ISLAMABAD: Tethyan Copper Company asked a D.C. federal court to confirm a damages award of more than $4 billion issued against Pakistan in a dispute over the denial of a mining lease in the country.
Tethyan Copper Company, which is jointly owned by Canada’s Barrick Gold Corporation and Chile’s Antofagasta PLC, said the $4.09 billion award was issued by an International Centre for Settlement of Investment Disputes tribunal in July, following proceedings stemming from an alleged breach of the Australia-Pakistan bilateral investment treaty.
The Australia-incorporated TCC said that it entered into a joint venture agreement with the government of Pakistan’s Balochistan province to explore for copper and gold deposits with the expectation of being granted a mining lease.
But in 2011, the provincial government denied the application for a lease to the Reko Diq mine, located in a remote area of the province. A request for arbitration was filed by TCC that same year.
The ICSID tribunal previously reached a decision on jurisdiction and liability in 2017, but did not rule on the amount of compensation owed by Pakistan until July 12. In the liability decision, the tribunal found that Pakistan had breached its treaty obligations by not giving “fair and equitable treatment to TCC’s investments” and “effectively expropriating the value of TCC’s investment,” among other violations, according to the petition.
The 2017 decision outlined that TCC had spent approximately $240 million on exploration of the copper deposits and a feasibility study for the mine. According to TCC, the tribunal found “that Balochistan had rejected its application on pretextual grounds with the motive of implementing its own mining project and taking the value of TCC’s investment for itself.”
“The tribunal concluded that the denial of TCC’s mining lease application deprived TCC of the entire value of its investment and thus constituted an unlawful expropriation of TCC’s investment,” the petition says.
The company wants the court to confirm the award under the ICSID Convention. In addition to the compensation, the tribunal ordered Pakistan to pay “pre-award interest from November 15, 2011 until July 12, 2019 at a rate corresponding to the U.S. prime rate plus one percent, compounded annually,” along with post-judgment interest and a total of $61.9 million in arbitration costs and legal fees, according to the text of the award.
A representative for the Pakistani government could not immediately be reached for comment Monday. Representatives for TCC did not respond to requests for comment.
Tethyan Copper is represented by Matthew D. McGill, Matthew S. Rozen, Katherine Maddox Davis, Robert Weigel and Jason Myatt of Gibson Dunn & Crutcher LLP