“The consequence is what we are witnessing; identical claim is made before ICSID along with one in ICC. This issue is required to be considered by the Federal Government before signing any further BITs …”
“Above are the reasons in support of the short order passed by this Court, by which the titled CPLA was converted into appeal, and the appeal as well as the Constitution Petitions under Article 184(3) of the Constitution were allowed with costs throughout whereas the Miscellaneous Applications were disposed of. In consequence, the Chagai Hills Exploration Joint Venture Agreement dated 23.07.1993 was held to have been executed contrary to the provisions of the Mineral Development Act, 1948, the Mining Concession Rules, 1970 framed thereunder, the Contract Act, 1872, the Transfer of Property Act, 1882, etc., which was even otherwise not valid, therefore, the same was declared to be illegal, void and non est. In pursuance of the above declaration, Addendum No. 1 dated 04.03.2000, Option Agreement dated 28.04.2000, Alliance Agreement dated 03.04.2002 and Novation Agreement dated 01.04.2006, which were based upon, and emanated from, CHEJVA were also held to be illegal and void. It was further held that all those instruments did not confer any right on BHP, MINCOR, TCC, TCCP, Antofagasta or Barrick Gold in respect of the matters covered therein. It was lastly held that [exploration licence] EL-5 was tantamount to exploration contrary to rules and regulations as the claim of TCCP was based on CHEJVA, which document itself had been held to be non est. Therefore, before exploration it was incumbent upon it to have sought rectification of its legal status.”
“Section 2 of the [Mineral Development] Act of 1948 provides that the appropriate Government shall have the power to make rules to provide for all or any of the matters stated therein. BMCR 1970 were framed in exercise of the power conferred by section 2 …”
“… Various recitals in CHEJVA, Addendum, Novation Agreement, Mincor Option, Alliance Agreement, all have purported to bind the Government and its functionaries in the discharge of their statutory duties, which is not permissible. This aspect too is opposed to public policy in terms of section 23 of the Contract Act, 1872. Accordingly, all the said instruments are void and not enforceable in the courts of law.” (paragraph [47]) (In the course of his argument before this Court, Mr Hancock QC drew attention to one of a number of illustrations that are included insection 23 of the Contract Act 1872 of Pakistan. This illustration (f) is in these terms: “A promises to obtain for B an employment in the public service, and B promises to pay 1000 rupees to A. The agreement is void, as the consideration for it is unlawful.”
“The law of Pakistan being the law applicable to the agreement, the Courts of Pakistan are the appropriate forum to decide the legality of CHEJVA. … Learned counsel for [the Government of Balochistan] stated that in this regard [the Government of Balochistan] and the Government of Pakistan have respectively put both the ICC and ICSID on notice vide respondent’s Answer to the Claimant's Request for Arbitration and Counterclaim dated 16.11.2012 that matter of CHEJVA is pending before the Supreme Court of Pakistan in the following words: “2. Matters relating to the enforceability, validity and vires of CHEJVA the addendum of 2000 and the novation of 2006 (“the joint venture contract”) are pending before the Supreme Court of Pakistan .... The Claimant, its Pakistani subsidiary and its parent companies are before the Supreme Court of Pakistan and before were present before the Balochistan High Court. In excess of 50 applications have been filed and are pending before the Supreme Court. It is plain that only the Supreme Court of Pakistan has the jurisdiction to decide on the validity of the joint venture contract and no tribunal has the authority or power to usurp such jurisdiction. Therefore, this Tribunal should suspend any further proceedings in this arbitration until such time the Supreme Court of Pakistan determines the validity, legality and vires of CHEJVA. “2. Matters relating to the enforceability, validity and vires of CHEJVA the addendum of 2000 and the novation of 2006 (“the joint venture contract”) are pending before the Supreme Court of Pakistan .... The Claimant, its Pakistani subsidiary and its parent companies are before the Supreme Court of Pakistan and before were present before the Balochistan High Court. In excess of 50 applications have been filed and are pending before the Supreme Court. It is plain that only the Supreme Court of Pakistan has the jurisdiction to decide on the validity of the joint venture contract and no tribunal has the authority or power to usurp such jurisdiction. Therefore, this Tribunal should suspend any further proceedings in this arbitration until such time the Supreme Court of Pakistan determines the validity, legality and vires of CHEJVA. 3. During the Course of the Supreme Court proceedings allegations of corruption have been raised. It is the Supreme Court of Pakistan which is the appropriate forum for determining whether corruption is a factor in this matter before it and then take appropriate decisions. In this regard, Article 34 of the UN Convention on Corruption allows the Supreme Court, in part being the sub-set of the State to continue with pending legal proceedings.”
“… a foreign investor cannot seek to benefit from an investment effectuated by means of one of several illegal acts and, consequently, enjoy the protection granted by the host State, such as access to international arbitration to resolve disputes, because it is evident that its act had a fraudulent origin and, as provided by the legal maxim, “nobody can benefit from his own fraud”
“… which was even otherwise not valid,”
“73. Loss of right to object (1) If a party to arbitral proceedings takes part, or continues to take part, in the proceedings without making, either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of this Part, any objection— (a) that the tribunal lacks substantive jurisdiction, (b) that the proceedings have been improperly conducted, (c) that there has been a failure to comply with the arbitration agreement or with any provision of this Part, or (d) that there has been any other irregularity affecting the tribunal or the proceedings, he may not raise that objection later, before the tribunal or the court, unless he shows that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection”. (1) If a party to arbitral proceedings takes part, or continues to take part, in the proceedings without making, either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of this Part, any objection— (a) that the tribunal lacks substantive jurisdiction, (b) that the proceedings have been improperly conducted, (c) that there has been a failure to comply with the arbitration agreement or with any provision of this Part, or (d) that there has been any other irregularity affecting the tribunal or the proceedings, he may not raise that objection later, before the tribunal or the court, unless he shows that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection”
“The effect of section 73 is that an objection to a serious irregularity may not be raised by a party after participating in the proceedings without taking the objection, unless that party can show that at the time of participation the grounds for the objection were not known to him and he could not with reasonable diligence have discovered them. The approach to this section appears from the decision of Moore-Bick J in Rustal v Gill & Duffus [2000] 1 LLR 14 at page 20-21. If the respondent can show that the applicant took part in or continued to take part in the arbitration proceedings without objection, after the grounds of objection arose, the burden passes to the applicant to show that he did not know and could not with reasonable diligence have discovered those grounds at the time. Moreover, the expression ‘continues to take part in the proceedings’ in section 73 is broadly worded and is designed to ensure that a party who believes he has grounds for objecting on the basis of serious irregularity should raise that objection as soon as he is, or reasonably ought to be, aware of it. He is not permitted to allow the proceedings to continue without alerting the Tribunal and the other party to a serious irregularity, which, in his view, renders the whole arbitral process invalid. As Moore-Bick J points out, this is not only to avoid a waste of time and expense but is based upon a more fundamental point of fairness and justice. It cannot be right for a party to participate in proceedings, which he believes to be fundamentally irregular, with the intention of taking advantage of any decision in his favour, whilst keeping up his sleeve an objection to an irregularity, which he will only produce in the event of an unfavourable decision.”
