ISLAMABAD: Following Germany and United Kingdom (UK), France has also raised its concerns on challenges being faced by its companies working in the energy sector of Pakistan, sources close to SAPM on Power told Business Recorder.
At a recent bilateral meeting in Riyadh, Saudi Arabia, with Prime Minister, Shehbaz Sharif, French President Emmanuel Macron referred to challenges being faced by French energy companies in Pakistan, and the Prime Minister assured him that these challenges would be resolved, the sources added.
Meanwhile, Ministry of Foreign Affairs (MoFA) has informed the SAPM on Power that Pakistan Mission in Paris has received notification of a claim from Karim-ud-Din, owner of Halmore power project, concerning alleged breach of international obligations under the BIT filed through a Paris-based counsel.
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The notification has also been addressed to the offices of the Prime Minister, Deputy Prime Minister/ Foreign Minister, Minister for Energy, Attorney General and SAPM on Energy.
The sources said, MoFA told SAPM on Power that the government of the UK and Northern Ireland and the Government of the Pakistan for the Promotion and Protection of Investments signed an agreement on 30th November 1994. The desire was to create favourable conditions for greater investment by nationals and companies of one State in the territory of the other State.
Under this agreement, Article 8 relates to Settlement of Disputes between an Investor and a Host State. According to Article 8 of the Agreement, when a dispute between a national or company of one Contracting Party and the other Contracting Party concerning an obligation of the letter under the Agreement in relation to an investment of the former which have not been amicably settled shall, after a period of three months from written notification of a claim, be submitted to international arbitration if the national or company concerned so wishes.
MoFA has opined that where the dispute is referred to international arbitration the national or company and the Contracting Party concerned in the dispute may agree to refer the dispute either to the International Centre for the Settlement of Investment Disputes or the Court of Arbitration of the International Chamber of Commerce or an international arbitrator or ad-hoc arbitration tribunal to be appointed by a special agreement or established under the Arbitration Rules of the United Nations Commission on International Trade Law.
However, if after a period of three months from written notification of the claim there is no agreement to one of the above alternative procedures, the dispute shall at the request in writing of the national or company concerned be submitted to arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law as then in force.
Karim-ud-Din’s counsel, Banefatemi has presented a written notification of a claim pursuant to Article 8 of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Islamic Republic of Pakistan.
“Claiming breaches by Pakistan of its international obligations under BIT, Karim-ud-Din, has requested that settlement discussions be under taken under Article 8 (1) of the Agreement. The notice further states that if this dispute cannot be resolved amicably within three months from the date of this written notification, Karim-ud-Din reserves the right to submit his claim to international arbitration under Article 8(2),” MoFA said, requesting Ministry of Commerce, Board of Investment and other relevant stakeholders to examine the notification and take appropriate action.
According to the notification, on November 11, 2024, Halmore’s CEO was summoned and threatened with detention unless Karim-Ud-Din— who resides in London—authorised the acceptance of pre-determined terms that could potentially lead to Halmore’s bankruptcy. Although the CEO was eventually released, Pakistan has continued to exert pressure on Karim-Ud-Din to compromise on his rights, placing Halmore’s future, as well as the security of its personnel, in immediate danger.
The notice also highlights that Pakistan’s actions are not only coercive but discriminatory. While some privately owned IPPs, including Halmore, have been targeted, state-owned energy producers and other IPPs owned by Chinese investors have not faced the same treatment, said the sources.
The sources said, the issue of Rousch Power, which was raised by Germany on behalf of Siemens, is already resolved. However, the issues of Halmore and French companies are still unresolved.
Copyright Business Recorder, 2024
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