Pipeline Stalemate: Pakistan gears up for legal showdown with Iran in Paris

ISLAMABAD, Pakistan - The government has recruited three law firms to fight Iran's case against Pakistan at the Court of Arbitration in Paris for not completing its section of the gas pipeline and failing to meet the 750mmcfd gas intake requirement under the Iran-Pakistan gas pipeline.

According to top officials in the Law Division and Attorney General's Office, Pakistan hired the services of well-known international law firms - White & Case, Three Crowns, Willkie Farr Gallagher - as well as one principal counsel based in Australia, who is also known around the world as one of the leading lawyers in the oil and gas infrastructure sector.

The relevant authorities have briefed the law firms and one principal counsel on the Iran-Pakistan (IP) gas pipeline project and the reasons for Pakistan's failure to complete the transnational project.

"We submitted with the secretariat of France-based Court of Arbitration on October 18, 2024, details about the legal team that would represent Pakistan in the Arbitration Court proceedings," according to sources.

"Pakistan will now choose one arbiter after consulting with its legal staff. Similarly, one arbitrator will be picked by Iran, while the third will be nominated jointly by both states. "This is how the Court of Arbitration will proceed with the case," he stated.

Iran served its final notice on Pakistan in August 2024, notifying that Tehran had no choice but to file a complaint with the Paris Arbitration Court in September 2024 against Pakistan for failing to construct the pipeline under the IP gas project within the extended 180-day deadline.

Since 2014, the project has been facing a 10-year delay due to proposed US sanctions.

The Gas Sales Purchase Agreement (GSPA) was signed in 2009 under French law.

The French Arbitration Court is the mechanism for resolving disputes between two countries and does not recognize United States sanctions.

In September 2019, Pakistan's Inter-State Gas Systems (ISGS) and the National Iranian Gas Company (NIGC) signed a revised contract. According to the pact, Iran would not approach any international court if the pipeline construction was delayed.

On the other hand, Pakistan will build its pipeline by 2024, when it can import 750 million cubic feet of Iranian gas daily.

Under the new contract, Pakistan was required to build a pipeline segment on its territory until February-March 2024. Iran helped Pakistan by extending the 180-day timeframe, which expired in September 2024.

However, authorities once again failed to lay the pipeline. Then, Iran sent the final notice.

According to the original agreement, Pakistan must pay Iran $1 million per day beginning January 1, 2015, under the penalty provision.

The project was to be implemented in a divided manner, with Iran laying down the pipeline on its side and Pakistan building the pipeline on its border. It was scheduled to be completed by December 2014 and operational on January 1, 2015.