PTBP Web Desk
The National Grid Company (NGC) — formerly known as the National Transmission and Despatch Company (NTDC) — has called on the federal government to take an active role in resolving a long-standing payment dispute with the Iranian firm GAM ARAK Industrial Co. The company is urging that the issue be addressed through a committee already working on out-of-court settlements under the Iran-Pakistan Gas Project.
The conflict stems from an arbitral award issued by the International Chamber of Commerce (ICC) in Arbitration Case No. 2272412F IAYZ, seated in Paris. The award was originally rendered on April 21, 2020, followed by a corrective addendum on July 28, 2020.
According to the latest financial calculations, GAM ARAK owes approximately $3.658 million — an amount that includes accrued interest — as of June 30, 2025. In local currency terms, the liability stands at Rs 1.039 billion after accounting for delayed payment charges.
Despite repeated reminders and negotiation attempts, GAM ARAK has not complied with the ICC’s decision. NGC’s Chief Law Officer (CLO) confirmed that legal counsel has been engaged both domestically and internationally to ensure Pakistan’s national and public interests are safeguarded.
“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,” the CLO said.
The company has welcomed assurances from the Iranian Embassy in Islamabad, which has pledged to engage GAM ARAK through the Chambers of Commerce in Iran. This development is viewed as a positive and practical step toward compliance.
In line with Board of Directors directives to prioritize amicable resolution, NGC has outlined several strategies involving diplomatic engagement and bilateral cooperation:
1. Government-to-Government Dialogue with TAVANIR
NGC, working with Pakistan’s Ministry of Energy and Economic Affairs Division, plans to reach out to TAVANIR, Iran’s national energy company. This engagement would aim to secure payment through official Iranian energy sector channels while promoting compliance with the arbitral award.
2. Embassy of Pakistan in Tehran’s Role
Pakistan’s embassy in Tehran could directly engage Iranian authorities and GAM ARAK to facilitate timely compliance, accelerate communication, and ensure a constructive settlement process.
3. Parallel Communication Channels
NGC recommends that efforts also run through the Iranian Embassy in Islamabad and the Iranian Chambers of Commerce to maximize outreach and maintain steady pressure for resolution.
4. Prime Minister’s Notified Committee
The company has highlighted the significance of involving the Prime Minister’s committee on out-of-court settlements under the Iran-Pakistan Gas Project. This platform could offer additional opportunities for cooperation and a mutually beneficial outcome.
NGC’s detailed report to the federal government and the Iranian consulate outlines the final award amount as:
• Rs 885,300,369 and $3,116,158 initially
• Rs 1,039,378,822 and $3,658,496 after including delayed payment penalties
The company believes that transparency in communicating these figures will strengthen the case for recovery.
Appeal for Continued Cooperation
In a formal letter, the CLO urged the Iranian Embassy to maintain close coordination on the matter:
“We solicit the Iranian embassy’s continued coordination, confident that its engagement will promote constructive dialogue, encourage GAM ARAK’s compliance, and secure a timely resolution beneficial to all parties concerned.”
The dispute highlights the complexities of cross-border commercial arbitration and the importance of diplomatic channels in enforcing awards. Successful resolution could set a positive precedent for Pakistan’s international commercial relations and demonstrate the country’s ability to protect its financial and contractual rights.
For Pakistan, ensuring recovery of the funds is not only about safeguarding public money but also about reinforcing investor confidence in the country’s ability to enforce commercial agreements.
