PIA assets face huge loss at the hands of BVI

Lahore, 7th January: The Court of British Virgin Islands (BVI) has ordered to freeze the assets of the Pakistan International Airlines (PIA).

Baaghi TV: The British Virgin Island Court, where PIA is registered, has ordered the freezing of PIA assets including its two international hotels.

According to reports, this is in the Riko Diq copper mine case with Tethyan Copper Company (TCC). Tethyan Copper Company (TCC) had on Nov 20, 2020, approached the High Court of Justice for enforcement of the $5.97 bn awards against Pakistan by the Interna­tional Centre for Settlement of Investment Disputes (ICSID) in Reko Diq litigation on July 12, 2019.

The BVI high court had ordered through an ex parte on Dec 16, 2020, to attach the assets belonging to Pakistan International Airlines Investment Limited (PIAIL), including the company’s interests in two hotels namely Roosevelt Hotel in Manhatten, New York, and Scribe Hotel in Central Paris, and freeze 40 per cent interest of PIA in a third entity, Minhal Incorporated.

The source said that besides the government’s own legal team, Pakistani BVI companies had also appointed their team that will appear before the BVI court and contest the case.

The office of attorney general for Pakistan (AGP) had stated earlier that the government would pursue the proceedings initiated by TCC in any jurisdiction. The government reaffirmed its commitment to protecting the national assets wherever they might be located.

The source also said that Pakistan would oppose this move. The BVI court had in its Dec 16 order appointed the receiver on an interim basis.

According to media reports, the receiver, Paul Pretlove of Kalo Advisors, is expected to ensure that the hotels are not sold below the market rate and secure the proceeds of any sale that takes place.

The information about the attachment proceedings and the order of the BVI high court were communicated to Pakistan on Dec 23.

As per reports from Dawn News, the ICSID tribunal had taken up the dispute between Pakistan and TCC which had claimed $8.5 bn for rejecting the latter’s application by the mining authority of Balochistan for the multimillion-dollar mining lease in the province in 2011.

Pakistan had taken the plea before the World Bank’s ICSID, saying that the mining licence at Riko Diq was acquired through corrupt means and, therefore, TCC could not ask for damages.

Dawn News also tell that in September 2020, the World Bank-funded tribunal stayed the enforcement of the award against Pakistan, but with certain conditions to furnish irrevocable bank guarantee for 25pc of the total award which the ICSID had awarded from a reputable international bank based outside Pakistan.

Later in November, Law360, a website that deals with news and analysis on legal developments, reported that the Australian copper mining joint venture had been given the green light to try to collect 50pc of the massive arbitral award against Pakistan.

Pakistan and TCC met in London in October 2019 where they agreed to remain open for a negotiated out-of-court settlement of the dispute, But Pakistan is also actively engaged in negotiations with the relevant parties involved in the Riko Diq litigation dispute.

Earlier, Pakistan had welcomed a statement made by Mr William Hayes, chairman of the Board of Directors of TCC, where he expressed to work towards a negotiated settlement.

William Hayes had stated that the company was willing to discuss the potential for a negotiated settlement with Pakistan and would continue to protect their commercial interests and legal rights until the conclusion of this dispute.

It is pertinent to note here that TCC is a 50-50 joint venture of Barrick Gold Corporation of Australia and Antofagasta PLC of Chile.

Reko Diq is a small village in Chaghai district of Balochistan, located near the Iran-Afghanistan border.

Reko Diq is the fifth-largest gold and copper deposit in the world. In July 1993, the then Chief Minister of Balochistan Nawab Zulfiqar Ali Magsi awarded the contract for the Reko Diq project to the Australian company PHP.

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