“59. It is clear that the intention behind section 73 is to ensure that a party objecting to jurisdiction, who has decided to take part in the arbitral proceedings, should bring forward his objections in those proceedings before the arbitrators. He should not hold them in reserve for a challenge to jurisdiction in the court. I agree with Colman J that this intention reflects a principle of ‘openness and fair dealing’ between parties who may, or may not, be bound by an arbitration clause. I also agree with Colman J, therefore, that to fulfil this intention and to accord with that principle, the words ‘any objection’ and ‘that objection’ in section 73 must mean ‘any ground of objection’ and ‘that ground of objection’. 60. But what does that phrase cover? I think that it is wrong to be prescriptive or try to lay down precise limits in the abstract. It is usually easy to recognise in particular cases whether a party is attempting to raise a new ground of objection to jurisdiction on an appeal. It was obvious in the National Basketball Association case and the Zestafoni case. Take this case: in my view Primetrade raised two "grounds of objection" to the arbitrators' jurisdiction. They are: that Primetrade was not a holder of the bills of lading at any relevant time; and that it did not make a claim against the Owners; therefore it is not bound by the arbitration clause. 61. Primetrade raises the same two grounds of objection on this appeal. I accept that it raises different and broader arguments on the first ground. But in my view all those arguments are within the same ‘ground of objection’ to the jurisdiction of the arbitrators. The argument that no right of suit is transferred to Primetrade even if it became a ‘holder’ of the bills under section 5(2)(c) is, in my view, within that first ground. … 112. For convenience I summarise my conclusions: (1) On the proper interpretation ofsection 73(1) of the Arbitration Act 1996 , an appellant undersection 67 of the Act is entitled to argue any point coming within the existing ‘grounds of objection’ to the jurisdiction that were raised before the arbitrators. The ‘grounds of objection’ should not be examined closely as if a pleading, but broadly. In this case all the arguments which the appellants wish to advance on the appeal are within the two grounds of objection to jurisdiction advanced before the arbitrators. …”
“86. In order to decide whether a new ground of objection is being raised “the ‘grounds of objection’ should not be examined closely as if a pleading, but broadly” – per Aikens J in Primetrade at [112]. The fact that it raises different and broader arguments or new evidence does not mean that it is a new ground – ibid at [61]-[62]. 87. Adopting a broad approach I agree with Habas that in the circumstances of this case its arguments on actual and ostensible authority based on Turkish law falls within the ground of objection based on lack of authority made at the arbitration. However, as Habas itself stressed in oral argument, its objection based on failure to comply with the formal requirements for an arbitration agreement under Turkish law has nothing to do with authority. It derives from the Turkish International Arbitration Act and Code of Obligations. In my judgment this is a new ground of objection and as such is not open to Habas on its application by reason of section 73 of the 1996 Act.”
“… . The parties are entitled to know the specific grounds which are to be advanced in a challenge to an arbitration award not only because they must know the case to be met but also because they should know the extent to which what would otherwise be a valid award is challenged. One of the objectives of arbitral proceedings is to achieve the speedy determination of disputes. It is accordingly very important that time requirements prescribed by the Act are strictly complied with and only allowed to be departed from in exceptional cases. No reasonable excuse has been proffered to the court for the failure to plead the grounds now sought to be introduced at the time the Arbitration Claim Form was issued. …”
“I remind myself at the outset of the broad policy in play, as identified in Primetrade AG v Ythan Ltd (“the Ythan”) …[2006] 1 All ER 367 . As Moore-Bick J said in Rustal Trading v Gill & Duffus SA[2000] 1 Lloyd's Rep 14 (at paragraph 19), s.73(1) is designed to ensure that if a person believes he has grounds for objecting to the constitution of the tribunal or the conduct of the proceedings, he raises those objections as soon as he is aware of them or ought to be aware of them. It would be unfair if he took part in arbitration yet kept an objection up his sleeve and only attempted to deploy it later.”
“61. It was argued that the objection now raised was not a new ground of objection but merely an argument in support of the existing ground of objection. I was referred to the decision of Aikens J in Primetrade AG v Ythan Ltd[2006] 1 All ER 367 , paras 54-60. At para 59, he stated that the intention behind section 73 was to ensure that a party which objected to jurisdiction but who had decided to take part in the arbitration proceedings, should bring forward his objections in those proceedings before the arbitrators and not hold them in reserve for a challenge to jurisdiction in the court. At para 60 he said that it was wrong to be prescriptive or to try to lay down precise limits in the abstract as to what was meant by an objection which meant a “ground of objection”. “It is usually easy to recognise in particular cases whether a party is attempting to raise a new ground of objection to jurisdiction on an appeal.”
“… whilst the court has resisted the temptation to lay down precise limits in the abstract, the court will investigate whether the party is attempting to raise a new “objection”
“(i) that the arbitration agreement in the CHEJVA was void as a result of [the Judgment of the Supreme Court of Pakistan] (which created an issue estoppel and/or had binding effect as a matter of Pakistani law); (ii) that TCCA did not have standing to bring the claim because it had divested its rights under the CHEJVA in favour of its Pakistani subsidiary, TCCP; (iii) that [the Province of Balochistan] was not a party to the CHEJVA and could not therefore be a party to the arbitration agreement; and (iv) that the ICC Tribunal lacked jurisdiction to deal with TCCA’s extra-contractual claims.”
