Pakistan Government Approves Rs4.3 Billion Grant Across International Power Sector Arbitration Cases Against Investor.

Pakistan is fighting several cases involving its power sector in international courts. Investors have filed suits claiming the government breached contracts. An earlier case about the Reko Diq copper and gold mine saw a court order a $6 billion penalty on Pakistan, which the government later settled with the Canadian firm. The government has approved a grant of Rs4.3 billion to defend cases brought by independent power producers and shareholders of K‑Electric. The money will be used to reimburse legal costs already paid by the Private Power and Infrastructure Board and the Central Power Purchasing Agency‑Guarantee, and will also cover adjustments to advances released by the agency. Current disputes include three arbitration actions by Star Hydropower Limited before the London Court of International Arbitration, an investor dispute filed by Halmore Power under the UK‑Pakistan Bilateral Investment Treaty, and a case raised by K‑Electric shareholders under the Organisation of Islamic Cooperation Investment Agreement. Halmore Power has claimed about $80 million in damages over what it says is discriminatory treatment and forced contract renegotiation for a 225‑megawatt power project. Shareholders of K‑Electric argue that regulators delayed a sale to Shanghai Electric Power, did not pay dues, and disputed tariff and consumer charges. The government has engaged foreign law firms such as Howard Kennedy, King's Counsel Toby Landau, Cornelius, Lane & Mufti, Mayer Brown International, Three Crowns and BNR Pakistan to represent its interests in these tribunals. The Power Division estimates that arbitration costs will reach Rs1.179 billion this fiscal year and Rs3.794 billion in the next two fiscal years. Because no budget allocation was made, the ministry sought a supplementary grant so that costs can be paid on time and existing expenses reimbursed. The Ministry of Law and Justice, the Attorney General’s office, PPIB and CPPA‑G backed the request. The Attorney General said it is important to prioritize this matter to protect Pakistan’s legal position in international forums.