ANWAR ZAHEER JAMALI, J. - This appeal, by leave the Court, vide order dated 17.2.2011, assails the judgment dated 14.7.2010, in writ petition No. 3708 of 2009 (re: Dewan Petroleum (Pvt.) Limited v.
Government of Pakistan, etc.), passed by learned single Judge in Chambers of Lahore High Court, Rawalpindi Bench, whereby, the said petition filed by respondent No. 1 herein, agitating their grievance against the appellants and Respondent No. 2 for delaying/non-fixation of well-based price of natural gas supplied by them from Salsabil (Rodho) Safeed Koh Gas Field in terms of Article 10.2(f) of PCA dated 18.1.2002 and seeking directions against the Ministry of Petroleum and Natural Resources etc. To fix the gas price from the commencement date of gas supplies as per the correct interpretation of Safed Koh Petroleum Concession Agreement (PCA) and as per the binding opinion/view/findings of Attorney General for Pakistan dated 13.11.2007 ("the Opinion") without further delay, was allowed. This prayer was based on the premise that such opinion in their favour was binding on all the respondents in the said petition.
2. As it appears from the record, initially when the writ petition came up for hearing before learned Single Judge in Lahore High Court, he did not care to issue its notice of hearing to the opposite parties and decided the same in favour of respondent No. 1, vide his order dated 14.12.2009.
However, in ICA No. 219 of 2009 preferred by the present appellants against the said order, with the consent of parties counsel that order was set aside and the case was remanded before the learned single Judge in Lahore High Court for hearing the petition afresh, after affording the respondents therein an opportunity of submitting their written statement along with necessary documents, as they may feel necessary to resist the claim of petitioner.
3. In their reply to the said writ pennon filed by the appellants before the Lahore High Court on 23.1.2010, besides challenging the maintainability of the petition on various legal grounds, whole claim of respondent No. 1 based on their own interpretation of Article 10.2(f) of PCA qua the opinion of Attorney General for Pakistan dated 13.11.2007, was strongly disputed and denied being result of erroneous interpretation of the said Article and the opinion of Attorney General for Pakistan, having sanctity or binding effect on them.
4. It was in the above background that in the post remand proceedings on 14.7.2010 impugned judgment Was passed by the same leamed single Judge of Lahore High Court in favour of respondent No. 1, precisely, for the reason that the Opinion of the Attorney General for Pakistan (AG) dated 13.11.2007 relating to the interpretation of Article 10.2(f) was approved/accepted by him as a valid and legal settlement between the parties under Article 28.1 of PCA which was made binding on the appellants and respondent No. 2, and directed to be implemented at the earliest.
5. Mr. Abid Hasan Minto, learned Sr. ASC, for the appellants, contended with vehemence that, as he will be able to unfold hereinafter, obtaining the Opinion of Attorney General for Pakistan dated 13.11.2007, was a staged dramavat the behest of respondent No. 1, who, now finding it convenient for them, are trying to sidetrack the whole controversy to achieve their goal through such shortcut. He further contended that invoking the writ jurisdiction of the Lahore High Court, for enforcement of such Opinion, primarily relating to the issue of violating the terms and conditions of an agreement
(PCA) between the appellants and respondent No. 1 was improper and unwarranted by law for many reasons. The petition was also not maintainable, on the ground that it involved disputed questions of fact in the context of interpretation of relevant Article 10.2(f) of the PCA, but the learned Single Judge, while passing his impugned judgment, did not advert to these legal aspects of the case in its true perspective and thus gave undue weight to the Opinion of Attorney General for Pakistan, though factually and legally it was incorrect; beyond the scope of Article 28.1 of PCA and had also no legal value or binding effect on the appellants.
