ISLAMABAD, Nov 16: The Supreme Court warned the federal government on Friday that it would be held responsible if the International Centre for Settlement of Investment Disputes (ICSID) issued an adverse verdict on a dispute between Pakistan and the Tethyan Copper Company (TCC) over Reko Diq mining lease.

The ICSID had reserved its judgment on the dispute on Nov 6. The TCC had invoked the jurisdiction of the International Chamber of Commerce and the ICSID against the failure of the government of Balochistan to take a decision on its request for renewing prospective Reko Diq minerals licence in accordance with Balochistan Mining Rules-2002.

The TCC is a Canadian-Chilean consortium of Barrick Gold and Antofagasta Minerals formed to explore gold and copper in Reko Diq, a small desert town in Chagai district of Balochistan located in the popular Tethyan copper belt known for having fifth largest deposits of gold and copper in the world.

A three-member bench, headed by Chief Justice Iftikhar Mohammad Chaudhry, expressed its intention of seeking explanation from the parties involved in the mining dispute as to under which law the TCC had been given mining rights in Pakistan and what provoked the company to approach the ICSID if the agreement was transparent and legal.

The bench had taken up a petition filed by Dr Abdul Haq Baloch, one of the petitioners in the main Reko Diq case, seeking an order to stop the federal and the provincial governments from appearing in international arbitration forums.

Advocate-General of Balochistan Amanullah Kanrani submitted documents pertaining to the lease and argued that the agreement between the provincial government and the BHP Minerals Intermediate Exploration had been signed only for search of mineral resources.

The BHP is the company with which the original agreement called CHEJVA (Chagai Hills Exploration Joint Venture Agreement) was signed in 1993 by the Balochistan government. But the company transferred the agreement to South African company Mincore for $60 million in 2006. Mincore then sold the agreement to the TCC for $260 million.

Mr Kanrani expressed fears about an impending adverse decision since during arbitration process the ICSID had inquired on whom the penalty for compensation, to be paid to the TCC, should be imposed if the contract was declared null and void.

The court ordered all the parties to tell it under which law the agreement had been challenged at an international forum.

Advocate Raza Kazim, representing the petitioner, argued that the agreement was “tainted and riddled with corruption,” and tailor-made to cater to the needs of the mining companies.

The international arbitration process, he said, did not create obstacles in the exercise of legal jurisdiction by the court for appropriate remedy.

The case will again be taken up on Monday.