BVI court unfreezes PIA’s assets, but $6bn award intact

LONDON: The High Court of Justice in the British Virgin Islands (BVI) has recalled all its earlier orders attaching Pakistan International Airline’s (PIA) offshore assets — The Roosevelt Hotel in Manhattan, Scribe Hotel in Paris and Minhal Incorporated — in the $6 billion Reko Diq case against Pakistan, according to the Attorney-General for Pakistan’s office.

In a statement, Khalid Jawed Khan announced that the BVI’s High Court has not only recalled the earlier orders but also removed receivers from the Roosevelt and Scribe hotels. “A short while ago judgment was announced by British Virgin Island High Court. Great legal victory for PIA and Pakistan. The order was passed earlier on the request of TCC which was seeking enforcement of Reko Diq award. All orders passed against PIA earlier are now recalled by the Court. Receiver removed from Roosevelt hotel, NY and Scribe hotel, Paris. Cost of litigation also awarded,” said the statement issued by the AGP office.

A legal source for the claimant Tethyan Copper Company (TCC) said the original order remains intact and Pakistan will have to settle the award at all costs.

The court in the BVI had heard the case on the enforcement of the award on 18th January, where Pakistan’s legal team had presented its case for the first time as the freezing order on the assets was issued ex parte at the previous hearing.

Pakistan engaged a team of lawyers for defence after the BVI High Court froze 100 per cent of assets belonging to the PIA, including interests in hotels in New York and Paris at the request of the Australian gold and copper exploration giant TCC to enforce the $6 billion award against Pakistan by World Bank’s International Centre for Settlement of Investment Disputes (ICSID). The court had also frozen the PIA’s 40 per cent interest in a third entity called Minhal Incorporated.

Justice Gerhard Wallbank had issued an ex parte order, in the middle of December 2020, allowing the Australian TCC to enforce up to $3.1 billion of the award. The TCC, on November 20, 2020, had filed a case in the BVI High Court for attachment of the assets belonging to the PIA but the government challenged the order.

In the order, the BVI Court of Justice had appointed a receiver (Paul Pretlove of Kalo Advisers) on an interim basis for PIA Investments and PIA Hotels which indirectly own The Roosevelt Hotel and the Scribe Hotel.

In 2019, an ICSID tribunal chaired by Germany’s Klaus Sachs, Bulgaria’s Stanimir Alexandrov and the UK’s Lord Hoffmann issued the award in favour of TCC holding the Government of Pakistan liable for denying Tethyan a lease to mine Reko Diq. Pakistan had applied against the award order before an ICSID committee. In October, the committee ruled that Tethyan could collect up to half the amount of the award.

News Desk adds: Federal Minister for Law and Justice Farogh Naseem in a press conference on Wednesday said the High Court of Justice in the British Virgin Islands (BVI) unfroze the PIA’s assets after accepting the sovereign immunity of Pakistan in the case.

He termed the decision “a great victory” as the BVI had sustained Pakistan’s point of view regarding sovereign immunity. He said the Supreme Court of Pakistan had suspended the Reko Diq contract with TCC over charges of corruption.