“1. We write to request the ICC Court of Arbitration to exercise its power under Article 6.2 of the 1998 ICC Arbitration Rules to stop this arbitration from proceeding as any tribunal that may be constituted to hear this matter cannot have any jurisdiction. 2. The Request for Arbitration invokes Clause 15.4 of the Chagai Hills Exploration Joint Venture Agreement (“CHEJVA”) dated29 July 1993 , as amended by Addendum No. 1 dated04 March 2000 (“the Addendum”) and a Novation Agreement dated01 April 2006 (“the Novation Agreement”) (together “the Joint Venture Agreements”). The entire premise of [TCCA’s] Request for Arbitration rests on challenging the denial of a mining lease application made to the Directorate General of Mines and Minerals (“the Licensing Authority”) under theBalochistan Mining Rules 2002 (“theBMR Rules 2002 ”). Clause 16 of the CHEJVA provides that the applicable law is the “law of Pakistan which the Parties acknowledge and agree includes the principles of international law.” 3. [TCCA] alleges that it has a right to be issued a mining lease by the Licensing Authority under the Joint Venture Agreements entered into with the Governor of Balochistan. The Governor of Balochistan cannot bind the Licensing Authority to give a particular decision. The Licensing Authority, which is the sole authority that can grant mining leases in the province of Balochistan, is not a party to the Joint Venture Agreements. No government entity, including the Governor of Balochistan, except the Licensing Authority has the power to grant mining leases under theBMR Rules 2002 . This power is vested with the Technical Head of the Directorate General of Mines and Minerals under Rule 2(z) of theBMR Rules 2002 . 4. An ICC arbitration panel constituted pursuant to the Joint Venture Agreements certainly does not have the jurisdiction to hear a claim challenging the decision of the Licensing Authority made under theBMR Rules 2002 . [TCCA’s] claim does not rest in contract and cannot be the subject of these ICC arbitration proceedings. If [TCCA] wishes to consider claims against the Licensing Authority’s decision, a procedure is set out in theBMR Rules 2002 , which we believe it is exercising. It is understood that [TCCA] made an application in the nature of an appeal under Rule 70 of the BMR 2002 on the 28th of November, 2011 which is still pending with the Secretary Mines and Minerals Development Department, Government of Balochistan. Ultimately, this is a case of judicial review for the courts of Pakistan to decide, and one that cannot be arbitrated at the ICC. … 10. It is also widely believed that the Joint Venture Agreements are tainted by corruption. The issues of procedural impropriety and corruption relating to the procurement and operation of the Joint Venture Agreements are the subject of ongoing proceedings in the Supreme Court of Pakistan in which both the Claimant and the Respondent are parties. In this regard, CPLA No. 796 of 2007, Constitution Petition No. 68 and No. 69 of 2010 and No.1 and No. 4 of 2011, Crim. Org. Petition No. 1 of 2011 and Human Rights Case No. 53771-P/2010 are pending before the Honourable Supreme Court. 11.The fact that the Joint Venture Agreements were made in flagrant violation of Pakistani law is also indicative of the corruption at work. The official who was intimately involved with the conclusion of the agreement has been later convicted for 7 years imprisonment on corruption charges for collecting assets beyond means. Some learned judges, including the Chief Justice of Pakistan, made pointed comments in open court about the allegations of corruption surrounding the Joint Venture Agreements in the Supreme Court proceedings. … 17. It is a well-established principle that contracts procured by corrupt practices and trading in influence are unenforceable as a matter of international public policy. This is also the case under Pakistani law, the governing law of the Joint Venture Agreements. The recent law evolved in Pakistan by the Supreme Court of Pakistan demonstrates that procedural irregularities in themselves can be sufficient basis to infer corruption even if there is no overt act of corruption detectable on the surface. There is ample authority to indicate that contracts that have been the result of illegality and/or corruption have led to the international arbitral tribunals declining jurisdiction. 18. For any and all of the above reasons, there is no contractual or statutory basis for an ICC arbitral tribunal to hear this hopeless claim as it falls well beyond the validity and scope of any arbitration agreement. The Supreme Court of Pakistan is seized of the matter and it is for that Court to make the relevant ruling on the legality of the Joint Venture Agreements. It is also the relevant forum to review the Licensing Authority’s decision to refuse the mining lease application of [TCCA]. 19. The ICC Court of Arbitration must decline this Request for Arbitration as it is self-evident that there is no jurisdiction. The entire premise of [TCCA’s] request is flawed as it alleges that it was promised the grant of a mining lease by the Governor of Balochistan. Such a promise, even if it did exist, is unenforceable and void ab initio under the governing law. 20. If the ICC Court of Arbitration is unable to make a decision on the basis of this letter, [the Province of Balochistan] can provide further information or documentation. If the ICC Court of Arbitration still finds that its powers do not allow it to decline jurisdiction at this stage, it should instruct the arbitral tribunal to decide the objections in this letter as soon as possible as a threshold matter. 21. [The Province] reserves its rights to raise additional objections, including those relating to the locus standi of [TCCA], jurisdiction and/or admissibility of the claim. These include objections on the ground that [TCCA’s] Request for Arbitration was filed at the ICC in violation of the procedures set out in the Joint Venture Agreements.”
“Arbitral institutions should proceed with care and prudence in allowing arbitrations under their auspices in circumstances where the highest court of a major Sovereign State is clearly seized of the matter, particularly where the issues raised are of vital public interest. … What [TCCA] really wants is a review of the Licensing Authority’s decision to reject the application for a Mining Lease to a subsidiary company which is not a party to any agreement with the Government of Balochistan. … Neither is the Licensing Authority a party to this arbitration.”
“3. [TCCA] seeks provisional measures from both the ICSID and ICC tribunals to restrain the Government from developing the RekoDiq Mining Area either by itself or with third parties. It does so, even though it has never held any title in its own right to the RekoDiq Mining Area. The exploration licence EL-5, which included the RekoDiq Mining Area, was held by the "TCCP-BDA Chagai Hills Exploration Joint Venture" and not [TCCA]. Under Article 1.1 of the joint venture contract, this licence was the property of the joint venture and not the individual contracting parties. EL-5 expired on19th February 2012 and no further renewal was possible under the Balochistan Mineral Rules. In effect, [TCCA] is applying to preserve non-existent rights to territory that belongs to the Government of Balochistan. 4. The joint venture contract [TCCA] relies upon to claim a right to mine the RekoDiq Mining Area is seriously tainted by a strong suspicion of corruption. The joint venture contract is the 1993 Chagai Hills Exploration Joint Venture Agreement (the "CHEJVA"), amended in 2000, and novated in favour of the [TCCA] in 2006. The person who signed the 1993 CHEJVA on behalf of the BDA was subsequently convicted of corruption. Serious questions of irregularities and illegality have been raised by public interest petitions in various applications to the Supreme Court of Pakistan since 2007. As has subsequently emerged, the order passed by the High Court of Balochistan upon which [TCCA] relies as giving it a clean bill of health did not take into account all of the above facts. … VIII. OBJECTIONS TO JURISDICTION 60. Finally, these submissions are made without prejudice to the [Province of Balochistan's] position on a series of important jurisdictional issues. First, the matters in dispute are before the Supreme Court of Pakistan and are sub judice. Thus, for example, the Supreme Court of Pakistan will decide on the validity or invalidity of the relevant joint venture contracts and will look at such public interest issues as it considers appropriate. Secondly, the Supreme Court will state the law of Pakistan definitively with respect to the interpretation of those contracts and the application of the relevant legislation. … 61. Thirdly, there are other jurisdictional issues which will fall to be decided in due course, but are sufficiently obvious as to lead to the conclusion that this Tribunal should not order provisional measures in circumstances where it may well make a finding that it has no jurisdiction. This would be so, for example, if the contract was void ab initio for corruption or was ultra vires under Pakistan law. 62. Finally, both [TCCA] and the Government are parties to the public interest litigation in the Supreme Court of Pakistan and have complied with the orders and directions of that Court. In fact, the Supreme Court of Pakistan oversaw the Claimant's mining lease application. It has never been suggested, nor could it be, that the conduct of the Supreme Court is in any way an abuse of process or a denial of justice. 63. The Government maintains its objections to the jurisdiction of this Tribunal. These were set out in the Government's letter to the ICC of06 February 2012 [sic]. The parties have exchanged correspondence on these objections. These objections were made before [TCCA's] request for interim measures and ought to be decided before the Tribunal decides [TCCA's] application. The Government requests that the Tribunal, after hearing the parties on4th December 2012 , rules upon the matter of its own jurisdiction before it decides [TCCA’s] application for interim measures.”
