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PLJ 2011 SC 734

Maulana ABDUL HAQ BALOCH & others vs GOVT. OF BALOCHISTAN through

CitationPLJ 2011 SC 734
CourtSupreme Court of Pakistan
Case No.Civil Petition for Leave to Appeal No, 796 of 2007 & CMA No, 4560 &
Date2011-05-25
Judge(s)Iftikhar Muhammad Chaudhry, Ghulam Rabbani, Muhammad Sair Ali
ResultPetition accepted

ORDER

Iftikhar Muhammad Chaudhry, CJ.--Listed matters are pending adjudication in this Court. The subject matter of all the petitions is the right to the exploration and lease of the copper/gold mines etc. in the area of Reko Diq, District Chaghai at Dalbandin in Balochistan Province of Pakistan. The jurisdiction of this Court under Article 185(3) of the Constitution has been invoked in Civil Petition No, 796 of 2007. Other Constitutional Petitions and the miscellaneous applications have been filed under Article 184(3), seeking transparency and merit in the award of the mining lease.

2. The uncontroverted facts that emerge from the concise statements, documents and submissions of the parties are that for the purpose of conducting exploration and development of mineral deposits of gold and copper in the agreed Exploration Area, in District Chagai of the Province of Balochistan, Pakistan, Balochistan Development Authority (BDA) on the approval of the Government of Balochistan (GOB), entered into CHAGAI HILLS EXPLORATION JOINT VENTURE AGREEMENT dated 29th July, 1993 (CHEJVA) with BHP MINERALS INTERNATIONAL EXPLORATION INC (BHP); a foreign company. BDA was to provide administrative support, necessary consents, approvals, NOCs, security clearances etc etc and relaxation of certain Rules of the Balochistan Mining Concession Rules, 1970. BHP was to undertake the work and entire cost of the exploration and infrastructure etc. thereof. The respective Percentage Interests were 25% for BDA and 75% for BHP. The Joint Venture was granted ten Prospecting Licenses (P:Ls) in 1996 for an area of 1000 Sq, Km. BHP carried out reconnaissance and detailed work up to 1999 in these areas and reported large deposits of Copper, Gold etc. at Reko-Diq. The Joint Venture thereafter surrendered 8-P.L's and retained Two P.Ls of Reko-Diq. After the new National Mineral Policy and the enactment of Balochistan Mineral Rules, 2002, a consolidated Exploration License No, EL-5 was granted to the Joint Venture for a defined area of Reko-Diq in 2002 for three years. On two renewals thereof, EL-5 was to remain valid upto 18th February, 2011.

3. During the extended period of EL-5, ADDENDUM NO.1 to the CHEJVA was signed between BDA/GOB and BHP, whereby interalia, Government of Balochistan became Joint Venture partner in CHEJVA with BDA as its Agent. ADDENDUM also permitted transfer or assignment of a party's interests in CHEJWA wholly or partly. Whereon through intermediary corporate instrumentalities, share interest of BHP in CHEJWA was routed and rerouted via Mincor Resources N.L/Tethyan Copper Company Ltd. of Australia (TCC) per the OPTION AGREEMENT/ALLIANCE AGREEMENT. And finally under the NOVATION AGREEMENT OF 2006 JVA was novated to substitute TCC for BHP as a full party with Deed of Waiver and Consent of GOB for such transfer. BHP was thus replaced by TCC in the Joint Venture which became TCC-BDA/GOB GHAGAI HILLS JOINT. VENTURE. The respective Percentage Interests were restated for GOB (25%) and TCC (75%). Antofagasta of Chile and Barrick Gold Corporation of Canada; stated to be amongst the largest companies prospecting for gold and copper in the world, then stepped in and jointly purchased TCC's entire 75% Percentage Interest in the Joint Venture.. Antofagasta ana Barrick Gold; on thus acquiring TCC, carried out the drilling and exploration programme at EL-5 area of Reko-Diq at a claimed expense of millions of US $, with no financial cost burden on GOB/BDA.

4. In 2006, C.P.No, 892/06 was filed by Maulana Abdul Haq etc. in the Balochistan High Court challenging legality of CHEJVA, relaxation of 1970 Mining Rules by GOB and BHP's lukewarm exploration activity. The Government of Balochistan denied illegality of CHEJVA and its alleged contrariness to public interest. This Constitutional Petition was dismissed by the High Court of Balochistan through the impugned judgment dated 26.06.2007. The relaxation of 1970 Rules, acts of GOB/BDA and CHEJVA were held to be legal. Hence CPLA No, 796 of 2007 in this Court against the above judgment.

5. During the pendency of the leave petition, a major development took place. Exploration work including drilling was completed by TCC within the stipulated period. Substantial discoveries of gold and copper etc. were made. The license period expired on 18th of February, 2011. TCC submitted to GOB Feasibility Study Report; a study to ascertain the commercial feasibility of the mining of the resource, treatment of ore obtained in mining operation, expected optimum return, life of the mine, mineable reserves and grade and the results of geological and geophysical investigations etc. The Feasibility Study is admittedly under examination of GOB.

6. The above mentioned feasibility report was offered by the former Advocate General i,e, Mr. Salahuddin Mangel to be exclusively shared with this Court though claiming the same to be sensitive, confidential, highly technical and ordinarily beyond the Court's domain.

