ISLAMABAD: The Pakistani government has resolved the Karkey dispute with the help of Turkish President Recep Tayyip Erdogan, Prime Minister Imran Khan announced on Monday.
In a tweet, PM Imran said the matter was resolved “amicably” and that Pakistan had successfully saved $1.2 billion — the sum the International Centre for Settlement of Investment Disputes (ICSID) had imposed as a penalty on Islamabad.
“PTI govt, with the help of President Erdogan, has amicably resolved the Karkey dispute and saved Pak USD 1.2 billion penalty imposed by ICSID,” the premier wrote.
Adviser to Prime Minister on Revenue Dr. Abdul Hafeez Shaikh in a tweet said” A positive development for the country. Under the leadership Prime Minister Imran Khan, Government of Pakistan has resolved Karkey dispute saving $1.2 bilion to the economy. This amount can now be spent on the development and better facilities for the public”.
Last month, the ruling Pakistan Tehreek-e-Insaf’s (PTI) leader and senior lawyer, Babar Awan, had told media that the $1.2-billion sum was likely to be waived off due to backdoor negotiations between the two countries. “International institutions, through high-level backdoor contacts, have agreed to waive off the penalty,” Awan had told reporters at a press conference.
“This is very good news for Pakistan. International institutions have shown their trust in Prime Minister Imran Khan.” The ICSID — an arm of the World Bank that offers arbitration and conciliation services for disputes between governments and private foreign investors — had slapped a penalty worth $760 million plus interest to the Turkish ship-based energy firm, Karkey Karadeniz Elektrik Uretim, following the latter’s move to register arbitration claims against Pakistan under a bilateral investment treaty (BIT).
In September 2017, it had decided in favour of Karkey Karadeniz Elektrik Uretim and imposed a fine. The Turkish firm had registered a claim with the ICSID against Pakistan in 2013 over the violation of a contract worth as much as $564.6 million for a five-year period to build rental power plants in Karachi.