“The person who signed the CHEJVA was later sentenced for corruption for … beyond means offence in Pakistan … he has just completed his sentence” and no allegations were advanced linking this to the CHEJVA. The Province of Balochistan made no jurisdictional objection based on corruption allegations. For TCCA, Mr Donovan stated to the ICC tribunal: “I do want to suggest, though, that to the extent that there is any suggestions that appeared in the papers here that there is any corruption involved in this case ‐‐ and there are obviously extremely distinguished members of the Pakistani and English bar in front of the tribunal on the other side, but they have been very careful to frame their suggestions as there may be questions, there is no an iota of suggestion, nothing.”
“15. On January 27, 2012, the Government requested the ICC not to proceed with the arbitration pursuant to Article 6(2) of the ICC Rules. 16. The reasons included these: (a) the Governor of Balochistan cannot bind the Directorate General of Mines as the Licensing Authority to grant a Mining Lease; (b) the Tribunal would not have jurisdiction to hear a claim challenging the refusal of a lease; (c) if the Governor of Balochistan guaranteed or promised the grant of a lease, the agreement would be unenforceable and void, and ultra vires; (d) the CHEJVA was tainted by corruption; (e) there were proceedings relating to the validity of the CHEJVA pending before the Supreme Court of Pakistan, which was the final authority on all questions of Pakistani law. … 60. … The Government’s objections to jurisdiction included grounds in addition to those indicated in its letter of27 January 2012 . … 61. In the course of this application, the Government has made these points on the merits of the claim (inter alia): (1) TCCA's application for a Mining Lease in February 2011 was in breach of the CHEJVA, and failed to meet the requirements for the grant of a Mining Lease pursuant to the BMR; (2) Article 5.9 provides for "the right to apply for a Mining Lease" and does not contain a right to be granted a Mining Lease, and the Government was not obliged to procure a Mining Lease under the CHEJVA; (3) even if Article 11.8.2 entitled TCCA to a Mining Lease, this would be in relation to a "mine" or a single mineral deposit in accordance with the provisions of and procedure set out in the CHEJVA, and not to at least 14 mineral deposits of substantial value contained in the Reko Diq Mining Area; (4) TCCA's Feasibility Study related to only two mineral deposits at H14 and H15 (which cover an area of 6 sq km); (5) TCCA did not commission feasibility studies for the other deposits, nor did it offer the Government any opportunity to develop those deposits; (6) TCCA unilaterally submitted an application for the entire 99.473 sq km in breach of the CHEJVA; (7) TCCA attempts in breach of law to bind the Licensing Authority's broad statutory discretion to refuse a Mining Lease application if it believes that this would not be in the interests of the development of the mineral resources of Balochistan; (8) Licence EL-5 was held by the Joint Venture and not by TCCA; (9) Licence EL-5 expired on February 19, 2011 and no further renewal was possible under the BMR; (10) in effect, TCCA is applying to preserve non-existent rights to territory that belongs to the Government; (11) the CHEJVA is seriously tainted by a strong suspicion of corruption: the person who signed the 1993 CHEJVA on behalf of the BDA was subsequently convicted of corruption, and serious questions of irregularities and illegality have been raised by public interest petitions in various applications to the Supreme Court of Pakistan since 2007; and (12) the Supreme Court of Pakistan has been seised of the fundamental questions concerning the validity and legality of the CHEJVA, and it is for the Supreme Court of Pakistan also to consider the meaning and effect of the BMR and whether to follow the principle that the Government's discretion in granting a mining title cannot be curtailed by contract: Cudgen Rutile (No.2) Pty Ltd v Chalk[1975] AC 520 . … 87. It would appear that the Government’s position now is that the CHEJVA is governed by the law of Pakistan and that the effect of the order of the Supreme Court of Pakistan is that the arbitration agreement in the CHEJVA is null and void and that the Tribunal is therefore deprived of jurisdiction. … 88. … It is well established that an arbitration agreement is severable from the contract of which it forms a part, and may be governed by a different law. It is not necessary to express a view on the question at this stage prior to any formal challenge to the Tribunal's jurisdiction by the Government, but it is arguable that the arbitration agreement is governed by English law on the basis that it has the closest connection with English law as the seat of the arbitration envisaged by the arbitration agreement in clause 15.4.3(a). Secondly, even if the arbitration agreement is governed by the same law as the CHEJVA, it is arguable that the reference to international law in clause 15.4.4 and clause 16 has the result that the CHEJVA is governed by international law and that the validity of the arbitration agreement is therefore unaffected by the ruling of the Supreme Court [of Pakistan] that the CHEJVA is null and void under the law of Pakistan. Accordingly the Tribunal is of the view that it retains prima facie jurisdiction pending the resolution of the Government's challenge to its jurisdiction. … Ruling 138. For the reasons given above the Tribunal considers that TCCA has not made out the conditions for the grant of interim relief.”
