President accords his assent to Arbitration (International Investment Disputes) Bill, 2011

Islamabad; April 28, 2011: Ina major move to reassure international investors about the security of their investment President Asif Ali Zardari today accorded his assent by signing “Arbitration (International Investment Disputes) Bill, 2011”   into a law during a special ceremony held here at the Aiwan-e-Sadr today.

 

The signing ceremony was attended among others by federal ministers, members of Parliament, federal Secretaries, Presidents Chambers of Commerce & Industry, President Overseas Chamber of Commerce, President Women Chambers of commerce & industry, representatives of business community, foreign & local investors and other officials.

 

Arbitration (International Investment Disputes) Bill, 2011 was passed by National Assembly on 5th November 2010 and the Senate on 1st April, 2011. It became a law today after the President formally gave his assent to it.

 

 “This is a giant leap forward to create confidence in foreign investors and bring transparency in the settlement of investment disputes “, the President said on the occasion adding, “I wish to congratulate the Parliament for passing this important legislation”. He said that the government has already announced liberal incentives package for foreign & local investors and expressed the hope that the current legislation would prove instrumental in attracting FDI and further promote investment climate in the country.

 

Spokesperson to the President Mr. Farhatullah Babar said that the government has already signed and ratified the international convention on settlement of investment disputes between the states and nationals of other countries.  Domestic legislation was a pre- requisite for benefiting from the provisions of the convention, he said.

 

The convention envisages establishment of an international centre for settlement of investment disputes under the auspices of the World Bank. It also envisages constitution of conciliation commission and arbitral tribunal.

 

The International Convention on Settlement of Investment Disputes (ICSID) facilitates conciliation and arbitration on investment disputes between the contracting states and nationals of other contracting states. The seat of the centre at the principal office for International Bank for Reconstruction and Development (IBRD) having an administrative council and a secretariat maintains a panel of conciliators and arbitrators.

 

Any contracting state may renounce the convention by written notice to the depositary of this convention which will take effect 6 months after the receipt of such notice.  The jurisdiction of the centre extends to any legal dispute arising directly out of an investment between a contracting state and a national of another contracting state.

 

The spokesperson said that with this new legislation a major disincentive for foreign investors had been removed who will now feel reassured to invest in Pakistan. He said that the enactment of the law was part of the President’s plan of incentivisation and offer new incentives to address the country’s economic and investment problem. The incentivization of foreign remittances had already resulted in increasing Pakistan’s earning from foreign remittances from a little over 6 billion US dollars in 2007 to an expected almost 11 billion US dollars this year, he said.