The High Court of Justice (HCJ) in London has stopped Pakistan from pleading corruption allegations against an international mining firm as a defense to challenge the jurisdiction of an arbitral tribunal of the International Chamber of Commerce (ICC) in the Reko Diq case.
In the case, Province of Balochistan vs. Tethyan Copper Company (TCC), Judge Robin Knowles of the HCJ ruled that Balochistan can no longer plead corruption allegations against TCC as the Supreme Court of Pakistan (SCP) had not based its decision on corruption allegations in the Reko Diq.
Judge Knowles acknowledged that although SCP had revoked the mining license of TCC, its decision was not based on the allegations of corruption that Pakistan has leveled in the Province of Balochistan vs. TCC case. As a matter of fact, SCP did not refer to these allegations when it declared the mining license of TCC invalid.
He said that the Balochistan government opted not to raise the issue of corruption during the international arbitration and in fact, did not even allege corruption, adding that England’s arbitration law bars parties from raising issues before the court that were not raised during the arbitration.
Balochistan government had moved to the HCJ London against the ICC, contending that the ICC’s arbitral tribunal lacked jurisdiction in the Reko Diq case as the mining license of TCC was canceled on the charges of corruption.
It had argued that TCC bribed government officials and politicians to get undue advantage in securing a mining license in the province.
HCJ’s decision is a major setback for Pakistan as the Balochistan government was hoping to get the TCC’s arbitration case in the ICC quashed by using the decision of SCP in 2011 which revoked the mining lease of TCC, a consortium of Chilean and Canadian companies, for the Reko Diq project.
The case Province of Balochistan vs. TCC is part of the mining company’s second arbitration against Pakistan in ICC. The first one was in the International Centre for Settlement of Investment Disputes (ICSID), in which the company secured a $6 billion award against Pakistan in July 2019. ICSID had also rejected Pakistan’s allegations that TCC bribed politicians and government officials to secure the mining license of the Reko Diq.
Reko Diq, a small town in Chagai, Balochistan, has the biggest gold and copper deposits in Pakistan. Once fully developed, 250,000 ounces of gold and 200,000 tons of copper can be extracted from the mines each year for the next 50 years.