Now Reading: PIA to Fight for Protecting the Roosevelt Hotel as Its Property
The Pakistan International Airlines (PIA) on Wednesday announced that it will be contesting to save its New York’s Roosevelt Hotel which is being evaluated by a British Virgin Islands (BVI) court to settle the Reko Diq case as it was mortgaged against the deal.
According to the details through sources prior to the development, the national flag carrier has sought the help from high court lawyers in the litigation process as it prepares grounds to fight the case of Roosevelt Hotel which is feared to be awarded to the international mining company.
The sources have confirmed of the development that PIA will hire its own lawyer and will fight the case via its off shore company Pakistan International Airlines Investment Limited (PIAIL) established in BVI.
Earlier, it was reported that Pakistan is considering a second bailout package worth $35.58 million for the Roosevelt Hotel, and the Economic Coordination Committee (ECC) of Pakistan has decided to set up a panel to provide the package.
In September, the Economic Coordination Committee, another cabinet body, approved the allocation of $142 million for settling various “financial requirements” of the hotel. By October, the news broke that the hotel would be closing its doors permanently, fixed on their website along with a sentimental farewell note. The news was denied vehemently at first, the notice on the website removed, but later it proved to be true. A few weeks later, the CEO of PIA told a Senate committee that the hotel will be closed for “renovation” on Dec 31.
But today, the hotel’s website is barren, carrying only a note that says “[w]e thank you for letting us be part of the very best of New York for the last 100 years. We leave you with this thought….” and there follows some sort of an inspirational quote from Theodore Roosevelt.
Background of the Reko Diq Case:
In the case of Reko Diq, a massive contract was annulled on a technicality so minute most people would have a hard time recalling what it was. Along the way, the PPP government moved to sell the Roosevelt Hotel to pay for PIA losses in preparation for possible privatization but was restrained from doing so on objections that the price they were aiming to fetch was too low. The PML-N government sought an out-of-court settlement with TCC back in 2014, but were restrained from doing so, with some folks asking ‘why is the government in a hurry to pay TCC’?
The result is that today we are on the verge of losing the hotel which will pay only a fraction of the award. The righteous brigade should sober up and tally up the costs of what they have done.
Pakistan risked losing valuable real estate properties in the United States and France after a court was moved to enforce an international arbitration decision involving a cancelled mining concession.
A court in the British Virgin Islands had appointed an official to assess the value of Roosevelt Hotel in New York and the Scribe in Paris – both owned by the state-run Pakistan International Airlines (PIA).
A consortium of Barrick Gold and Antofagasta, the two multinational mining giants, wanted control of the hotels as compensation against the cancellation of a copper and gold mining license.
The companies said that they were unjustly stopped from extracting the minerals. Pakistan on the other hand argued that the project was beset with irregularities and the country wasn’t getting a good deal.
Arbitration law experts from around the world have taken interest in the case since the International Center for Settlement of Investment Disputes (ICSID), a World Bank quasi court, imposed a hefty $5.97 billion fine on Pakistan in 2019.
Prime Minister Imran Khan’s government is trying to seek an out-of-court settlement. But even then Pakistan can end up paying a substantial amount, says Nicolas Roux of Bilaterals.org, which keeps track of such cases.