Under the agreement a rental power project was installed in Karachi to supply 232MW of electricity to the Pakistan Electric Power Company.
"We expect a final decision from ICSID on the dispute at the end of January 2020 as M/s Karkey will submit a request to withdraw its case," the sources continued.
"M/s Karkey will move an application to the ICSID that it intends to withdraw case against Pakistan," the sources maintained.
Though the Government of Pakistan including Prime Minister, Imran Khan praised Turkish President Recep Tayyip Erdogan for playing a constructive role in resolution of the dispute and waiving off $ 1.2 billion amount, in fact no role has been played either by the Pakistani Prime Minister or Turkish President.
A team comprising senior officials of Power Division and Inter Services Intelligence (ISI) visited Istanbul about a dozen times and held meetings with the representatives of the firm and shared the documents obtained from Switzerland regarding payment of kickbacks by M/s Karkey Karadeniz Elektrik Uretin.
M/s Karkey was one of 12 rental power companies that had been awarded contracts by the Pakistan Peoples Party (PPP) government in 2008-09 to 'resolve' the power crisis. The company moved the International Centre for Settlement of Investment Disputes (ICSID) which imposed a $1.2 billion penalty on Pakistan in 2017, which is now amicably resolved.
According to sources, when concrete evidence related to paying of kickbacks was tabled before the company's representatives it shocked them and had the proof or evidence been presented in Europe, the operations of M/s Karkey would have closed. Sources claim that evidence has to be shared with the concerned firm/company prior to submission in any court of law.
On August 22, 2018, ICSID awarded against GoP along with interest thereupon. Subsequently Karkey went into enforcement of arbitration award of about $ 900 million against Pakistan in various jurisdictions including the USA, UK, Germany and France.
National Accountability Bureau (NAB) also arrested a 'front man', Laeeq Ahmed Sheikh, during investigation for 'corrupt' practices and misuse of authority in the award of RPPs contract to M/s Karkey, in addition to former Secretary Water and Power, Shahid Rafi and Former CEO of Lakhra Power Generation Company Limited (LPGCL) Anwar Brohi.
NAB had claimed that $365,000 was "illegally" transferred by Raja Babar Ali Zulqarnain from a bank of his offshore company M/s Lead Burn Global Ltd to BVI-based offshore company CGEL of the accused. However, this information cannot be presented before the international court as evidence. Pakistan had also hired a Swiss firm against payment of a heavy fee for the arrest of Laeeq Ahmed Sheikh to be used as leverage to get a "deal".
The then Prime Minister Shahid Khaqan Abbasi had also approved about $35 million for an out-of-court settlement but the then government delayed it saying "it will look into it" but did nothing.
M/s Karkey had set up 'world's biggest' ship-mounted Rental Power Project (RPP) at Port Qasim, Karachi, pursuant to the Rental Power Policy 2008, announced by the then government of Pakistan (GoP). M/s Karkey entered into Rental Services Contract (RSC) on April 23, 2009 for generation of electric power with the Lakhra Power Generation Company Limited (LPGCL). Pursuant to the terms of the RSC, the GoP issued a sovereign guarantee to secure payment obligations of LPGCL and Karkey achieved commercial operations in April 2011. In the meanwhile, the Supreme Court in exercise of its original jurisdiction initiated suo motu proceedings against RPPs and through its detailed judgment of March 30, 2012, declared all RSCs void ab initio, being illegal and against public policy. The Supreme Court also directed National Accountability Bureau (NAB) to carry out an investigation under the NAB Ordinance 1999.
The ICSID awarded against GoP an amount of $ 760 million along with interest thereupon. After the award, Karkey went into enforcement of arbitration award against Pakistan in various jurisdictions including the US, the UK, Germany and France. The sources said M/s Karkey will submit papers in ICSID showing that it has struck a deal with Lakhra Power Generation Company Limited (LPGCL), requesting to withdraw the case. The Turkish firm, sources said, is also being given a guarantee in writing that GoP or NAB will not take any further action against the company or its representatives in Pakistan.