The Pakistani government has recruited the expertise of three esteemed international law firms to represent the country in its legal dispute with Iran concerning the Iran-Pakistan gas pipeline project. Sources from the Law Division and the Attorney General’s Office have confirmed that the government has enlisted White & Case, Three Crowns, and Willkie Farr Gallagher, along with a leading Australian counsel specializing in oil and gas infrastructure law.
The legal teams have been briefed on the specifics of the Iran-Pakistan (IP) gas pipeline project and the obstacles that have prevented its completion. On October 18, 2024, Pakistan submitted its legal representation details to the French Court of Arbitration.
As part of the arbitration process, Pakistan will appoint one arbitrator, while Iran will choose another. Both nations will collaboratively select a third arbitrator to complete the tribunal necessary for the case to proceed.
Once the tribunal is established, the Arbitration Court is anticipated to issue a ruling within a year. The dispute intensified after Iran issued a final notice to Pakistan in August 2024, indicating that it had no choice but to take legal action due to Pakistan’s failure to construct the pipeline by the September deadline.
Iran has filed a case in the Paris Court of Arbitration, claiming that Pakistan has not completed its section of the pipeline or met the agreed intake of 750 million cubic feet of gas per day.
The Iran-Pakistan gas pipeline project has faced significant delays since 2014, primarily attributed to proposed U.S. sanctions. The Gas Sales Purchase Agreement (GSPA), signed in 2009 under French law, does not acknowledge these sanctions.
In September 2019, Pakistan’s Inter-State Gas Systems (ISGS) and Iran’s National Iranian Gas Company (NIGC) amended their contract, allowing Iran to refrain from pursuing international legal action over construction delays if Pakistan completed its pipeline by 2024.
According to the revised agreement, Pakistan was to finish its portion of the pipeline by February-March 2024. However, after an additional 180-day extension lapsed in September 2024 without any progress, Iran issued its final notice.
Under French law, if Iran did not initiate arbitration by the September deadline, it would forfeit its right to pursue legal action. Iran had previously sent a second legal notice to Pakistan in late 2022, demanding the completion of its pipeline segment by February-March 2024 or face potential penalties amounting to billions of dollars.
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