Iran may drag Pakistan to arbitration court for delay in pipeline construction: Report

Prime Minister Shehbaz Sharif has been informed that Iran has the right to take Pakistan to the Court of Arbitration under French law if the IP (Iran-Pakistan) petrol line project is not finished by February or March 2024, sources quoted by The News International said.

Prime Minister Shehbaz Sharif has been informed that Iran has the right to take Pakistan to the Court of Arbitration under French law if the IP (Iran-Pakistan) petrol line project is not finished by February or March 2024, sources quoted by The News International said. The News International first broke the story under the headline in its issue from January 31, 2023, "Iran dangles the threat of penalty of USD 18 billion over IP gas line project." The story revealed that Iran had given Pakistan notice to construct a portion of the Iran-Pakistan petrol line on its territory by February or March 2024 or face a USD 18 billion fine.

In response to the news story, Prime Minister Shehbaz Sharif constituted a committee on January 31, 2023, at a high-level meeting to resolve the Iranian nuclear problem in light of US sanctions, under the leadership of SAPM on Foreign Affairs Syed Tariq Fatemi. "Under the new scenario, the committee has submitted its recommendations to the prime minister with a focus to keep Iran engaged and extend assurances that Pakistan is very committed to the project as it is a sovereign obligation of the country," said top sources, as cited by The News International.

However, they declined to disclose specific recommendations, citing diplomatic sensitivities and the country's greater interests in delaying public disclosure of the recommendations. But, according to the officials, because the Gas Sales Purchase Agreement (GSPA) was signed between the two countries in accordance with French law, Iran has the right to take Pakistan to arbitration court before February 2024. The officials also added that Pakistan also urgently needs to start a significant diplomatic initiative to engage top American officials in Washington to request a waiver to implement the project. However, initial communications between senior representatives of the Petroleum Division and the US ambassador in Pakistan resulted in no reaction from the latter. On the other hand, India had managed a waiver from the US sanctions and continues to import POL products from Iran, The News International reported. (ANI)

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