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Supreme Court to resume Reko Diq hearing as Balochistan fights international arbitration

By Faisal Shakeel

ISLAMABAD: The fight over mining rights of Balochistan’s gold and copper reserves is being waged at home, and abroad.

While the provincial government contests international arbitration, the Supreme Court has set February 2 for resumption of proceedings against the Tethyan Copper Company’s (TCC) right to extract reserves worth billions of dollars.

Objections to arbitration

In its preliminary objections to the International Chambers of Commerce in London (ICC), the Balochistan government has declared its agreement with TCC ‘unlawful,’ The Express Tribune learnt on Sunday.

The objections have been raised by a team of local and international lawyers including former British prime minister’s wife Cherie Blair, Arthur Marriot, advocate Ahmar Bilal Soofi and Balochistan Advocate General Amanullah Kanrani. Balochistan government and the TCC developed differences over the valuation of the gold and copper reserves in Riko Diq area of district Chaghai.

The team of legal experts raised objections after the TCC moved the ICC against the Balochistan government for rejecting its application for mining lease, upon the completion of the feasibility study.

The TCC has also filed a request for arbitration at the International Centre for Settlement of Investment Disputes, against the federation.

The lawyers also dispute the jurisdiction of the ICC in taking up the matter. Until the Supreme Court decides the case against the legality of the agreement, it would not be in order for the ICC to take up the matter, the lawyers submitted.

The lawyers argue that the joint venture agreement between the Balochistan Development Authority and the TCC was ‘void and illegal’ because it entailed statutory independence of the licensing authority, and was against public policy. The lawyers say it was not a ‘concession agreement’ as popularly projected in media.

“It is in fact an agreement having an unlawful consideration to restrict the operation of an existing law – the 1970 Mining Rules,” the objections stated.

To TCC’s contention that it has a right to mining licence after completion of feasibility study, the lawyers submit that, in any case, the agreement did not guarantee grant of mining licence as a matter of right or in derogation of mining rules.

The lawyers add that the TCC could not have opted for international proceedings for it did not get approval of the Supreme Court.

The court, in its May 25, 2011 order, had allowed the Balochistan government “to expeditiously decide Tethyan’s application for grant of a mining lease and submit a report.”

Taking up the case again

After it adjourned the matter, members of Jamaat-i-Islami and the Workers Party, through their lawyer Raza Kazim, had asked the Supreme Court to take it up again, saying the TCC wanted to bypass the apex court.

The international arbitration tribunal would have no option but to give a decision in favour of TCC, which could lead to claims of billions of dollars in damages, if the court further delayed the proceedings, Kazim had submitted.

He asked the court to declare the agreement between the Balochistan government and TCC ‘illegal.’ His application would be taken up on February 2, according to a Supreme Court notice.

Read full story here

Published in The Express Tribune, January 30th, 2012.