6. In order to demonstrate the background of so- called proceedings before the Attorney General for Pakistan and his conduct, leamed Sr. ASC made detailed reference of various documents placed on record with this appeal to show that by asserting undue influence and authority of certain High ranking government officials, which respondent Nor 1 could manage, this whole move was initiated from the office of the Prime Minister of Pakistan, though having no role to play in the dispute between the Ministry of Petroleum and Natural Resources on the one hand and a private company/respondent No. 1 on the other, which fact in itself was sufficient to show how the said Ministry (appellant No. 1) was being unnecessarily harassed and unlawfully pressurized by respondent No. 1 to achieve their desired results, In this regard, Mr. Minto also mentioned that despite initiation of this move through the Prime Minister Secretariat and also some correspondence from the President House the matter remained dormant for quite some time in the office of the then Attorney General for Pakistan for want of relevant record or legal Impropriety, but soon after the nomination of incumbent Attorney General for Pakistan, things in his office started moving swiftly at the behest of respondent No. 1, without any involvement either from the Ministry of Law, Justice and Parliamentary Affairs or the appellants, as evident from the very contents of the Opinion of Attorney General for Pakistan Under his signatures, will show that it is not only devoid of valid reasons in support thereof, but looking to its language, serious doubts are cast upon the authenticity of this Opinion as to whether it was authored by the Attorney General himself; containing no reasons, except in paragraph 5 to the extent that the Attorney General was able to find more merits in the stand taken by respondent No. 1 then the Federation of Pakistan. Again, making reference to the opening part of this Opinion, he pointed out that it was outcome of some meetings between the representative of respondent No. 1 and the Attorney General for Pakistan which were arranged behind the back of the appellants and the concerned Ministry in a hurried manner; in fact, it was not even based on any request for such opinion/advice solicited by the Ministry of Law, Justice and Parliamentary Affairs from the Attorney General for Pakistan, in terms of Rule 14(2) of the Rules of Business, 1973, therefore,-it had no legal sanctity or binding effect on the appellants.
7. In order to meet the objection raised by respondent No. 1 as to the maintainability of this appeal without first availing the remedy of ICA before a Division Bench of the Lahore High Court, learned Sr.
ASC contended that it was a practice followed by the Courts in order to regulate its proceedings, but as held in various judgments of the apex Court, it would not be fatal nor would it bar its jurisdiction in entertaining such petition/appeal directly in exercise of its jurisdiction under Article 185(3) of the Constitution against the order of learned Single Judge passed in a writ petition. To fortify his last submission, Mr. Minto placed reliance upon the following cases:--
(i) Shohrat Bano v. Ismail Dada Adam Soomar (1968 SCM R 574)
(ii) Commissioner of Income Tax v. Media Network (PLD 2006 S.C. 787) and
(iii) Pakistan Telecommunication Co. Ltd. v. Iqbal A/as/r (PLD 2011 S.C. 132).
In the 1st case of Mst. Shohrat Bano (supra), a five Members Bench of apex Court, with reference to Articles 158 & 160 of the Constitution of Pakistan, 1962, observed that non-availing of remedy of Letters Patent against the order of learned Single Judge would not take away the right to appeal to Supreme Court accruing to the appellant as of right against the order of Single Judge, In the 2nd case of Commissioner of Income Tax (supra), the provisions of Section 3 of Law Reforms Ordinance (XII of 1972) were examined and it was held that non-filing of Intra-Court appeal will not be fatal, though the Supreme Court insists that the petitioner should avail the remedy of Intra-Court Appeal in the first instance, as this is a rule of practice for regulating the exercise of discretion which does not oust or abridge the jurisdiction of the Supreme Court, therefore, Supreme Court in certain exceptional circumstance can entertain petitions or as the case may be, direct appeals, even where the remedy of Intra-Court, Appeal under Section 3 of Law Reforms Ordinance, 1972 was not availed by a party, In the 3rd cited case of Pakistan Tele-communication Limited, the earlier view, as summarized above, was affirmed with the observations that requirement of filing Intra- Court Appeal was a rule of practice for regulating exercise of discretion, which does oust or abridge the jurisdiction of the Supreme Court, and in certain exceptional circumstances Supreme Court can entertain petitions, or as the case may be, direct appeal even where the remedy of Intra-Court Appeal under Section 3 of the Law Reforms Ordinance, 1972 was not availed by a party.