“1. The Government of Balochistan ("the Government" or "the Respondent") requests that the preliminary jurisdictional and admissibility objections set out below are heard before this arbitration proceeds to the merits. The Tribunal's power to hear these objections on a preliminary basis is set out in paragraph 52 of the Terms of Reference. 2. Firstly, this Tribunal must consider the impact of the [Supreme Court’s] judgment…on its jurisdiction and the admissibility of the claims before it. The [Supreme Court] has declared that the contract – pursuant to which this arbitration arises – is “illegal void and non est” in its entirety. Pakistani law governs the CHEJVA, including the arbitration agreement contained therein. The Supreme Court's ruling, therefore, binds this Tribunal. The source of the Tribunal's jurisdiction is not an autonomous source, but derives from a contractual nexus between the parties. Once that nexus is declared finally and conclusively null and void, then all rights and obligations under it, including the jurisdiction of this Tribunal, fall away. The Tribunal has no inherent jurisdiction of its own independent of the contract. … 26. The [Supreme Court] found that the CHEJVA was illegal void and non est on a number of grounds including the fact that officials involved in its conclusion violated their public duties under Pakistani law and were induced into giving undue advantages and benefits to [TCCA’s] predecessor related to the CHEJVA. These findings are firmly in line with current international law and policy on anti-corruption. 27. Tellingly, the Supreme Court also held that the CHEJVA is “illegal void and non est” in its entirety: “As all the key provisions of the CHEJVA were made subject to a reliance on relaxations that were illegal and void ab initio, the illegality of the agreement seeps to its root. …” 28. … [T]he arbitration agreement is governed by Pakistani law. The Pakistan Supreme Court has determined that no part of the CHEJVA can be saved as the agreement is void ab initio, non existent and the illegality “seeps to the root[s]” of the CHEJVA. This determination of Pakistani Law by the Pakistan Supreme Court is not open to scrutiny by this Tribunal, nor can this Tribunal substitute its own finding for that of the Supreme Court. … 31. … [I]t is important to note that this jurisdictional objection is not based on a claim or allegation of voidness/illegality of the agreement, but rather a finding of voidness / illegality by a court of competent jurisdiction. … 32. For the record, the Government submits that this Tribunal could not "uphold the validity of the arbitration agreement" even if it were governed by English law. Since (a) the underlying contract terms are governed by Pakistani law, and (b) the Pakistani Supreme Court has held that the underlying contract, including the arbitration agreement, is void ab initio for illegality. First, the illegality in this case is "palpable"; it is not contested. Second, the illegality directly impeaches the arbitration agreement [at footnote 20, the Province of Balochistan distinguished Fiona Trust “on the grounds that the “bribery” in that case did not entail the invalidity of the arbitration agreement, whereas the Province of Balochistan submission was that it did in its case”]. Third, the nature of the illegality is such that due to public policy reasons it would be unenforceable under English law and international public policy. Any award rendered by a Tribunal assuming jurisdiction under an unenforceable arbitration agreement (i.e. an arbitration agreement tainted by illegality) would be denied recognition and enforcement. … 49. The findings of the Pakistani Supreme Court and the Tribunal's obvious lack of jurisdiction over the parties to, and subject matter of, this dispute warrant urgent upfront consideration. … 51. In the exercise of its undoubted right to determine its own jurisdiction, the Government submits that the Tribunal will be compelled to find that it has no jurisdiction to hear this case. If the Tribunal accepts that the governing law of the arbitration agreement is Pakistani law, then the Supreme Court's finding that the arbitration agreement like the rest of the CHEJVA is void and tainted with illegality is dispositive of the matter. If the Tribunal takes the view that English law governs the arbitration agreement, the arbitration agreement is in any event unenforceable due to the illegality of the underlying terms of the CHEJVA. In this case, the illegality directly impeaches the arbitration agreement itself.” “As all the key provisions of the CHEJVA were made subject to a reliance on relaxations that were illegal and void ab initio, the illegality of the agreement seeps to its root. …”
“Balochistan argues that this Tribunal lacks jurisdiction, either because it is bound to accept the Pakistan Supreme Court’s judgment purporting to invalidate all provisions in the CHEJVA, including the arbitration clause, or because the Supreme Court’s conclusion that the entire contract is illegal necessarily renders the arbitration clause unenforceable. … … Balochistan’s theory confirms that the Tribunal would have to weigh the same evidence and consider the same legal arguments when assessing the validity of both the arbitration clause and the other CHEJVA provisions underlying TCCA’s claims on the merits, including: (i) alleged “irregularities and corruption” surrounding the conclusion of the CHEJVA, (ii) the authority, under Pakistani law and in the factual circumstances, of the persons signing the CHEJVA and related agreements on behalf of Balochistan, and (iii) the effect of the alleged invalidity of the CHEJVA on later agreements that expressly reaffirmed its provisions, including the arbitration clause.”
“30. “The claimant’s position:… the respondent’s objection that there is no valid arbitration agreement rests entirely on its position that the CHEJVA as a whole is invalid, and it has asserted no separate basis for its contentions that the claimant’s claims are inadmissible….the Tribunal would have to weigh the same evidence and consider the same legal arguments when assessing the validity of both the arbitration clause and the other CHEJVA provisions underlying the claimant’s claims on the merits, including: (i) alleged irregularities and corruption surrounding the conclusion of the CHEJVA; (ii) the authority, under Pakistani law and in the factual circumstances, of the persons signing the CHEJVA and related agreements on behalf of the respondent; and (iii) the effect of the alleged invalidity of the CHEJVA on later agreements which expressly reaffirmed its provisions, including the arbitration clause. … 41. The first main basis of [the Province’s] claim that the Tribunal has no jurisdiction is that the CHEJVA and the associate[d] [sic] contracts are invalid by reason of, and for the reasons given by, the Supreme Court of Pakistan. … 43. So also is the second main submission of the respondent closely entwined with the merits. [The Province’s] position is that the BDA was not authorized to enter into the CHEJVA on behalf of [the Province] and that neither the respondent nor the Licensing Authority is party to the CHEJVA….”
“The said record [the entire record relating to CHEJVA] was retrieved and filed through several applications. It made shocking disclosures of extensive irregularities and corruption. … 313. The Supreme Court found that the CHEJVA was illegal, void and non est on a number of grounds including the fact that the officials involved in its conclusion violated their public duties under Pakistani law and were induced into giving undue advantages and benefits to the Claimant’s predecessor relating to the CHEJVA. Furthermore, as discussed above, the Supreme Court found that the CHEJVA’s object was unlawful as it was an attempt to contravene the provisions of Pakistani law, including theConstitution of Pakistan, the Mines Act 1948 and the 1970 BM Rules. Pursuant toSection 23 of the Pakistani Contract Act 1872 contracts with such unlawful objectives are void. 314. The preclusive effect of the Supreme Court’s judgment is complete. The Court held that the CHEJVA is “illegal, void and non est” in its entirety… 315. The scope of this finding by the Supreme Court means that the arbitration agreement in the CHEJVA, which is governed by Pakistani law, cannot be saved. It, individually, is illegal and of no effect under its governing law. This determination of Pakistani Law by the Pakistan Supreme Court is not open to scrutiny by this Tribunal, nor can this Tribunal substitute its own finding for that of the Supreme Court. 316. It is important to emphasise that this jurisdictional objection is not based on a claim or allegation that the CHEJVA is void and illegal. Rather it is based on an express finding that the CHEJVA is void illegal [sic] by the most senior court of competent jurisdiction. … 319. The Tribunal would be bound to accept that it could not “uphold the validity of the arbitration agreement” even if the arbitration agreement were governed by English law. This is so for three reasons. First, the illegality in this case is “palpable”; it is not contested. Second, the illegality directly impeaches the arbitration agreement. Third, the nature of the illegality is such that due to public policy reasons it would be unenforceable under English law and international public policy. Any award rendered by a Tribunal assuming jurisdiction under an unenforceable arbitration agreement (i.e. an arbitration agreement tainted by illegality) would be denied recognition and enforcement. 