On 29th July 1993, BHP Minerals International Exploration Inc. (BHP) and the Balochistan Development Authority (BDA), a statutory corporation of the Province of Balochistan in Pakistan, entered into a Chagai Hills Exploration Joint Venture Agreement (CHEJVA) for exploration of deposits of gold, copper, and other minerals in the Chagai district of Balochistan. However, pursuant to two subsequent contracts, (i) an option Agreement and (ii) an Alliance Agreement with BHP, the Claimant, Tethyan Copper Company Pty Limited, a company constituted and registered under the laws of Australia and owned in equal shares by Antofagasta Plc, a company incorporated in the United Kingdom with its headquarters in Chile, and Barrick Gold Corporation, a company incorporated in Canada, took over from BHP the exploration activities in the Chagai Hills exploration area.
On 1st April 2006, the Claimant also became party to the Joint Venture pursuant to a Novation Agreement with the Government of Balochistan and BHP and thereafter replaced BHP as party to the Joint Venture.
From 2006, the Claimant together with its local subsidiary carried out an exploration program as envisaged by Clause 7 of the CHEJVA in the Exploration Area delineated in Schedule B of the CHEJVA known as ‘Reko Diq’ which includes the deposits Tanjeel (H4) and the Western Porphyries (H13, H14 and H15).
Under the Balochistan Mineral Rules 2002, which is the statutory legal regime that regulates the exploration of mining activities, the Technical Head of the Directorate General of Mines and Minerals is to serve as the Licensing Authority for the grant of mineral titles and concessions.
On 15th February 2011, the Claimant submitted to the Licensing Authority an Application for a Mining Lease in respect of a portion of Reko Diq of just less than 100 square km situated within the boundaries of License EL-5 that had been granted originally to BHP under CHEJVA. The Application was supported by the Feasibility Study and other documents as required by the Balochistan Mineral Rules 2002. However, on 21st September 2011 the Licensing Authority issued a notice of its intent to reject the Claimant’s Application as “not satisfactory” and granted the Claimant 30 days to submit a response.
The Claimant submitted its Response to the Notice on 19th October 2011 as well as a Notice of Dispute under CHEJVA to the Government of Balochistan alleging inter alia the expropriation of its investments under the Australia-Pakistan BIT in the event of denial of the Mining Lease.
By order of 15th November 2011, the Licensing Authority nonetheless rejected the Claimant’s Application for a Mining Lease and a dispute arose as regards the refusal of grant of a Mining Lease.
The Parties tried but failed to resolve their dispute through negotiations pursuant to Article 13 (1) of the Australia-Pakistan BIT, thereafter which the Claimant submitted its dispute to the International Centre for Settlement of Investment Disputes (ICSID) and sought interim relief from the arbitral tribunal requesting the Tribunal to make an order of taking provisional measures to inter alia refrain the Government of Balochistan from takings steps to develop, sell, lease, and transfer of Reko Diq mining area and from breaching the confidentiality provisions of Tethyan Copper Company’s feasibility study.
The tribunal observed that it had prima facie jurisdiction under Article 25(1) of ICSID and Article 13 of Australia-Pakistan BIT as well as the authority to order provisional measures under Article 47 of the ICSID Convention. However, in order to do so the Claimant must satisfy the Tribunal that (i) a right exists and (ii) the circumstances require that the provisional measures be ordered to preserve such a right, in that, provisional measures are likely to be granted where the situation is one of urgency and the requested measures are necessary to preserve a party’s right from irreparable harm.
The Claimant succeeded in establishing a prima facie case that it owned a legally protected interest. However, as regards the circumstances meriting the grant of provisional measures, namely urgency, necessity and irreparable harm, the Tribunal was of the view that there was insufficient evidence on record to show that provisional measures were necessary to avoid irreparable harm. The Tribunal based this assertion on the assurances of the Pakistani officials that they do not presently intend to expand their mining activities beyond deposit H4 and the fact that harmful impacts such as environmental degradation, poor labour conditions or diminished welfare due to inexpert operations of the Balochistan government were all speculative in nature and that the Claimant failed to prove or provide sufficient evidence for these allegations.
Accordingly, the Tribunal rejected the Claimant’s request for grant of provisional measures, but observed that the Respondent (Islamic Republic of Pakistan) would nevertheless be required to immediately inform the Tribunal and the Claimants of any change to their present intention to (i) implement the H4 work plan, (ii) not to expand its mining activities to H14 and/or H15 or to any other deposit within the License EL-5 and (iii) not to give any rights in this regard to any third party. In addition the Respondent is required to further inform the Tribunal and the Claimants on a regular basis about its specific plans and activities with respect to deposit H4. The decision as to costs was reserved for a later stage of the arbitral proceedings.
Although, the Tribunal did not make a provisional measure order as requested by the Claimant, in that the Tribunal did not refrain the government of Balochistan from taking steps to develop, sell, lease, and transfer of Reko Diq mining area and from breaching the confidentiality provisions of Tethyan Copper Company’s feasibility study. It nonetheless, imposed an obligation upon the State of Pakistan to ‘immediately inform’ the Tribunal as well as the Claimant of any change of intent as regards implementation of the H4 work plan, the expanding of its mining activities to H14 and/or H15 or to any other deposit within the License EL-5 and to give any rights in this regard to any third party. The freedom of the State as regards the mining in Reko Diq and areas adjacent to it therefore still remains tainted and subject to the scrutiny of ICSID. Hence, the possibility of ICSID taking provisional measures such as those requested by the Claimant, still remains should there be any change in the government’s policy and stance on the matter.
 See Para 116. The Decision is available at https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&docId=DC2752_En&caseId=C1980.
 See Para 151.
 See Para 150.
 See Paras 151-154.