7. After the above discovery by TCC, the present litigation attracted general focus and also publicity. Various Petitioners also filed their respective petitions alleging absence of fairness, transparency, and merit in the grant of licence(s) to BHP/TCC and also alleged possible risks to the vital interests of Balochistan and Pakistan in the grant of mining lease to TCC. Before the High Court, GOB had supported the legality of CHEJVA but opted to take a different stand before this Court. On the other hand, BHP and TCC, respectively argued to support CHEJVA, relaxation of 1970 Rules and the grant of licences. TCC also asserted its right under CHEJVA and 2002 Rules to be considerate for and be granted the mining lease with or without the joint venture partner.

8. During the hearing of the matter, TCC formally applied to the Government of Balochistan within the visualized period for the grant of the mining lease under 2002 Rules which statedly recognized the licensee's entitlement to apply for a mining lease on success of the licensee in the exploration.

9. No order has yet been passed or this application by the Government of Balochistan because of the pendency of the present petitions and the restraining order which had been passed by this Court on 03.02.2011 in [he following terms:-- "In view of importance of the case, ........we consider it appropriate at this stage to know the reaction of the respondents through their learned Advocates as to whether it would not be appropriate that the Government of Balochistan through its competent authority may postpone its decision of granting mining lease or otherwise to the Companies/claimants of holders of EL-5 to wait for the result/outcome of these proceedings.

2. Mr. Khalid Anwar, Sr. ASC has stand that as far as the parties interested in obtaining the mining lease are concerned, they have only to submit an application to the Government of Balochistan before 19.02.2011 and then it is for the Government of Balochistan through its competent authority to take the decision to consider the request or whatever position may be, therefore, he and other learned Advocates associated with him, M/s. Abdul Hafeez Pirzada, Fakhruddin G. Ibrahim and Barrister Sajid Zahid have no objection if order is passed to the effect that the Government of Balochistan may postpone decision on the application(s) submitted for mining lease till the decision/outcome of the instant proceedings without prejudice to their legal rights. Dr. Salahuddin Mengal, learned Advocate General, Balochistan has stated that the Government of Balochistan has instructed him to make the statement that so far it has not received any application for grant of mining lease from any of the companies. However, it would not dispok of the application, if submitted until the decision of this Court subject to all just exceptions. Similar stand has been taken by Ch. Mazhar Ali, learned Deputy Attorney General, who is representing the Government of Pakistan.

3. in view of the statement so made by the learned counsel for the parties, it is declared that no decision shall be taken by the Government of 'Balochistan in respect of the grant of the mining lease on the application submitted by any of the parties without prejudice to their legal rights till the decision of the instant proceedings."

10.The case was thereafter heard on 15.02.2011, 05.04.2011, 24.04.2011 and 25.05.2011.

11.Feasibility Study having been submitted, TCC is asserting its entitlement to obtain a decision from BOD on its application for the grant of mining lease. The claim has been contested by the petitioners. GOB while persisting with its privilege to the detailed scrutiny of Feasibility Report, reiterates its competence under 2002 Rules to decide upon TCC's application. We also note that by CM.A.No, 112 of 2011 Government of Balochistan through Secretary Mines and Minerals Development Department had importantly made a prayer that we would like to reproduce hereunder for GOB's stand and emphasis therein spelt out:-- "Since the feasibility study report has been 'submitted by Respondent No, 4 for consideration, the review of which is under process by the Respondent No, 1, and since the mineral agreement is yet to be signed between Respondent No, 1 & 4 wherein details and modalities will be decided strictly in accordance with the spirit of B.M.R. 2002 and incorporated in the mineral agreement to be executed, therefore the instant petition for leave to appeal filed by the petitioners may kindly be disposed off'.

12.In view of the above and on hearing the learned counsel for the parties at length, we inquired from the learned counsel for the petitioners, the respondents, the interveners, GOB/BDA and the learned Attorney General for Pakistan as to whether the restraining order dated 3rd February, 2011 be vacated. All of them responded affirmatively.

13.We are in agreement with the learned counsel for the parties and are of the opinion that at this stage it will not be proper for us to inquire into the Feasibility Study Report or to rule upon the entitlement of TCC to the mining lease. The reason, is that under the governing law and 2002 Rules, this matter falls exclusively within the domain of the Government of Balochistan and the Government is also seized of the Feasibility Report as well as the application of TCC. All the parties have expressly admitted that the Government of Balochistan being the competent authority in this matter, should in due discharge of its obligation, make a decision on TCC's application impartially, objectively and in accordance with law and thus .accept its legal responsibility thereof. In this view of the matter, it will not be proper for us to pre-empt the decision of the Government of Balochistan by entering into the merits of the case at this juncture.

14. As such accepting the consensus of all the learned counsel and for the reasons above recorded.

The restraining order dated 03.2.2011 is recalled. The competent authority in the Government of Balochistan shall proceed to expeditiously decide TCC's application for the grant of mining lease transparently and fairly in accordance with the law and the rules. In so doing the Government of Balochistan shall not be influenced in any manner whatsoever by the pendency of these proceedings or by the orders therein passed by this Court. Upon decision of the matter by the Government of Balochistan, the learned Advocate General of the Province shall inform the Registrar of this Court forthwith. The petitions shall remain pending on the file of this Court until the decision of the application by the, competent authority.

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