ISLAMABAD: The government has decided to avoid future investment treaties and terminates agreements that carry legal risks.
Pakistan has decided to maintain its bilateral investment agreements with the European Community (EC) and South Asian nations, as they provide no threat of investor-state disputes. In order to add, amend, and modify specific clauses relevant to the definition of investment, the government has additionally opted to engage with the Malaysian side. The government has authorized a plan for Treaties with Investment Provisions (TIPs), according to sources, to reduce the possibility of legal disputes in foreign courts.
For many situations, like Rekodiq, in which investors employed TIPS under bilateral investment treaties inked with other nations, the government of Pakistan has in the past had to defend itself in international tribunals. The government has chosen not to sign any more bilateral investment treaties (BITs) in the future and has also revoked agreements it had already made with several nations that constituted a significant risk of legal action, in order to reduce this risk. Foreign investors have so far brought 10 complaints under TIPs to various international arbitral venues, the cabinet was previously informed.
Additionally, it was made known that 23 BITs with various nations are revocable in order to prevent commercial contracts with foreign companies from being arbitrated internationally. To resolve these legal disputes, Pakistan was required to spend billions of dollars in compensation. There are nine more BITs, but they can be cancelled or reformed by engaging the relevant countries on a bilateral basis, the Board of Investment (BOI) had informed the cabinet.
