ISLAMABAD : The country has no law to safeguard foreign direct investment (FDI), as the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Ordinance has lapsed. The Supreme Court, in its July 31, 2009 verdict, had given 37 ordinances, including arbitral awards, a life of 120 days and asked parliament to take decision on these ordinances by November 28, 2009.
This ordinance was re-promulgated, but lapsed again. Various chambers of commerce occasionally criticised the government for taking almost 10 months to be present in the National Assembly’s standing committee on law and justice and still waiting to convert into an Act. The ordinance has been pending before the National Assembly’s standing committee on law and justice at present. On other hand, foreign investors are persuading the BOI to take immediate steps for promulgation of foreign investment bill 2009.
The bill is on the table of National Assembly’s standing committee on law and justice for a long time. Only one meeting took place on this subject so far. Delay in calling the standing committee meetings is hampering the flow of foreign investment in Pakistan, a senior officer of government said. Sources in National Assembly Secretariat said that on the directive of the prime minister, the standing committee meeting is scheduled to be held on September 16 to finalise the bill.
In its first meeting, the committee pended the reading of International Investment Disputes Bill 2009 on Zahid Hamid’s dissent note in which he urged that the Board of Investment should study arbitration agreements of other countries before approval of the bill by standing committee.
In first meeting, BOI informed the committee that two investment conventions could only be invoked when a bilateral agreement exist between the contracting states. In the event of any inconsistency between this bill, any other law, or any Judgement of any court and the Convention, the Convention shall prevail to the extent of the inconsistency.
It was also said that in case party was not satisfied by local courts, it might go to international investment arbitration. In this case convention prevailed over the local courts’ decisions. Committee, however, was not satisfied with the interpretation of arbitration laws and directed secretary BOI to revisit the laws in the light of other countries’ law on foreign agreements and foreign arbitral awards. – Brecorder