8. Reverting to other factual and legal aspects of the case, learned Sr. ASC for the appellants made reference to the contents of PCA dated 18.1.2002, particularly, its relevant Article 10.2(f), about the mode of ^determining wellhead value/price of gas supplied from Safed Koh/Salsabil Gas Field, and Article 28.1 (ibid) relating to arbitration. According to learned Sr. ASC, in the wake of availability of clear remedy of arbitration in terms of Article 28.1 (ibid), there was no occasion for the respondent No. 1 to unilaterally have recourse to any other mode for settlement, that too in a different background and manner, than the one prescribed/permitted under the PCA, thereby managing the Opinion of Attorney General for Pakistan in a one-sided manner. As to the interpretation of Article 10.2(f) (ibid) his submission was that determining wellhead price of natural gas was not as simple a proposition as claimed by. Respondent No. 1 or contained in the so-called Opinion of Attorney General for Pakistan dated 13.11.2007. The respondent No. 1 were never serious, in getting this issue resolved through the concerned Ministry, in a just, fair, equitable and lawful manner, rather they exercised their undue influence for dictating their own terms, which too contrary to the relevant Articles and sprit of PCA. To add force to his submissions in this regard he also made reference to several other documents placed on record, showing divergent views/interpretations of Article 10.2(f), advanced by some technical as well as legal experts and categorical denial of the appellants from accepting the interpretation in favour of respondents, as contained in the opinion of Attorney General of Pakistan, as neither it fell within the scope of "amicable settlement" nor "arbitration", for which specific procedure is provided under Article 28.1 of the PCA. Here, to highlight the point of view of the appellants as regards the interpretation of Article 10.2(f) he also made reference of para 10 of the detailed letter dated 21.11.2006 issued under the signatures of Mr. Ahmad Waqar, Secretary, Ministry of Petroleum and Natural Resources, Government of Pakistan, addressed to the Secretary Ministry of Law and Justice, which leads as under:- "10. In view of the above, the Ministry is of the view that for natural gas price, Sliding Scale discount based on C&F prices of import crude oils should be applied prior to applying Zone discount for the following reasons:-
(a) The government has applied same formula for calculation of gas price in several other similar gas sales cases, and it has been accepted by other producers after careful evaluation by them,, resulting in the creation of a precedent in law, from which the government cannot deviate in just one case, especially when it has a different interpretation of this gas price calculation. A very important recent development in the Ministry is the signing of a similar Gas Sales Agreement with joint venture led by Hungarian multinational company MOL by the government on 8-11-2006 on the same Gas Price calculation as the Ministry has been applying.
(b) If the Marker Price is calculated first, then the sliding discounts cannot be calculated on the C&F price, as it would no longer remain the C&F price.
(C) M/s. DPL itself worked out gas price on similar formula of gas price in its development plan submitted for approval of the Government and its current interpretation should be treated as an after-thought (A copy of relevant parts of the development plan is placed at Attachment-VII).
(d) The Ministry had engaged an international consultant namely IHS of UK, who also came up with the same interpretation for calculation of gas pricing. While reviewing the Policy. (Attachment-VIII).
(e) the industry's representative body namely PPEPCA also presented the same interpretation as is done by the Ministry (Attachment-IX).
(f) Even independent investment consultants have been issuing advice to their clients on the basis of gas price formula as is done by the Ministry (Attachment-X).
(g) If M/s. DPL interpretation is accepted then it works against the fabric of the Policy, as it results in a uniform price for all Zones after US$ 50 BBI crude oil price while the Policy aims at providing incentives for exploration in under-explored areas."
