Virgin Islands court unfreezes PIA assets in Reko Diq case

The High Court of Justice in the British Virgin Islands (BVI) has recalled its earlier orders regarding attachment of PIA offshore assets in the Reko Diq case against Pakistan.

BVI High Court Justice Gerhard Wallbank, while passing the order on December 10, 2020, had attached certain assets of PIA.

The court had attached the assets belonging to Pakistan International Airlines Investment Limited (PIAIL), including the company’s interests in two hotels — Roosevelt Hotel in Manhattan, New York, and Scribe Hotel in Central Paris.

In view of the injunction, PIA could not sale any of these hotels.

“A short while ago judgment was announced by British Virgin Island High Court. Great legal victory for PIA and Pakistan. The order was passed earlier on the request of TCC which was seeking enforcement of Reko Diq award. All orders passed against PIA earlier are now recalled by the Court. Receiver removed from Roosevelt hotel, NY and Scribe hotel, Paris. Cost of litigation also awarded,” said a statement issued by the Attorney General for Pakistan (AGP) office on Tuesday.

Additional Attorney General for Pakistan and Head of International Disputes Unit Ahmed Irfan represented Pakistan before the BVI court. The Pakistan International Airline (PIA) engaged its own legal team in the case. Likewise, all offshore companies, two registered PIA hotels hired their separate counsels.

Prime Minister Imran Khan has appreciated the efforts of the international disputes unit and the office of the attorney general.

Also read: Pakistan wins stay over $6 billion penalty in Reko Diq case

Tethyan Copper Company (TCC) on November 20, last year had sought attachment of assets for enforcement of the $6 billion award that the International Centre for Settlement of Investment Disputes (ICSID) slapped on Pakistan on July 12, 2019, for revoking the TTC mining contract at Reko Diq in Balochistan.

Despite withdrawal of attachment orders by the BVI court, $6 billion award against Pakistan will still be intact.

The ICSID stayed the enforcement of the $6b award and on September 17 and issued a 70-page order which said the stay shall continue on a conditional basis.

The arbitrator ordered Pakistan to provide an “unconditional and irrevocable” bank guarantee or the letter of credit (LC) for 25 per cent of the award, plus accrued interest as of the date of the decision.

The guarantee or the LC was to come from a reputable international bank based outside of Pakistan, which was pledged in favour of the claimant — the TCC — and to be released on the order of the ICSID.

The ICSID also held that if Pakistan could not furnish the security and undertaking in terms as set out within 30 days after notification of the decision, the stay of enforcement in the amount of 50 per cent of the award, plus accrued interest as of the date of the decision would be lifted.

However, Pakistan missed the deadline and did not deposit 25 per cent bank guarantee.