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Pakistani firm wins legal battle against Canadian company at int’l court


Jan 21, 2015
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Pakistani firm wins legal battle against Canadian company at int’l court​

Bermuda-based FHL held responsible for covering arbitration costs of $250,000

A Pakistani oil company, Petroleum Exploration (Pvt) Ltd (PEL), has emerged victorious in a legal dispute against Bermuda-based Frontier Holdings Ltd (FHL) at the International Court of Arbitration.

As per a news report, the court ruled that Pakistani laws govern the Petroleum Concession Agreements (PCAs) signed within the country.

The court ruling confirms Pakistan’s legal authority over arbitration agreements linked to Petroleum Concession Agreements (PCAs) and Joint Operating Agreements (JOAs).

The tribunal, with a majority decision, stated it lacked jurisdiction over this dispute and FHL is responsible for covering the arbitration costs, set at $250,000.

The legal clash was initiated by FHL, a subsidiary of the Canadian company JuraEnergy Corporation, following a disagreement with PEL, its local partner, in the Badin North and Badin South blocks.

These blocks, allocated in 2006 by the Ministry of Petroleum, hold a 27.5% share owned by FHL.

The tribunal’s ruling underscores the necessity for parties engaging in agreements related to PCAs and JOAs in Pakistan to comply with Pakistani laws governing their transactions.

A senior official from PEL mentioned that the international arbitration aimed to impede oil and gas exploration and production (E&P) activities in Pakistan.

The official noted that such companies, functioning as non-operators in the E&P sector, have defaulted on financial obligations to the government of Pakistan and key industry players like OGDCL and Mari Petroleum.

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