9. Mr. Abid Hassan Minto further contended that admittedly respondent No. 1 except their oral assertion, had not submitted any written undertaking/consent with the appellants or before any authority that any opinion from the office of Attorney General for Pakistan will be binding on them, which, in other words, means that they were holding all the trump-cards in their own hands so ais to use them as per their suitability, and it was in this background of the matter that even as required by rule 14(2) of the Rules of Business, 1973, no initiative was taken for this purpose from the Ministry of Law, Justice and Parliamentary Affairs, Government of Pakistan, but contrary to it a mode of direct communication was adopted with the office of Attorney General through some, selected persons in the Prime Minister Secretariat and the President House, having otherwise no lawful status to indulge in such activities prejudicial to the interest of the Federation and the exchequer. He criticized the impugned judgment of the learned Single Judge for the reason that the same was passed on presumption and assumptions rather than looking at the ground realities forming the background of such dispute between the parties; ignoring the fact that so-called Opinion of the Attorney General relied upon by respondent No. 1 was not an opinion in terms of Rule 14(1) of the Rules of Business, 1973, having no recourse to the procedure prescribed for this purpose, as also evident from the contents of the letter of the Opinion itself. Further, dilating upon the Opinion of the Attorney General dated 13.11.2007, he stressed that even if it is presumed to be an opinion/advice from his office in terms of Rule 14(3) of the Rules of Business, 1973, it was an internal affair of the Federation, whether it opts to concur/agree or follow such opinion/advice or to discard it, having no binding force in terms of Article 100 of the Constitution. Lastly, in-between the lines, Mr. Mintc also voiced and impressed upon the unfair conduct of respondent No. 1 in managing these things in their favour, instead of following proper legal course in terms of RCA as contemplated under Article 28.1 of the PCA dated 18.1.2002 or the subsequent agreement dated 23.1.2006. He concluded his submissions with the request that the impugned judgment may be set aside, leaving it open for the parties to follow appropriate legal course for redressal of their grievance, if any, against each other before the proper forum.
10. Maulvi Anwarl-uHaq, learned Attorney General for Pakistan, on notice, also made his brief submissions in the matter, during which he expressed his reservations; firstly, about the merits of the Opinion of Attorney General for Pakistan dated 13.11.2007, particularly, in the background and the manner in which it was procured by respondent No. 1, and secondly, on the legal points that the instant Opinion sought from the office of Attorney General was neither in conformity with the requirement of Rule 14 of the Rules of Business,. 1973 nor it could be treated as an opinion/advice in terms of Article 100(3) of the Constitution. He candidly conceded that the said Opinion seems to have been obtained from the office of Attorney General at the initiative of respondent No. 1 rather than following its channelized legal course from the Ministry of Law, Justice and Parliamentary Affairs, as required under the Rules of Business, 1973. Learned Attorney General refrained from making any detailed comments about the contents of the said Opinion of the Attorney General for Pakistan, except that it was too sketchy, non-speaking and seems to have been obtained/solicited in a hurry.
