5 days ago
- Business
- Business Recorder
Arbitral award payment: NGC calls for resolving issue with Iranian firm
ISLAMABAD: The National Grid Company (NGC), formerly known as NTDC, has proposed that the federal government resolve the outstanding arbitral award payment issue with the Iranian company GAM ARAK through a committee currently working on an out-of-court settlement under the Iran-Pakistan Gas Project, sources told Business Recorder.
According to sources, following a meeting held on July 17, 2025, regarding the outstanding payment under a foreign arbitral award rendered in favor of NGC against GAM ARAK Industrial Co, NGC has submitted a detailed report to the government in Islamabad. The report is intended to assist the Iranian Consulate in facilitating an amicable resolution.
The matter concerns the enforcement of an award issued by the International Chamber of Commerce (ICC) in Arbitration Case No. 2272412F IAYZ, seated in Paris, on April 21, 2020, with a corrective addendum issued on July 28, 2020. As per the latest financial calculations, the total amount due — including accrued interest — stands at approximately $3.658 million as of June 30, 2025.
Despite multiple reminders and negotiation efforts, GAM ARAK has yet to honor the award, NGC stated. Backed by legal counsel, the National Grid Company of Pakistan remains committed to safeguarding national and public interests through continued engagement focused on a negotiated settlement.
BMP hails $10bn Pakistan-Iran trade target, demands removal of trade barriers
'We highly appreciate the constructive nature of our meeting, during which the complexities of the matter and the legal avenues pursued both domestically and internationally were transparently discussed,' said the Chief Law Officer of NGC.
The company further noted that assurances received from the Iranian Embassy in Islamabad — regarding efforts to engage GAM ARAK via the Chambers of Commerce in Iran — represent a positive and practical step toward compliance.
In line with Board of Directors directives to prioritize amicable resolution, NGC has highlighted specific settlement avenues related directly to Iranian companies and governmental authorities, based on the latest legal and strategic framework: (i) diplomatic engagement through Iranian Ministries: NGC, via Pakistan's Ministry of Energy and Economic Affairs Division, intends to approach TAVANIR, Iran's national energy company.
This government-to-government dialogue is aimed at facilitating award recovery through official Iranian energy authorities, fostering cooperation and compliance with the arbitral decision; (ii) the Embassy of Pakistan in Tehran is strategically positioned to assist in engaging relevant Iranian authorities and GAM ARAK directly.
This diplomatic channel is critical to encourage timely compliance, expedite communication, and promote amicable settlement through Iranian governmental and commercial contacts; (iii) additionally, it has been recommended that parallel communications be initiated through Iranian Embassy in Islamabad and other diplomatic channels, including the Iranian Chambers of Commerce, to maximize outreach and pressure for compliance; and (iv) NGC has also noted the significance of the Prime Minister's notified committee on the out of Court Settlement under the Iran-Pakistan Gas Project. Engagement through this committee could present additional avenues to foster mutual cooperation and facilitate settlement outcomes beneficial to both parties.
NGC argued that to support Iranian embassy's ongoing efforts and ensure full transparency, detailed summary of final award of June 30, 2025 is Rs 885,300,369 and $ 3,116,158 but after addition of delayed payment, cumulative amount is Rs 1,039,378,822 and $ 3,658,496.
'We solicit Iranian embassy's continued coordination on this matter, confident that its engagement will promote constructive dialogue, encourage GAM ARAK'S compliance, and secure a timely resolution beneficial to all parties concerned,' said CLO NGC in the letter.
Copyright Business Recorder, 2025