320. However, there are additional reasons, under Pakistani law, why the CHEJVA Agreements are illegal and void. First, the Respondent could not have entered into a joint venture agreement because thePakistan Mines Act 1948 , the legislative instrument under which the 1970 BM Rules were promulgated, did not allow provide for the execution of agreements, but only for the promulgation of rules. Therefore, the Rules already occupied the subject of regulating the mines and minerals in Balochistan. This concept of an occupied field is well known in Pakistani law, and its effect is to render illegal and void any entry by the Respondent into a contract such as the CHEJVA. 321. Second, the fact is that the Respondent is not a party to CHEJVA. The Respondent never appointed the BDA or any of its officials to act as its agents for executing the CHEJVA. The Claimant’s assumption that the Respondent was party to the CHEJVA is a critical mistake of fact. As a result, the CHEJVA is also void on account ofSection 20 of the Contract Act 1872 , which says: “Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void.” 322. Third, the CHEJVA Agreements are also void because they are an effort to interfere with and curtail the discretion of a licensing authority. A licensing authority by its nature enjoys independence as it needs to consider the licencee’s application. The 2002 BM Rules codify this independence. Only the appellate body has the mandate to set aside the decision of the Licencing Authority. Any attempt by the CHEJVA Agreements, as construed by the Claimant, to curtail this discretion of the Licensing Authority is void. … 323. This principle has been applied in Pakistani courts, including in the Balochistan High Court when it declared that the Chief Minister had no executive power to interfere with matters regulated by the Balochistan mining code. It is plain that, if the CHEJVA is considered by this Tribunal to grant a mining lease, which is denied by the Respondent, such contract would be illegal under Pakistani law. 324. Fourth, the CHEJVA Agreements suffer from uncertainty about the area which is the subject of any future mining rights. Although a general map covering 13 thousand square miles is annexed to the CHEJVA, clause 5.3.1 CHEJVA states that the aggregate prospecting area shall not be more than 50 square kilometres. The scope of the prospecting activities anticipated by the CHEJVA, along with the scope of any future mining activities, are inherently uncertain. Thus, on account of this uncertainty in respect of the area that is to be taken as subject matter of CHEJVA,Section 29 of the Contract Act renders it void. 325. For the foregoing reasons, the CHEJVA, the 2006 Novation Agreement and the arbitration agreements contained in each of those contracts are governed by Pakistani law, and are invalid as a result of the determinative finding to that effect by the Supreme Court of Pakistan (and would in any event be void by virtue of other aspects Pakistani contract law). The result is that the present Tribunal does not have jurisdiction under the CHEJVA Agreements to hear and decide the present dispute. The Tribunal must therefore decline jurisdiction.”
“… the issue of irregularities and corruption in relation to the CHEJVA Agreements is at the heart of the Supreme Court decision that the CHEJVA Agreements are illegal, void, ab-initio and non est under Pakistani law. The documents requested are relevant and material to establishing [whether bribes were paid]. Indeed, such document would in and of themselves strip this Tribunal of any jurisdiction to hear and decide the Claimant’s claims.”
“Some of the documents will be produced in the ICSID arbitration. The Supreme Court referred to corruption but did not invalidate the contracts on that basis, and [the Province] has not sought to make out an independent case on that basis. In any event the request is overly broad.”
“17. After comprehensively considering the matter, the Supreme Court provided a 149-page reasoned judgment addressing the many issues placed before it. That judgment determined that, as a matter of Pakistani law, inter alia: • [BMCR 1970] required that, in order for any relaxations of the Rules to be legal, both “hardship” and “special circumstances” had to be shown, and the reasons for any relaxations had to be recorded in writing. Since these tests were not met, the relaxations of the BM Rules of 1970 were ultra vires, void and ineffective. • Balochistan did not have the legal power to enter into the CHEJVA or related agreements in the manner in which it purportedly did. • All key provisions in the CHEJVA were subject to reliance on relaxations which were illegal and void ab initio, so the illegality of the agreement “seeps to its root”, and the principle of severability cannot save any part thereof. • Since the CHEJVA was void and illegal, so were the other related agreements.”
“E. ALTERNATIVELY, THE JUDGMENT OF THE PAKISTANI SUPREME COURT AMOUNTS TO A BINDING STATEMENT OF PAKISTANI LAW AS A MATTER OF PRECEDENT (2) The Pakistani Supreme Court did not err on the facts underlying its findings of invalidity…. (d) Whether the CHEJVA was obtained by corruption… 137. For the avoidance of doubt, Balochistan does not presently allege that the CHEJVA was obtained by corruption. Of course, corruption, given its nature, is difficult to prove. But Balochistan does not need to demonstrate corruption. 138. In some countries, at some times, corruption has been rare. Lawyers and courts operating in those circumstances can adopt regulations and conduct themselves on the basis that it is inherently unlikely that any particular public act is the result of corruption. In those circumstances, it is not surprising that strict proof is required of such an allegation (despite the difficulties inherent in obtaining such proof). 139. Regrettably, however, not all countries have been so fortunate at all times. Where there is a greater likelihood of corruption affecting public acts, the legal system can take a different view of the inherent probability of the involvement of corruption. Its public law may develop differently, in the light of this greater risk. 140. In Pakistan, the law provides that, if a public servant is found to have greater assets than can be the result of his salary or legally-acquired funds, and he is unable to prove the contrary, corruption is inferred, without the need to prove a particular bribe. It was under that provision that Mr Jaffar was convicted (the former chairman of the BDA who procured the conclusion of the CHEJVA). 141. In any event, this is the law of Pakistan, and the law on which the Supreme Court reached its decision. In such circumstances, the Supreme Court cannot be criticised for making the statements it did. There was certainly evidence available from which one might infer that corruption was involved (chiefly, of course, that we now know that Mr Jaffar was a corrupt individual, but also his conduct in relation to the conclusion of the CHEJVA). 142. However, whether or not the Supreme Court was right to refer to corruption is neither here nor there. As the Claimant has rightly accepted, and as the Tribunal has already found in this arbitration, the Supreme Court did not conclude that Balochistan did not have power to make the relaxations or enter into the illegal CHEJVA and related contracts as a result of corruption. Whether or not there was actually corruption is irrelevant to the binding force of the Supreme Court’s conclusions. … 311. As a matter of Pakistani law, the arbitration agreement is invalid. This is because: (a) The Supreme Court adjudged it to be invalid, and that constitutes a res judicata; and (b) The Supreme Court’s judgment is binding as a matter of Pakistani law. 312. The Supreme Court expressly held that the entirety of the CHEJVA was rendered null and void by the illegality. No provision, including the arbitration agreement, was capable of being saved by the principle of separability: “As all the key provisions of CHEJVA were made subject to a reliance on relaxations that were illegal and void ab initio, the illegality of the agreement seeps to its root. As such, no operative part of the agreement survives to be independently enforceable and the principle of severability cannot be applied to save any part thereof. The agreement is, therefore, void and unenforceable in its entirety under the law.” “As all the key provisions of CHEJVA were made subject to a reliance on relaxations that were illegal and void ab initio, the illegality of the agreement seeps to its root. As such, no operative part of the agreement survives to be independently enforceable and the principle of severability cannot be applied to save any part thereof. The agreement is, therefore, void and unenforceable in its entirety under the law.”
“ It is common ground thats.7 of the English Arbitration Act 1996 applies, so the invalidity of the CHEJVA (and related agreements) does not automatically lead to the invalidity of the arbitration agreement therein.”
