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International court slaps $5.976 billion penalty on Pakistan over 2011 case

New Delhi, News Nation Bureau | Updated : 15 July 2019, 10:22 AM
Pakistan faces dangerously low foreign reserves, a tax base of barely 1 per cent of its population, crushing trade deficits and a hefty defence budget.  (File Photo)
Pakistan faces dangerously low foreign reserves, a tax base of barely 1 per cent of its population, crushing trade deficits and a hefty defence budget. (File Photo)

In a major setback for Imran Khan government, an international court has imposed whopping $5.976 billion penalty on Pakistan in connection with the 2011 mining case. According to noted Pakistani daily ‘Dawn’, the International Centre for Settlement of Investment Disputes (ICSID) slapped the fine against Islamabad over unlawful rejection of a lease to a global company in Balochistan’s Reko Diq area. According to the report by the Pakistani newspaper, Reko Diq is a nondescript town in Balochistan’s Chagai district. The name of the town comes, which means sandy peak, comes from Balochi language, the Dawn reported. It is believed that Reko Diq has fifth largest gold deposit in the world.

In its 2012 complaint, the Tethyan Copper Company, which is a joint venture between two companies from Chile and Canada, had said that despite its decade-long study and research, the Balochistan government had unlawfully declined to award the mining lease to the company. In its ruling that ran into 700 pages, the international court awarded a $ 4.08 billion penalty and $1.87 billion in interests, Dawn reported.

A Reuters report quoted the TCC officials as saying that said it had invested more than $220 million by the time Pakistan’s government, in 2011, unexpectedly refused to grant them the mining lease needed to keep operating. However, there are reports that TCC has expressed ‘willingness’ for settlement with Pakistani government. 

Meanwhile, hundreds of thousands of Pakistani businesses called for nationwide over the weekend to protest a new sales tax, which opposition political parties say is being imposed as part of the International Monetary Fund's recent USD 6 billion bailout package for Islamabad.

Saturday's strike happened in shopping malls and wholesale commodity markets, small shops and electronics stores. In the country's commercial hub, Karachi, divisions among retailers made the strikes less effective. Opposition Senator Mushahid Ullah Khan says the government's "ill-conceived" financial policies have led to price hikes.

The IMF approved the bailout on July 3, saying it would help reduce public debt and expand social spending. Pakistan faces dangerously low foreign reserves, a tax base of barely 1 per cent of its population, crushing trade deficits and a hefty defence budget.  

First Published: Monday, July 15, 2019 09:35 AM
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