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RPP Case: WB Slapped Fine of $700m on Pakistan

Islamabad (September 20, 2017): The International Centre for Settlement of Investment Disputes (ICSID) has slapped 700 million dollars to Pakistan against the damage suit brought by Karkey Karadeniz Elektrik Uretim, a Turkish company that constructs and operates rental power plants (RPPs).

Karkey had filed the damages suit of two billion and ten million dollars against Pakistan at the ICSID in February 2013 after the Supreme Court’s ruling in the Rental Power Projects case in March 2012 o the requested filed by the Khawaja Asif and Faisal Saleh Hayat.

Karkey was awarded a $560 million contract for power ship operations in Pakistan to overcome a spiraling power crisis in the country. The initial contract was for five years. However, PPP-Patriots leader Faisal Saleh Hayat and the current foreign minister Khawaja Asif approached the top court against the contract awarded by the then PPP government.

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In 2012-13, then NAB prosecutor general KK Agha attempted to settle the issue with Karkey but the then chief justice Iftikhar Chaudhry stopped his efforts and warned NAB officials of strict action in case a settlement was reached with the Turkish firm.

At present, accountability courts are adjudicating corruption references filed over the RPP issue against several senior officials, including former prime minister Raja Pervez Ashraf. A senior official feared the ICSID verdict might affect NAB’s proceedings in these cases.

Sources claimed that Pakistan had offered 700 million dollars as damage suit to Karkey’s through Turk government but deal could not be struck.

Karkey’s case is not the only one where Pakistan had to bite the dust. In the Reko Diq case, the ICSID dismissed Pakistan’s allegations of corruption against the Tethyan Copper Company Pty Ltd (TCC). Later, the TCC made a claim of $11.5 billion but Pakistan’s rejected it. Now the quantum stage has started, with both federal and Balochistan governments involved, and the TCC may agree to an out-of-court settlement.

Sources said the quantum phase of the arbitration is a prolonged, self-contained phase in itself, in which the office of the attorney general for Pakistan is actively participating in defence of the country.

At present, AGP Ashtar Ausaf is abroad to deal with several issues, as Pakistan faced international litigations in a number of cases, including Indian spy Kulbhushan Jadhav’s case at the International Court of Justice.

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