An international tribunal granted a stay pending a final decision on a $5.8 billion penalty imposed on Pakistan for denying a mining lease to an Australian company, an adviser to Pakistan's prime minister said Friday.
Pakistan had appealed the penalty imposed by the World Bank’s International Center for Settlement of Investment Disputes, and has said it would hinder the country's handling of the coronavirus pandemic. The case is testing Prime Minister Imran Khan’s ability to use back-channel diplomacy to settle disputes and keep alive efforts to lure more foreign investors to his impoverished country.
The fine, nearly $6 billion including the damages award and interest, would be equal to about 2% of Pakistan’s GDP and is on a par with a $6 billion bailout package the country secured last year from the International Monetary Fund. Experts have questioned the reasoning behind the huge award, which is more than double the size of the largest similar arbitration award in a case between Dow Chemical and Kuwait Petrochemical Corp.
Saleem Bajwa, an adviser to Khan, tweeted Friday that the tribunal's decision was a “great relief” for Pakistan. The decision was also hailed as a “success” in a brief statement from the attorney general’s office late Thursday. Both Islamabad and the mining company have said they're willing to consider a settlement pending a final decision on the award, which might not come until next year.
The tribunal declined to comment Friday in response to a request by The Associated Press.
The penalty centered around Pakistan's cancelling of the Reko Diq mining lease for Australia's Tethyan Copper Corp., a 50-50 joint venture of Barrick Gold Corp. of Australia and Antofagasto PLC of Chile, to build and operate a copper-gold open-pit mine.
The Reko Diq district in southwestern Pakistan’s Baluchistan province is famed for its mineral wealth, including gold and copper. Khan’s government considers it a strategic national asset, especially as prices for commodities surge, with gold recently at more than $2,000 an ounce. The Baluchistan government has since set up its own company to develop the mine.
Tethyan had invested $220 million in Reko Diq by 2011, when Pakistan terminated its mining lease. The company sought help the following year from the tribunal, which ruled against Pakistan in 2017.
Paying compensation equivalent to 40% of Pakistan’s foreign exchange reserves would have been a challenge as it struggles to revive its economy. The coronavirus pandemic has infected more than 300,000 of the country's 212 million people and killed more than 6,400, while the economy contracted for the first time in decades in the fiscal year that ended in June.
ISLAMABAD (AP) — The leaders of Iran and Pakistan agreed to strengthen economic and security cooperation in a meeting on Monday that sought to smooth over a diplomatic rift.
Ties were strained between the neighbors in January when each carried out strikes in the other’s territory, targeting militants accused of attacking security forces.
Iran’s President Ebrahim Raisi met with Pakistani Prime Minister Shehbaz Sharif and other officials on his three-day visit. Authorities deployed hundreds of additional police and paramilitary forces for security.
Pakistan has witnessed a surge in militant violence in recent months, mostly blamed on Pakistani Taliban and insurgents targeting security forces in Pakistan and neighboring Iran.
According to a statement, the two leaders discussed a range of bilateral issues and vowed to cooperate to fight terrorism. They reiterated their condemnations of Israel's war against Hamas in Gaza.
Sharif praised Iran’s “strong stand on the issue of Palestine” and said “Pakistan is also with the Palestinians.”
Raisi said the killings by Israel in Gaza were being committed with the support of the United States and other Western countries. He criticized international organizations, including the United Nations, saying, “They say they support human rights, but they proved that they are inefficient.”
The visit comes after Iran’s unprecedented direct strikes on Israel and an apparent Israeli response. Pakistan is among the countries that have no diplomatic relations with Israel because of the issue of Palestinian statehood.
Raisi also vowed to boost what he called “unacceptably” meager bilateral trade with Pakistan and called for setting up more border markets. Pakistan and Iran set up the first such border market in southwestern Pakistan's Baluchistan province last year, promising five more under a 2012 agreement.
The two leaders signed eight cooperation agreements, according to Sharif's office.
Authorities said the two sides also discussed a multi-billion gas pipeline project, on hold since 2014. The project — opposed by Washington as a violation of sanctions imposed on Tehran over its nuclear program — launched in 2013 to supply Iranian natural gas to energy-starved Pakistan.