“The officials involved in the conclusion of the CHEJVA violated their public duties under Pakistani law and were induced into giving undue advantages and benefits to TCCA’s predecessor relating to the CHEJVA. Once the Supreme Court had inspected “the entire record relating to CHEJVA”, it found that the record “made shocking disclosures of extensive irregularities and corruption.”
“The Supreme Court found that (1) the agreements were invalid by virtue of section 23 of the Contract Act because of unlawful relaxations of the BM Rules requirements; (2) the agreements were void by virtue of section 20 because of a mistake of fact, namely that the BDA was an agent for the Government and/or there had been unlawful relaxations; (3) the agreements were void for uncertainty under section 29 because the map annexed did not correlate with the CHEJVA.”
“Although the Supreme Court said (at para 116) that the record showed “extensive irregularities and corruption” it made no finding, and did not invalidate the Agreements on this ground. No separate arguments or evidence have been put before this Tribunal, and therefore the Tribunal makes no ruling on this question.”
“The Tribunal stated … that the rulings were not an interim or partial award and would be incorporated in a partial or final award on the merits of the proceedings. The ICC has suggested that, to avoid any possible prejudice to either party from the adoption of that course, the parties should be given the option of the rulings being given as a partial award after the normal scrutiny by the ICC. The Tribunal has agreed to that suggestion and the parties are therefore informed that if either party indicates (or both parties indicate) by November 21, 2014, that it wishes (or they wish) that course to be adopted, the Tribunal will (subject to scrutiny by the ICC) make a partial award.”
“The Parties have consulted following the President’s email to them on29 October 2014 . Neither Party requests that the Tribunal issue the Rulings on Preliminary Issues dated21 October 2014 as a Partial Award, with the understanding that [TCCA] will not assert that [the Province of Balochistan’s] decision not to seek review of the Rulings prior to the Tribunal’s incorporation of those Rulings into an Award shall compromise whatever right [the Province] may have in relation to challenging, the enforcement of, the recognition of, or any other form of review of the Award, upon its issuance.”
“The [Government of Balochistan] has recently uncovered cogent new evidence of extensive corruption by TCC in relation to the Reko Diq project, including bribery of a broad range of [Government] officials. The issue of corruption has long been suspected and the Tribunal will recall that during the preliminary phase the [Government of Balochistan] referred to the Supreme Court’s identification of “extensive irregularities and corruption” in respect of Reko Diq. However, the Supreme Court made no finding on this and the Tribunal noted in its Decision on Preliminary Issues that “no separate arguments have been put before the Tribunal, and therefore the Tribunal makes no ruling on this question.” … … [T]his new evidence will have significant consequences including for the procedure going forward. It goes to important issues which have not been dealt with in the arbitration to date and will not require a re-opening of the proceedings as a whole. …”
“10. Balochistan’s position in these proceedings has been that it was not challenging the CHEJVA on grounds of corruption notwithstanding suspicions of corruption, in light of difficulties in evidencing corruption. While the Tribunal intended to address “all issues relating to the validity and binding nature of the CHEJVA” at the June 2014 hearing, the Tribunal made no ruling on the question of corruption in its Ruling on Preliminary Issues, there being “no separate arguments or evidence … put before [the] Tribunal”.”
“7. The tribunal has considered the submissions. The allegations, or similar allegations have been made from an early stage in the proceedings in the Pakistani courts, and the respondent did not adduce any positive material in this arbitration until the present application. The tribunal is not convinced that the evidence could not have been presented and/or obtained much earlier. But without in any way suggesting that the allegations have merit, the tribunal considers that it is important that allegations of this kind be dealt with, and, although they should have been detailed much earlier, the claimant will not be substantially prejudiced by having to deal with them at this stage. 8. As to procedure, the respondent is in effect asking for another preliminary issue to be determined in the form of an application to dismiss. 9. The tribunal is not satisfied at this stage that the hearing of such a further preliminary issue would be efficient or appropriate, and therefore orders that: (1) The corruption allegations be set out in the Supplemental Counter- Memorial to be served pursuant to the tribunal’s previous order in its email dated April 28, 2015; (2) pending service of the Supplemental Counter-Memorial, the respondent should serve by January 11, 2016 in final form the section dealing with the corruption allegations supported by all witness statements and relevant documents in its possession; (3) the parties should report to the tribunal by January 25, 2016 what progress has been made on agreeing a timetable for service of the Supplemental Counter-Memorial and for other procedural steps leading to the scheduled hearing, as requested in the tribunal’s email of August 17, 2015.”
“207. There is well known precedent, in the form of Judge Lagergren's 1963 award [ICC Case No. 1110 of 1963, 3 Arbitration International (1994, no.3) at pp. 282-294.], for an ICC tribunal to hold that the existence of bribery can lead to a finding that a tribunal does not have jurisdiction. Nevertheless, contemporary arbitral practice has moved away from finding that corruption has an impact on the jurisdiction of a tribunal and has instead given effect to the doctrine of separability. This doctrine is enshrined in the laws and rules applicable to these proceedings.”
“the issue of corruption was not put to the Tribunal for determination at the June 2014 hearing. As such, the Tribunal did not decide the issue.”; (b) at paragraph 313: “TCC’s corruption is still highly relevant to a consideration of the merits of the Claimant’s Mining Lease Application and its rejection”; (c) at paragraph 318: “Rather, this Subsection addresses the numerous reasons why TCC's corruption provides a further, separate basis for rejecting the Claimant's claims on the merits.”
“Accordingly, the [Government of Balochistan] accepts that the Tribunal has jurisdiction to determine TCC's claims.”
“It is incumbent on a party seeking to bring a claim based on new materials to condescend to real particularity. As noted in Terna in seeking relief from the Court, it is normally incumbent upon the applicant to adduce evidence which explains his conduct, unless circumstances make it impossible. Thus if an applicant does not do this, the court is entitled to count any periods where no good excuse is established as being periods lacking in good reason. So too may it draw an inference when issues go un-dealt with.”
“[…] a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did.”
“The requirements for a waiver have not been met (and it is difficult to see how a waiver could arise in circumstances where it is well established that there can be a rehearing under section 67, a fact parties are taken to know), and in the context of no restriction being set out in section 67 itself restricting what arguments may be re-run, no question of any loss of a right to advance particular arguments on a rehearing under section 67 can arise.”
“The [Government of Balochistan] does not seek to pursue the argument that the arbitration agreement in the CHEJVA is vitiated by TCC's corruption. Accordingly, the [Government of Balochistan] accepts that the Tribunal has jurisdiction to determine TCCA's claims.”
“Unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement.”