11. Mr. Wasim Sajjad, learned Sr. ASC for respondent No. 1, assisted by Mr. Qamar Afzal, learned ASC, started his submission by narrating the whole background of this controversy starting from the execution of PCA dated 18.1.2002 between the appellants and foreigner Multi-national Company (MESA PETROLEUM (PRIVATE) LIMITED), which company was subsequently replaced in terms of the assignment agreement dated 18.1.2002 by the respondent No. 1, Dewan Petroleum, on buying 60% interest therein. He contended that it was unfortunate that a small dispute emanating from the legitimate claim of respondent No. 1 regarding fixation of withheld price of the gas qua interpretation of Article 10(2)(b) of PCA dated 18.1.2002, remained lingering on fora considerable period of time due to deliberate acts and omissions of the appellants and in such circumstances, respondent No. 1 were left with no option but to first avail the remedy envisaged under Article 28(1) of the PCA, which, before invoking the arbitration clause also provided for "amicable settlement" within a reasonable period. Leameo Sr. ASC for respondent No. 1, however, could not show us from the contents of said Article of PCA that besides arbitration it anywhere suggested any mode showing involvement of any outside agency for such amicable settlement at the instance of only one party, I earned counsel also could not controvert that it was on the initiative of respondent No. 1 that instead of having resolution of dispute between the parties through arbitration, things started moving from the Prime Minister Secretariat and President House, which process culminated in the Opinion of the Attorney General for Pakistan dated 13.11.2007 in favour of respondent No. 1 to which appellants never conceded or agreed. Mr. Wasim Sajjad, when confronted with the contents of the said letter of Opinion from the office of Attorney General did not dispute that it contained no reference to any request made on behalf of the Ministry of Law, Justice and Parliamentary Affairs, as embodied under Rule 14 of the Rules of Business, 1973, nor it reflected undertaking of any proceedings before him during which there was some representation or participation from the opposite party/appellants. In his further submissions with reference to Article 10(2)(f) of the PCA, leamed Sr. ASC also placed on record two statements, one showing the point of view of respondent No. 1 about its workability interpretation and the other showing comparison between the modes, one proposed by respondent No. 1 and the other by the appellants. For convenience sake both these statements are reproduced as under:- "Interpretation of Section 10.2(f) of the Agreement bv D.P.L.
Suppose that the weighted average C&F price per barrel in the relevant six-month period is US$ 60.
First, the marker price is to be determined bv indexation. According to the Agreement, this shall be 72.5% of the weighted average C&F price per barrel, which comes to US$ 43.5. This price Js to be further discounted in the following manner:
(A) Upto $16 $16 (i.e., 100% of this portion of the Marker Price)
(B) Over $16 and upto $21: $2.5 (i.e., 50% of this portion ($5) of the Marker Price.
(C) Over $21 and upto $1.5 (i.e., 30% of this portion $26: ($5) of the Marker Price)
(D) Above $26 and upto the ceiling of $36: $2 (i.e., 20% of this portion ($10) of the Marker Price, since the Marker Price exceeds the maximum permissible limit of $36) Price actually payable is A+B+C+D: $22 Secondly, suppose that the weighted average C&F price per barrel in the relevant six month period is US$40. Again, the Marker Price is to be determined first by indexation. Since the example relates to Zone II, the Marker Price becomes US$29. This price is to be further discounted in the following manner:
(A) Upto $16 $16 (i.e., 100% of this portion of the Marker Price)
(B) Over $16 and upto $21: $2.5 (i.e., 50% of this portion ($5) of the Marker Price.
(C) Over $21 and upto $26: $1.5 (i.e., 30% of this portion ($5) of the Marker Price)
(D) Above $26 and upto the ceiling of $29: $6 (i.e., 20% of this portion ($3) of the Marker Price, since the Marker Price does not exceed the > maximum permissible t limit of $36) ; Price actually $20.6 payable is . ( A+B+C+D: It may be noted that according to the Agreement, price computed in terms, as stated above (OIL), has to be converted into price per MMBTU for gas using a conversion factor, and it is in price so computed that is actually payable to the working interest owners. However, there is no dispute as to the conversion factor or the manner of its application. The conversion factor is 5.6 approximately. Applying this factor, the Price Payable comes to US$3.9 approximately.
Interpretation of Section 10.2(f) of the Agreement bv the Ministry: Suppose, as before, that the average C&F price per barrel in relevant six month period is US$60.
The following composition then emerges:- #tbs Method now proposed by the Government First determine "Applicable Price" by applying the "Slabs"
Upto $16:$16 (i.e., 100%)
Upto $16:$16 (i.e., 100%)
Over $16 and upto $21: $2.5 (i.e., 50% of this portion ($5)).
