ISLAMABAD: The federal cabinet has approved payment of $28.7 million in damages to the Washington-based asset recovery firm Broadsheet LLC and at the same time decided to challenge the British court’s decision to attach the accounts of the Pakistan High Commission in London.
The approval was granted after the office of the attorney general and the law ministry advised the government to let the National Accountability Bureau (NAB) clear the $28.7m award.
The government has also decided to fix the responsibility about the debacle on those involved in engaging the firm in 2000 during the Pervez Musharraf era, signing a controversial agreement and the payment of $5 million to a “so-called front man” of the firm.
“The federal cabinet has given approval for payment of damages to the US-based asset recovery firm,” Adviser to the Prime Minister on Accountability Mirza Shahzad Akbar told Dawn, adding the government would also fix responsibility about the debacle on those involved in engaging the firm on ambiguous terms and already paying the damages amount to a “so-called representative” of the firm.
Cabinet decides to challenge British court’s decision to attach accounts of Pakistan High Commission in London in row between US-based asset recovery company and NAB
The adviser said NAB was conducting an investigation against Tariq Malik, who is presently in Dubai, who had paid damages to the so-called front man.
He said the agreement with the US firm was inked in 2000 and the successive governments had not pursued the case properly, with the result that Pakistan had to pay the damages to the US firm.
“The arbitration between Pakistan and Broadsheet started during the Pakistan Muslim League-Nawaz (PML-N) government and a settlement was made by the Pakistan Peoples Party (PPP) government, but the money was given to the person who, according to the firm, was not its representative,” he added.
Meanwhile, a senior NAB official said the bureau had decided to take action against those responsible for the loss and humiliation. “Some officials of NAB, other government departments and Pakistan High Commission in the UK will be under investigation,” he said, adding NAB Chairman Javed Iqbal was also holding a meeting of senior officials of the bureau to fix responsibility on those involved in the fiasco.
An informed source told Dawn that both the AG office and the law ministry had advised the government that regardless of facts of the case, the UK high court decision to debit $28.7m from the accounts of the Pakistan High Commission in London over non-payment of the penalty by NAB to the firm should be challenged.
“This should be done to ensure that sovereign immunity accorded to Pakistan and the accounts of its high commission are respected by foreign courts and the present case should not become a precedence to be used against us,” the source added.
“This is a sorry tale of gross mishandling by NAB and therefore they should be answerable to the people of Pakistan for this sordid saga,” he said.
It should also be looked into how the award of $22m accumulated into $28.7m due to non-payment of interest, which incurred at a rate of $4,758 per day – an amount also compoundable after every six months, the source said.
The clearing of the penalty was necessary to avoid further recurring of heavy interest, he said.
Usually the accounts of high commissions, embassies and central banks were treated as sovereign assets hence they were immune from being taken over, he said.
Referring to the role of the NAB in this fiasco, the source described the event as a perfect example of “how things should not have been done”.
This is the second such setback to Pakistan in a row as earlier on Dec 16, 2020, the High Court of Justice in the British Virgin Islands (BVI) granted a stay order ex-parte on a plea by the Tethyan Copper Company for enforcement of July 12, 2019, $5.97 billion award against Pakistan by the International Centre for Settlement of Investment Disputes in the Reko Diq case.
In June 20, 2000 Pakistan initially faced a lawsuit of $580m on a dispute raised by Broadsheet LLC, a company hired for recovery of money and assets plundered by Pakistanis and invested in offshore companies.
An agreement was signed between the firm and NAB to help recover the country’s stolen assets stashed in different offshore companies. But the dispute arose on the payment of service fees which was subsequently referred to international arbitration in London where the litigation before Arbitrator Sir Anthony Evans QC concluded in an interim award in terms of liability under Section 4 and 6 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) 2011.
Under the agreement, NAB agreed to pay 20 per cent of the recovered or detected amount to the company. The bureau concluded the agreement in May 2008, paying $5m through a settlement agreement with a representative of Broadsheet. But the firm took NAB to the international court of arbitration, claiming that it had not received the amount it was supposed to.
In Dec 2018, former English court of appeal judge Sir Anthony Evans QC issued the order for payment of $22m to Broadsheet by the government of Pakistan. In July 2019, the government filed an appeal against the order, but was unsuccessful in its bid.
The arbitrator found that Pakistan and NAB had wrongfully repudiated the asset recovery agreement with Broadsheet and ruled that the company was entitled to damages.
Talking to Dawn, former prosecutor general of NAB Irfan Qadir said the country faced defeat because the case had not been properly pursued.
He claimed that under internationally recognised doctrine of contra proferentem, any clause considered to be ambiguous should be interpreted against the interests of the party that created, introduced or requested that the clause be included.
Mr Qadir said the firm had inserted a clause in the contract under which it was to get a share not only in assets it will trace outside the country and also in those recoveries to be made in Pakistan by any other organisation like NAB etc.
“The US firm had not traced even a single asset of any accused of NAB abroad but claimed its share in recoveries made inside Pakistan,” he added.
He said the agreement was drafted by the same firm and therefore the liability of any ambiguity fell on the firm.