“… [a] decision necessarily involves a judicial determination of some issue of law or fact, because it could not have been legitimately or rationally pronounced without determining or assuming a particular answer, that determination, though not expressed, is an integral part of that decision”
“As all the key provisions of CHEJVA were made subject to a reliance on relaxations that were illegal and void ab initio, the illegality of the agreement seeps to its root. As such, no operative part of the agreement survives to be independently enforceable and the principle of severability [sic] cannot be applied to save any part thereof. The agreement is, therefore, void and unenforceable in its entirety under the law.”
“invalidity, illegality or unenforceability for any reason of any provision of this Agreement shall not in any way prejudice or affect the validity, legality and enforceability of the remaining provisions”
“58. … judicial restraint is … called for given the specific facts and circumstances of the matter … 59. Learned counsel for BHP further submitted that without prejudice or otherwise affect [sic] the position adopted or advanced by any of the parties to the arbitration proceedings as BHP itself is not a party to the arbitration proceedings the ICC arbitration arises pursuant to the arbitration agreement contained in the CHEJVA, but under settled principles of law an arbitration agreement or even an arbitration clause as a part and parcel of a contractual agreement, is severable/separable/autonomous from the main agreement (CHEJVA) and would under these principles survive even if the CHEJVA is struck down. The underlying cause of action in the ICC arbitration appears primarily to be premised on an alleged breach of contractual obligations. In this regard, arbitration clause is treated as an independent agreement, freely entered into by the parties, and thus enforceable for determination of a dispute under the agreement. This will include even the validity of the main agreement. … 60. Learned counsel further argued that …Article 6(9) of the Rules of Arbitration of the International Chamber of Commerce (ICC Rules) provides that unless otherwise agreed, the arbitral tribunal shall not cease to have jurisdiction by reason of any allegation that the contract is non-existent or null and void, provided that the arbitral tribunal upholds the validity of the arbitration agreement. And, the arbitral tribunal shall continue to have jurisdiction to determine the parties’ respective rights and to decide their claims and pleas even though the contract itself may be non-existent or null and void. …”
“Mr. Khalid Anwar, Sr. ASC argued that if TCC were granted the mining lease, the instant petition would still be maintainable because this Court could then declare that everything including relaxation was illegal and strike it down, for which this Court had jurisdiction. However, if they had refused to grant it, there would be no complaint against them to be agitated before this Court unless this Court had given the findings that the international arbitration clause of CHEJVA was illegal and unconstitutional; ICSID and ICC Arbitration should not have taken place; and the verdict, if any, given by the Arbitrators would be null and void. He requested the Court not to give such a finding and suggested that proper course for the Court would be to stay its hands off and wait for the outcome of those proceedings being carried out under the laws of Pakistan, namely, the Arbitration (International Investment Disputes) Act, 2011, the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, and the Fourth Schedule to the Constitution of Pakistan under which the International Arbitration Treaties are binding upon the Government of Pakistan. According to the learned counsel, that would be the best, clearest, fairest and most transparent approach, which would restore the confidence of foreign investors in Pakistan as a safe environment for their investments and there would be no conceivable allegations that the agreement was struck down after the discovery had been made. He urged that Pakistan should stand up for its commitments under the bilateral treaty read with ICSID clause, which the State of Pakistan has accepted voluntarily and freely, and that this Court should not put its prestige on the line.”
“On an application under sub-section (1), the court shall refer the parties to arbitration, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed”
“1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration. 2. The term "agreement in writing" shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. 3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.”
"With regard to the application of the arbitration clause, the same considerations apply. ... If I am right in the view I take in the events which have happened there is no binding contract, the arbitration clause is not binding, and there is no contract out of which or in reference to which any dispute can arise."
“The Claimant [a reference to TCCA, as claimant in the arbitrations], its Pakistani subsidiary and its parent companies are before the Supreme Court of Pakistan and before were present before the Balochistan High Court.”
“We find force in the submission of learned counsel for [the Government of Balochistan] that the respondent company has been changing its position and has not been forthcoming before the Court. For example, it was described as TCCA before the Balochistan High Court (as described in the impugned judgment at page 27 …). Thus, in the appeal, it is TCCA that would continue to be present before this Court. However, it was later stated that it is not TCCA, but TCCP that is before this Court without making any application for the change of parties. The Court accordingly issued notices to TCCA.”
“Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase "privity of interest." Thus in relation to trust property I think there will normally be a sufficient privity between the trustees and their beneficiaries to make a decision that is binding on the trustees also binding on the beneficiaries, and vice versa.”
“It is obvious that the defendant in the New York proceedings is not the same as the claimants in the English proceedings; the question therefore is whether SCBHK is a privy are privies in the sense used in the quotation from The Sennar. For this purpose it is sufficient to cite Resolution Chemicals v Lundbeck A/S[2014] RPC 5 in which Floyd LJ at para 32 said:- “…a court which has the task of assessing whether there is privity of interest between a new party and a party to previous proceedings needs to examine (a) the extent to which the new party had an interest in the subject matter of the previous action; (b) the extent to which the new party can be said to be, in reality, the party to the original proceedings by reason of his relationship with that party, and (c) against this background to ask whether it is just that the new party should be bound by the outcome of the previous litigation.”
“4. On7 January 2013 , the Supreme Court of Pakistan issued an Order declaring that the CHEJVA and related agreements are “illegal, void and non est”
“5. In summary (and without limitation), the CHEJVA and related agreements are [delete “Supreme Court Judgment declared that the CHEJVA was”] void due to (i) the existence of corruption; (ii) the fact that CHEJVA’s object was unlawful; (iii) the fact that TCCA had made a mistake of fact when entering into CHEJVA; (iv) the fact that CHEJVA represented an effort to interfere with a public body in Pakistan; (v) fundamental uncertainty; (vi) the fact that certain relaxations of mining rules were granted in excess of authority and ultra vires and void; (vii) the fact that Clauses of CHEJVA violated mining rules or were inconsistent with them; (viii) the CHEJVA was contrary to public policy and/or illegal; (ix) the CHEJVA was entered into for inadequate consideration; (x) the fact that TCCA’s licences stood transferred to another company; (xi) the fact that relaxations of mining rules were unjustifiably granted without any explanation; and (xii) the CHEJVA contravened section 23 of the Pakistan Contract Act. In the Supreme Court Judgment, the Supreme Court declared that the CHEJVA and related agreements are void for all these reasons. … 9. The Court should now set the Award aside and/or declare it has no effect. The ICC tribunal has no jurisdiction for the following reasons: … b. Further or alternatively, whether or not any issue estoppel arises out of the Supreme Court Judgment, as a matter of the law of Pakistan the CHEJVA is void for the reasons set out in the Supreme Court Judgment and/or paragraph 5 above and the arbitration agreement is not separable from it. c. Further or alternatively, if the arbitration agreement is separable from the CHEJVA then it is governed by the law of Pakistan (either because (i) the parties have made an express choice; or (ii) the parties have made an implied choice; or (iii) the arbitration agreement has its closest connection with Pakistan), alternatively English law, and the arbitration agreement is void for the reasons set out in the Supreme Court Judgment and/or paragraph 5 above. …”