ECC approves Rs 330mn reimbursement to PNSC, Ministry of Industries to lead Coniston arbitration

The Economic Coordination Committee (ECC) has approved a Technical Supplementary Grant of Rs 330.526 million to the Pakistan National Shipping Corporation (PNSC) for costs incurred in securing the release of its vessels in South Africa, according to a news report. 

The Ministry of Industries and Production will take the lead in negotiating and finalising the decade-old arbitration case with M/s Coniston Ltd over an alleged USD 15 million claim against Pakistan Steel Mills (PSM).

The case stems from claims by Coniston that PSM failed to meet its obligations, which led to the arrest of PNSC-owned vessels MV Chitral and MV Hyderabad in South Africa. The ships were released after PNSC provided security backed by a government indemnity.

The Ministry of Maritime Affairs informed the ECC that, since the first government indemnity in 2017, PNSC has incurred total expenditures of over Rs 479.5 million, including legal costs and insurance premiums. An additional insurance premium of USD 290,200 was due in July 2025.

Earlier, the Finance Division reimbursed Rs 149 million in FY 2020-21. The ECC’s latest approval covers the remaining expenditure, to be arranged in the fourth quarter of the current fiscal year.

Following recommendations from a committee constituted by the Prime Minister in 2023, the Ministry of Industries and Production will oversee arbitration proceedings and negotiate with Coniston for a counter-offer settlement between USD 6 million and USD 11 million, against the original USD 15 million claim.

Special Assistant to the Prime Minister on Industries and Production, Haroon Akhtar Khan, emphasized the need for swift resolution through proactive international arbitration to prevent further financial losses to the national exchequer.

The ECC also directed PSM to either contest the case independently in South Africa by placing its own security or expedite arbitration proceedings, while ensuring PNSC is absolved from further obligations. The Ministry of Maritime Affairs will submit a progress report on the matter within three months.