Penalty Current Affairs - 2019
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International Arbitration Court has imposed over $5 billion penalty on Pakistan for unlawful denial of a mining lease to a company called Tethyan Copper Company for Reko Diq project in 2011. This penalty on cash-strapped Pakistan is one of the biggest in its history.
About Tethyan Copper Company v/s Pakistan Case
In 2012 Tethyan Copper Company (TCC) had filed claims for international arbitration before World Bank’s International Centre for Settlement of Investment Disputes (ICSID) after Balochistan government rejected a leasing request from company in 2011.
Damage Claims: TTC a joint venture between Chilean mining company Antofagasta and Canada’s Barrick Gold Corporation had claimed 11.43 billion dollars in damages.
Case between Pakistan government and company continued for 7 years.
Arguments by TCC: During August 2010 TCC undertook an extensive and detailed bankable feasibility study that established basis for mine development at Reko Diq and submitted a mining lease application in February 2011, along with an environmental and social impact assessment (SIA) report. Then in November 2011, after Balochistan government summarily rejected application by local operating subsidiary of TCC for mining lease in respect of Reko Diq, the project was stopped.
Way Ahead: Imran Khan, Prime Minister of Pakistan has issued orders for formation of commission to investigate and fix responsibility for massive loss borne by country in Reko Diq Mining case.
About Reko Diq
In Balochi language Reko Diq means sandy peak. It is a small town in Chagai district in Balochistan that lies close to the border with Iran and Afghanistan.
Reko Diq mine is famous for its vast gold and copper (Cu) reserves. It is believed to have the world’s 5th largest gold deposit.
International Centre for Settlement of Investment Disputes (ICSID)
It is an international arbitration institution established in 1966.
It arbitrates for legal dispute resolution and conciliation between international investors.
Parent organization: World Bank Group.
Background: ICSID was established in 1966 by Convention on Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention). It is Headquartered in Washington, D.C., United States.
Tags: Balochistan • International Arbitration Court • International Centre for Settlement of Investment Disputes • Pakistan • Penalty
The Reserve Bank of India (RBI) has imposed a monetary penalty of one crore rupees on State Bank of Travancore, an SBI associate bank for violation of some of its instructions.
The monetary penalty was imposed on State Bank of Travancore for violation of its instructions including reporting of data to Central Repository of Information on Large Credits (CRILC).
Prior to imposing the penalty, RBI had issued a show cause notice to the bank for not having complied with the directions issued by the bank on submission of accurate data to the CRILC.
Finally RBI came to the conclusion that the bank had violated the instructions or guidelines issued from time to time after considering the bank’s reply and information submitted and documents furnished.
Central Repository of Information on Large Credits (CRILC)
It has been established by RBI to collect, store, and disseminate data on all borrowers’ credit exposures. It is mandatory for banks to report all such information under it including classification of an account as Special Mention Accounts (SMA) on all borrowers having aggregate fund-based and non-fund-based exposure of 5 crore rupees and above.