Lawsuit Against Etisilat On Non-payment of PTCL Dues
Lawsuit Against Etisilat On Non-payment of PTCL Dues: After remaining unable to resolve the matter amicably, Pakistan is considering taking Etisalat to the London Court of International Arbitration over non-settlement of $800 million worth of outstanding privatization proceeds of Pakistan Telecommunication Company Limited (PTCL).
“The Ministry of Privatisation and the office of Attorney General of Pakistan have completed necessary consultations,” However, before formally approaching the international court, a last chance would be given to the United Arab Emirates to resolve the issue on a government-to-government basis.
Privatisation Secretary Irfan Ali had sent a summary to former privatisation minister Daniyal Aziz, which contained both the options of using government channels and invoking the arbitration clause, said officials. However, Aziz did not clear the summary.
Now, the ministry plans to send the summary directly to caretaker Prime Minister Nasirul Mulk, who also holds the portfolio of privatisation minister, said the officials.
The ministry believes that it has a strong case to fight against Etisalat. But it is not yet clear whether the caretaker government will take a decision that will have far-reaching implications for the country or leave the matter for the next government.
The privatisation ministry believed that Etisalat would not easily cough up the money and the matter would have to be taken to the court, said the officials.
Etisalat had stopped the payment of $800 million to Pakistan on account of privatisation proceeds of PTCL. In July 2005, Etisalat bought 26% shares in PTCL with management control for $2.6 billion.
However, after coming to know that the second lowest bid stood at just $1.4 billion, the UAE-based company tried to backtrack from the offer.
Then privatisation minister Abdul Hafeez Sheikh lured the company by offering it to make an initial payment of $1.4 billion and pay the remaining amount in nine instalments until September 2010. Moreover, he committed to transferring the properties owned by PTCL to Etisalat.
Etisalat is withholding the dues on the grounds that Pakistan has not yet transferred titles of all properties.
Now, the issue of transfer of properties has become a stumbling block in the way of resolving the matter. Out of roughly 3,300 properties, about 33 cannot be transferred in the name of PTCL.
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