Iran says it had already completed the pipeline on its side of the border after investing $2 billion. Pakistan was supposed to finish construction on its territory by the end of 2014 but work stalled, leading to tensions between the nations.
The Iranian president later met with his Pakistani counterpart Asil Ali Zardari, who helped launch the pipeline project after traveling to Iran in 2013.
On Monday night, Pakistan's powerful army chief Gen. Asim Munir met with the Iranian president, the military said in a statement. It said their discussion focused on "matters of mutual interest, notably regional peace, stability and border security.”
The statement said Munir described the Pakistan-Iran border as “the border of peace and friendship" but emphasized the need for improved coordination there “to prevent terrorists from jeopardizing the longstanding brotherly relations.”
It quoted Raisi as saying that by fostering cooperation between the militaries, Iran and Pakistan “can attain peace and stability for both nations and the region."
Raisi also met with Pakistan's Foreign Minister Ishaq Dar. The two discussed regional and global developments and “affirmed commitment to peace and constructive dialogue for resolving regional challenges."
Raisi is accompanied by his spouse and a high-level delegation. He plans to visit Karachi, Pakistan's biggest city, and Lahore, where he will meet with the country's recently elected first female chief minister, Maryam Nawaz Sharif.
In this photo released by Press Information Department, Iranian President Ebrahim Raisi, second left back, with Pakistan's Prime Minister Shehbaz Sharif, right back, witness a signing of MoUs of cooperation in different fields between Iran and Pakistan at prime minister house in Islamabad, Pakistan, Monday, April 22, 2024. Iranian and Pakistani leaders vowed to strengthen economic and security cooperation in a meeting on Monday, as the two countries seek to smooth over a diplomatic rift. (Press Information Department via AP)
In this photo released by Press Information Department, Iranian President Ebrahim Raisi, second left, holds official talks with Pakistan's Prime Minister Shehbaz Sharif, second right, at prime minister house in Islamabad, Pakistan, Monday, April 22, 2024. Iranian and Pakistani leaders vowed to strengthen economic and security cooperation in a meeting on Monday, as the two countries seek to smooth over a diplomatic rift. (Press Information Department via AP)
In this photo released by Press Information Department, Iranian President Ebrahim Raisi, left, shakes hand with Pakistan's Prime Minister Shehbaz Sharif prior to their meeting at prime minister house in Islamabad, Pakistan, Monday, April 22, 2024. Iranian and Pakistani leaders vowed to strengthen economic and security cooperation in a meeting on Monday, as the two countries seek to smooth over a diplomatic rift. (Press Information Department via AP)
In this photo released by Prime Minister Office, Iranian President Ebrahim Raisi, right, with Pakistan's Prime Minister Shehbaz Sharif, left, prays after planting a tree in the prime minister house in Islamabad, Pakistan, Monday, April 22, 2024. (Prime Minister Office via AP)
In this photo released by Prime Minister Office, Iranian President Ebrahim Raisi, left, walks with Pakistan's Prime Minister Shehbaz Sharif during a welcome ceremony in the prime minister house in Islamabad, Pakistan, Monday, April 22, 2024. (Prime Minister Office via AP)
In this photo released by Prime Minister Office, Iranian President Ebrahim Raisi, left, walks with Pakistan's Prime Minister Shehbaz Sharif during a welcome ceremony in the prime minister house in Islamabad, Pakistan, Monday, April 22, 2024. (Prime Minister Office via AP)
In this photo released by Prime Minister Office, Pakistan's Prime Minister Shehbaz Sharif, left, greets to Iranian President Ebrahim Raisi upon his arrival in the prime minister house in Islamabad, Pakistan, Monday, April 22, 2024. (Prime Minister Office via AP)
In this photo released by Pakistan's Ministry of Foreign Affairs, Iranian President Ebrahim Raisi gets down from plane upon his arrival in Islamabad, Pakistan, Monday, April 22, 2024. Raisi arrived in Islamabad on a three-day visit on Monday, during which he will discuss a range of issues with authorities in Pakistan's capital, officials said. (Ministry of Foreign Affairs via AP)
