the Government of Pakistan. The agreement was intended to foster better conditions for investments by nationals and companies of the signatory states. Specifically, Article 8 of the agreement outlines provisions for settling disputes between investors and the host state.
Under Article 8, if a dispute regarding an investment is not amicably resolved within three months from the date of written notification, the matter can be submitted to international arbitration. The agreement offers multiple options for arbitration, including the International Centre for the Settlement of Investment Disputes, the International Chamber of Commerce, or a tribunal established under the United Nations Commission on International Trade Law’s Arbitration Rules. In cases where no agreement is reached within the specified period, the dispute will automatically proceed to arbitration under the United Nations Commission’s arbitration rules.
MoFA has conveyed its opinion that, should the dispute be referred to international arbitration, the involved parties may choose from the arbitration avenues mentioned in the agreement. However, if no consensus is reached within the three-month period following the notification, the matter will be resolved through arbitration.
In line with this process, Karim-ud-Din’s counsel, Banefatemi, has submitted a written claim, citing breaches by Pakistan of its international obligations under the bilateral investment treaty (BIT). The claim requests that settlement discussions proceed under Article 8(1) of the Agreement. Should the dispute remain unresolved within three months, Karim-ud-Din reserves the right to initiate international arbitration under Article 8(2), according to MoFA.
MoFA has urged the Ministry of Commerce, the Board of Investment, and other concerned authorities to review the notification and take necessary action.
Meanwhile, sources indicate that while revised agreements with 16 other IPPs have been finalized, issues persist with M/s Halmore, which remain to be resolved.
