A World Bank arbitration court has imposed a penalty of over five billion dollars on Pakistan for unlawful denial of a mining lease to a company for the Reko Diq project in 2011.
The Tethyan Copper Company had approached the International Centre for Settlement of Investment Disputes in 2012 after the Balochistan government declined its lease request. The international tribunal on Saturday announced in a 700-pages ruling that Pakistan has to pay Tethyan Copper USD 5.8 billion in damages, Samaa News reported.
Pakistan’s Supreme Court had terminated the deal in 2013. The mining company said that it had invested over USD 220 million on Reko Diq.
The company is still “willing to strike a deal with Pakistan,” Tethyan board chair William Hayes said in a statement. But, added that “It would continue protecting its commercial and legal interests until the dispute was over.”
The case between the Pakistani government and the international company continued for at least seven years.
The penalty came as a major blow to the cash-strapped economy of Pakistan that has received billions in financial aid packages from international organizations such as the International Monetary Fund (IMF) and a few friendly countries, including China, Saudi Arabia and the United Arab Emirates (UAE) during the current fiscal year.
Prime Minister Imran Khan on Sunday issued orders for the formation of a commission to investigate and fix responsibility for the massive loss borne by Pakistan in the Reko Diq case.