Islamabad has finally decided to sign a deal with Moscow to settle a 39-year old exporters' claims case pending since the disintegration of the Soviet Union, paving the way for Russia to invest over $8 billion in Pakistan.
The Pakistani government has authorized its ambassador to Russia to sign the deal. Under the agreement, the Pakistani government will return $93.5 million to Russia within 90 days of the signing and clear pending exporters' claims to the tune of $23.8 million as per the settlement agreements reached on October 6, 2016, and December 27, 2017.
The efforts to sign the deal with Russia were kicked off by the previous government of the PML-N government and the incumbent regime has decided to execute it.
Moscow has conveyed to Islamabad that it would invest $8 billion in Pakistan's energy sector and Pakistan Steel Mills. But according to Russian law, it cannot invest in countries with which it has disputed.
The deal will enable Russia to invest in different sectors in Pakistan, Officials told The Express Tribune.
As the dispute prolonged, some Pakistani companies acquired stay orders from the Sindh Hithe Court (SHC) restraining the NBP from transferring funds of the Russian banks held in its accounts since 1996, which amount to $104.93 million.
Many attempts were made in the past to resolve the dispute but they remained unsuccessful. The failure to timely resolve the dispute adversely affected relations between the two countries. An early amicable settlement between the two countries will thus pave the way for enhanced bilateral political, economic and diplomatic relations.
The high court in its decision on October 4, 2019, allowed an application for the passing of a compromise decree as the parties had reached a settlement agreement outside the court.
This SHC also dismissed the case declaring it “withdrawn unconditionally” with the pending applications. Fateh Jeans was also persuaded but it did not agree to withdraw its cases.
Their cases have already been dismissed by SHC and no appeal has been filed so far by the company.
Therefore, the money in the two NBP accounts of Russia can be disbursed to settle the claims as per the agreements.
The amount maintained in the two accounts is sufficient to pay off $ 93.5 million to Russia as well as clear the pending claims of exporters to the tune of $23.8 million.