Pakistan hires two US law firms for Iran gas pipeline arbitration — attorney general

KARACHI: Pakistan has hired two prominent US law firms, Willkie Farr & Gallagher and White & Case, to defend its position in an international arbitration case initiated by Tehran over the stalled Iran-Pakistan gas pipeline project, the attorney general confirmed on Monday.

The dispute stems from a gas sales and purchase agreement (GSPA) the neighboring countries signed in 2010 to build a pipeline to transport natural gas from Iran to Pakistan. Known as the Peace Pipeline, the project has faced delays and funding challenges for over two decades. Pakistan said in March it would seek a US sanctions waiver for the pipeline, to which the US responded publicly, saying it did not support the project and cautioning about the risk of sanctions in doing business with Tehran.

Widespread media reports this year suggested Iran had slapped Pakistan with a final notice to finish its part of the cross-border gas pipeline or face international arbitration. Iran has now initiated the proceedings before the International Court of Arbitration in Paris, seeking damages for Pakistan’s failure to fulfill its obligations. Islamabad reportedly faces a potential penalty of up to $18 billion.

Attorney General for Pakistan, Mansoor Usman Awan, confirmed the government had hired the two US law firms, Willkie Farr & Gallagher and White & Case, to fight the case.

“We believe we have a strong case to defend,” Awan told Arab News, declining further comment.

Barrister Aqeel Malik, a spokesperson for the government of Pakistan on legal affairs, also said Islamabad had a good case. 

“We are quite hopeful that we will avoid any breach of contract penalties. At the time this agreement was signed, sanctions were already in place, rendering the deal with Iran effectively an ‘unenforceable contract.’ As it was unenforceable, penalties do not apply.”