Arbitration proceedings on Reko Diq blocked
ISLAMABAD: Pakistan has been able to temporarily block proceedings of the International Court of Arbitration, continuing under the aegis of the International Chamber of Commerce and dealing with the Reko Diq dispute over mining lease in Balochistan, when its objections forced a member of the ICC tribunal to resign for being too close to Antofagasta Canada, one of the leading mining firms in the world.
Pakistan had objected to the appointment by the ICC’s International Court of Arbitration of William Rowley, QC, as co-arbitrator in the Reko Diq case. Mr Rowley accepted Pakistan’s objections and resigned from the tribunal, sources told Dawn.
Earlier, the ICC tribunal had turned down the nomination of Aziz A. Munshi and Shahid Hamid, Pakistan’s two legal and arbitration experts, on the objection of Tethyan Copper, a joint venture of Antofagasta and Barrack Gold.
The objection over Mr Munshi pertained to his comments over the pending Reko Diq case before the Supreme Court of Pakistan while the one over Mr Hamid was based on his participation in a seminar on Balochistan and the legal services he rendered to the provincial government in an unrelated case.
Mr Rowley was appointed by the ICC secretariat after turning down the nomination of Mr Munshi and Mr Hamid while accepting the claimant’s objections.
Pakistan immediately lodged a protest at Mr Rowley’s appointment, pleading that it constituted a denial of opportunity to Pakistan to nominate an arbitrator under the ICC rules. The objections were filed by Ahmer Bilal Soofi, a top legal expert, on behalf of the government of Balochistan.
Pakistan pleaded that the ICC rejected two distinguished Pakistani lawyers in a row to serve as the nominee on behalf of a provincial government entity and yet saw it fit suasponte (without a formal request) to appoint an arbitrator renowned for his sympathy to investors in investor-state disputes.
A conflict of interest was also pointed out by Pakistan as Mr Rowley was chairman emeritus of a law firm in Canada which acted for the mining firm Antofagasta.
The Balochistan government also criticised the swift ICC action taken with breathtaking insensitivity to the sentiments of the world’s sixth most populous nation and also for blithely disregarding instructions of the Supreme Court of Pakistan which ordered that no action be taken until it gave its own judgment on the dispute.
Also, the ICC chose an arbitrator who hailed from the very country and the very city in which the claimants’ major shareholder was located, added the provincial government.
In view of the objections, Mr Rowley withdrew from the tribunal.
The claim over the Reko Diq mines is already being fought between Canadian and Chilean-controlled Tethyan Copper Company (TCC) and the government of Balochistan before the Supreme Court.
The TCC, without waiting for the outcome of the Supreme Court judgment, invoked the jurisdiction of the ICC and International Centre for Settlement of Investment Dispute (ICSID) under the aegis of the World Bank and filed for the grant of mining licence purportedly in accordance with a joint venture agreement signed with the government of Balochistan in 1993.
The provincial government, on the other hand, questioned the ICC jurisdiction and filed detailed objections, claiming that the joint venture agreement had been executed without transparency and suffered from a series of irregularities. Also, the TCC had no absolute right to the mining lease on the basis of the JV agreement which, if one followed TCC’s arguments and after years of manoeuvring, led to curtailment of the discretion of the authority in charge of deciding mining lease applications and thus the same was against public policy and the existing mining law and rules of Pakistan.
Pakistan has also filed objections before the ICSID against the appointment of John Beechey for already being judgmental and biased against Pakistan which was apparent when the ICC twice disregarded directions of the Supreme Court of Pakistan.
Further and more troubling, it was found that Mr Beechey is also a former partner of a law firm, Clifford Chance LLP, which represents the TCC’s parent company and mining company Antofagasta.
Pakistan’s legal team consists of international law experts — Mr Soofi; Arthur Marriott, QC, a veteran of dozens of international mining arbitrations; Cherie Booth, QC, a leading lawyer; and Mehnaz Malik, an investment law expert.