Copyright brecorder
ISLAMABAD: The Prime Minister’s Office (PMO) has directed the Power Division (PD) and the Attorney General for Pakistan (AGP) to act proactively and effectively to safeguard the government’s interests in the international arbitration initiated by M/s Halmore Power Company, well-informed sources told Business Recorder. According to the sources, these instructions were conveyed by Additional Secretary-II (O/B), PMO Syed Hamid Ali, through a formal communication to the relevant authorities. The direction follows a notice of arbitration issued by Mian Karim-ud-Din, owner of the 225 MW Halmore Power Company, who has filed proceedings before the London Court of International Arbitration (LCIA). Mian Karim-ud-Din formally initiated Investor-State arbitration proceedings against the Government of Pakistan through a Notice of Arbitration served on October 8, 2025. The arbitration is based on alleged violations by Pakistan of the UK-Pakistan Bilateral Investment Treaty (BIT). While the claim amount has not been formally quantified, it is estimated at around USD 80 million. The dispute centers on the claimant’s assertion that Pakistan’s actions adversely affected his investment in the Halmore Power Generation Company. The claimant seeks declaratory relief for alleged treaty violations, injunctive relief to halt further breaches, and compensation — estimated at USD 80 million — along with interest and legal costs. Under the dispute resolution mechanism of the BIT, the arbitration will proceed in accordance with the UNCITRAL Arbitration Rules 2021, which require Pakistan to submit a response to the notice of arbitration within one month of receiving the notice — by November 8, 2025. To prepare the response, the government must establish a preliminary factual position on each allegation raised by Mian Karim-ud-Din. This will be followed by a detailed factual narrative and witness statements to assess the merits of the case and develop a strong counter-narrative for Pakistan’s defense. Sources said Mian Karim-ud-Din has retained the services of Messrs Gaillard Banifatemi Shelbaya, a well-known international law firm specializing in investor-state disputes. The case will be led by Yas Banifatemi, a globally recognized expert in international arbitration and investment treaty law. In view of existing situation and considering the urgency in preparing a Response to Notice of Arbitration by November 8, 2025, a high level meeting unanimously agreed as follows: (i) concerned officials of the Task Force and Power Division will conduct detailed assessments of the allegations made by Karim-Ud-Din and revert with a factual position by 23 October 2025; (ii) the Office of the Attorney General will shortlist reputable international law firms and initiate selection process against capped fee proposals, and the Power Division will subsequently proceed with execution of letters of engagement and bear responsibility for expenses of the same; and (iii) after further deliberations and review of the factual position in reply to allegations contained in the Notice of Arbitration, a draft Response to the Notice of Arbitration will be prepared for confirmation. According to the arbitration notice, in 2024, despite having forced Halmore to reduce the said adjusted tariff in 2021, Pakistan intensified its efforts to terminate or, once again, forcibly re-negotiate terms under which the IPPs were operating. Specifically: (i) constitution of a task force, which immediately proceeded to employ brutal and coercive means to extract concessions from IPPs; (ii) illegitimate pressure on the claimant into accepting various concessions and attack on the claimant and his investment; (iii) intimidatory tactics inclusive of in person meetings with Halmore’s CEO at the Lahore headquarters of a law enforcement agency (LEA) on August 29, 2024 where a set of pre-drafted documents were urged to be signed without delay; (iv) had Halmore accepted Pakistan’s proposed terms, Halmore would have been financially crippled, threatening the viability of the Bhikki Power Plant and the jobs associated with it; (v) threatening of Halmore’s CEO at a location in Westridge, Rawalpindi; (vi) monitoring of communications and restrictions on travel whereby Halmore’s CEO was stopped from boarding two flights and put on a no-fly list; (vii) initiation of investigations into the Claimant and his investment in Pakistan, inclusive of parallel investigations by Nepra; (viii) withholding of payments whereby Pakistani authorities have withheld approximately Rs 6.6 billion owed under the respective Power Purchase Agreement; (ix) Pakistan’s conduct vis-à-vis the Claimant violates its international obligations under the treaty, namely fair and equitable treatment and full protection and security set out at Article 2(2) of the Treaty inclusive of obligation to ensure “management, maintenance, use, enjoyment or disposal” of investment; and (x) observing obligations with regards to investments of UK nationals set out in Article 2(2). Copyright Business Recorder, 2025
