ISLAMABAD, Dec 26: Pakistan International Airlines said on Wednesday it would seek arbitration for resolving its dispute with Saudi Prince Faisal bin Khalid bin Abdulaziz Saud over the sale of his 1 per cent share in the airline’s subsidiary PIA Investments Limited (PIAIL) after a New York court dismissed his lawsuit against the airline.

PIA chairman Zaffar A. Khan told Dawn that the airline would seek arbitration in accordance with the shareholders’ agreement.

Earlier, Judge Naomi Reice Buchwald of the district court of the Southern District of New York, who was supervising PIAIL shares’ sale litigation, had dismissed on ‘forum non-conveniens’ grounds Prince Faisal’s lawsuit.

The Saudi prince, who holds 7,200 shares in the PIAIL, owner and manager of the Roosevelt Hotel in Manhattan and Hotel Scribe in Paris, had in his lawsuit accused PIA of interfering with his attempt to sell most of his shares in its investment unit.

Prince Faisal had wanted to sell his shares for $8.6 million to Alpha Capital MC Limited and intimated his intention to PIAIL in March this year, offering the stock at the same price to the airline’s investment unit, following his shareholder agreement signed in 1979.

Instead of refusing to acquire the shares and permitting their sale to a third party, the PIAIL initiated the redemption process of the prince’s shares for $480,000, much less than the offer he had received from the third party.

Dismissing the lawsuit, the judge observed that the plaintiff was a citizen and resident of Saudi Arabia and had not demonstrated any connections to New York.

Furthermore, the judge noted, the transactions had taken place abroad as did the alleged wrongdoing on the part of foreign defendants (PIAC and PIAIL) and the law applicable was also foreign.

The judge also rejected the plaintiff’s contention that courts in British Virgin Islands, where PIA is registered, were ill-equipped to handle the dispute since the plaintiff had a pending suit in the Islands and had agreed to invest in a corporation registered there.

Moreover, Judge Buchwald said Prince Faisal’s assertion that the most substantial asset of PIA, which would also need to be valued as part of appraisal process, was located in New York, was a valid argument, but ‘does not ultimately tip the scale against dismissal’ of the petition.

He further stated that since PIA’s Articles of Association were governed by British Virgin Islands’ laws, one of whose statutes gave the airline the impugned right of redemption, the courts in the Islands clearly had a strong interest in interpreting the controlling provisions. Sharjah, he said, might also have interest in the case because the shareholders agreement had been executed there.