SC wonders if obligations will be fulfilled in Reko Diq deal.

ISLAMABAD -- The Supreme Court on Tuesday expressed apprehensions regarding obligations under the proposed settlement agreement in Reko Diq exploration deal, which if not fulfilled may expose Pakistan to further penalty similar to the $6.5 billion award by the International Centre for Settlement of Investment Disputes (ICSID) tribunal.

However senior counsel Makhdoom Ali Khan, who is representing the Barrick Gold Corporation (BGC), tried to allay the court's uneasiness by explaining that unless the mining exploration or entry to the exploration site was denied to the company, that too after reaching the settlement agreement, nothing may lead to international arbitration.

This emerged during the hearing of the presidential reference on the Reko Diq issue before a five-judge SC bench.

When asked by Justice Ijaz-ul-Ahsan that since the exploration site borders both Afghanistan and Iran, would any security situation arise, leading to negative effect on the deal between Pakistan and BGC, the counsel explained that possibility of arbitration may occur if complicity of Pakistan was established in such a security situation in the area or if the government somehow decides not to provide security or walks away from the deal or tried to scare away the investor after signing of the agreement.

BGC counsel says his client is not in the business of running countries bankrupt

The Reko Diq project is located 50km from Afghanistan and 40km from Iran and according to the pleadings of Pakistan before earlier ICSID tribunal, the region was one of the most unstable and dangerous areas of Pakistan.

But the counsel explained to the court that Tethyan Copper Company Private Limited (TCCP), with which Pakistan had entered into agreement earlier, had found Balochistan to be a safe place since not a single nail had gone missing from their warehouse situated in the province all during the period when the parties were before the arbitration tribunal, even though there were not ample security for the safekeeping of their equipment.

'This is very encouraging,' observed Chief Justice of PakAistan (CJP) Umar Ata Bandial, who was heading the bench.

BGC does not want to proceed with further litigation, because it is not in the business of litigation. It is in the business of building and operating world-class mines and not in the business of running countries bankrupt, the counsel emphasised. 'They are not colonial minded,' CJP observed. 'Hopefully,' replied the counsel.

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