AG, IT ministry differ on legal recourse for Etisalat if SCO launches cellular firm

News Source: Dawn

Writer: Ikram Junaidi

ISLAMABAD: The Ministry of Information Technology and Telecom (MITT) and the attorney general (AG) on Monday disagreed on the legal recourse available to Etisalat if the Special Communication Organisation (SCO) is allowed to launch a cellular company, in violation of the agreement with the international telecommunications company.

During a meeting of a subcommittee of the Senate Standing Committee of Delegated Legislation, MITT warned that Pakistan maybe drawn into another international arbitration and face huge financial losses if it allows SCO to launch a cellular company.

MITT Additional Secretary Jamal Nasir said that though the attorney general has suggested that the agreement signed with Etisalat in 2006 should be cancelled or ignored, the fallout of such a step should also be considered.

“Pakistan has been facing a number of international arbitration cases and huge penalties have been imposed when the decisions were against Pakistan. If we cancel or violate the agreement with Etisalat, the company will definitely contact the international court,” he said.

SCO is a public sector organisation established in 1976 to develop, operate and maintain telecom services in Azad Jammu and Kashmir and Gilgit Baltistan. It is now demanding an amendment to the act to allow it to work across the country and launch a country-wide cell phone service.

The MITT, on the other hand, says that the government had in 2006 signed an agreement according to which no local company is to be given a licence which will affect the financial interests of Etisalat, which has shares in the Pakistan Telecommunication Company (PTCL).

Mr Nasir said the repercussions in case Pakistan loses in international arbitration should be considered as fines will be paid from the exchequer and suggested the issue be raised in parliament.

Attorney General Ashtar Ausaf agreed that a number of wrong decisions were taken in the past due to which heavy fines were imposed on Pakistan.

“However, I have considered the case of Etisalat in detail to see if we will expose ourselves to international arbitration. The agreement is against the interests of the country as it gives immunity against the decision of the federal cabinet. Clauses of the agreement restrict local institutions from [doing] business. So, I have suggested that the agreement be cancelled,” he said.

“Etisalat cannot take us into international arbitration because it has violated the agreement with the Pakistani government and is not paying its due to the government. I am convinced that we can face this issue in any court,” Mr Ausaf said.

He said there is no impediment in the way of processing an application pending with the Pakistan Telecommunication Authority (PTA) for the grant of a licence, which will further the cause of national security provided it is confined to the business being carried out by the SCO.

Committee chairman Senator Mohammad Daud Khan Achakzai said Pakistan should take the matter in international arbitration if Etisalat has been violating the agreement.

An SCO representative said PTCL has been running the business of landline phones and SCO has been considering launching a cellular company so the financial interests of Etisalat will not be affected. He offered to give an undertaking that the SCO will not launch fix-line service across Pakistan.

MITT Joint Secretary Khalid Gardezi said his ministry did not doubt the wisdom of the attorney general and was only stating the possible implications. However, if the committee wants to do legislation, it should and the ministry will implement it.

However, the ministry’s member legal, Amina Sohail said the PTA and Privatization Committee should also be contacted.

“PTCL is an integrated operator and giving SCO a licence will create problems as it will affect its financial interests. According to the agreement, the Government of Pakistan had to transfer 33 properties to Etisalat and the company had to pay the government. However, the properties were not transferred in Etisalat’s name and so the funds were not given to the government,” she said.

Mr Ausaf said it is unfortunate that in Pakistan, departments criticise and try to put responsibility on one another.

“We should give the message that we are one. Moreover, we should avoid giving opinions without studying the agreements,” he said.

Mr Achakzai decided to call the PTA for the next meeting to be held next week to get its input on the issue.

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