Over $21 and upto S26:$1.5(/.e., 30% of this portion ($5))
Above $26 and upto the seiling of $36:$2 (i.e., 20% of this portion ($10) since the price exceeds the maximum permissible limit of $36)
"Applicable Price"
A+B+C+D: $22 Now apply indexation: $22x72.5%=$ 15.95 Price actually payable is $15.95. #the #tbs Method laid down in Model PCA under 2001 Policy and Safed Koh PCA First find Marker Price by Indexation; $60x72.5%=$43.5 Upto $16:$16 (i.e., 100% of this portion of the Marker Price)
Over $16 and upto $21: 2.5 (i.e., 50% of this portion ($5) of the Marker Price)
Over $21 and upto $26:$1.5(/.e 30% of this portion ($5) of the Marker Price)
Above $26 and upto the ceiling of $36:$2 (i.e., 20% of this portion ($10) of the Marker Price, since the Marker Price exceeds the maximum permissible limit of $36)
Price actually payable is A+B+C+D=$22 #the price per barrel in relevant six-month period is US$60. The following composition then emerges:-- The price so computed is then to be converted into price per MMBTU using a conversion factor.
There is no dispute about application of the conversion factor which is 5.6 approximately.
Further, with reference to the above-said working formulas regarding interpretation of Article 10(2)
(f), he contended that admittedly earlier, after start of production and supply of gas from Salsabil Gas Field only its provisional price was fixed at 2.80 U.S. Dollars per Million British Thermal Unit (MMBTU) (varying from time to time) but since then the actual claim of respondent No. 1 for having price fixed as per their interpretation of Article 10.2(f) of PCA, at 3.89 U.S. Dollars per Million British Thermal Unit (MMBTU) remained pending with the appellants unresolved, It was in this situation that respondent No. 1 had to approach the Prime Minister of Pakistan for the first time on 30.5.2006 to get this dispute resolved at the earliest through amicable settlement, being the head of the Executive. But still the matter remained pending at different levels and did not conclude either way.
Due to the non-cooperative attitude of appellants/Ministry of Petroleum and Natural Resources. He strongly disputed the claim of appellants that in obtaining the opinion/advice of the Attorney General to resolve this dispute there was any ulterior motive or mala fide from the side of respondent No. 1 or that it was due to the exercise of undue influence that respondent No. 1 could succeed to manage such Opinion in their favour. Here learned Sr. ASC once again could not controvert from any material on record that any proceedings were held in the office of the Attorney General for Pakistan before recording his Opinion dated 13.11.2007, wherein any representative of the appellants was present or any experts were invited to assist him on the technical aspects of the dispute. Mr. Wasim Sajjad, when confronted with the language of Article 28.1 of the agreement dated 18.1.2002, did not dispute that mode of arbitration was the main option available to respondent No. 1 arid the appellants for resolution of any dispute strictly falling within its parameters, which was not followed/invoked by respondent No. 1. He insisted that other course followed by respondent No. 1 with the object of shortening the rehearsal of such proceedings of arbitration, for which they had also connected to be a binding Opinion upon them, was equally effective and legal. However, in this context, Mr. Wasim Sajjad, could not show that there was any written undertaking given either by the appellant No. 1 (Ministry of Petroleum & Natural Resources) or the respondent No. 1 before any forum that in case, solicited Opinion of Attorney General for Pakistan goes against them then it will be binding on them and they will be estopped from challenging it further before any forum.
12. Mr. Wasim Sajjad also dilated upon, the issue of maintainability of this appeal in the context of non-availing of remedy of ICA by the appellants before the Lahore High Court, which course was earlier followed by them while filing ICA No. 219 of 2009 for challenging the earlier order of learned Single Judge dated 14.12.2009. However, he could not submit any strong rebuttal to the submissions of Mr. Minto in this regard, which are fortified from the cases cited by him at the Bar. In reply to the arguments of Mr. Minto regarding non-maintainability of the writ petition on behalf of respondent No. 1 before the Lahore High Court, being relating to a dispute needing factual investigation as well, as breach of the terms of an agreement, learned Sr. ASC squarely placed reliance upon, the line of reasoning recorded by learned Single Judge in his impugned judgment and contended that the writ petition was not instituted by the respondent No. 1 for enforcement of any terms of the PCA entered into with the appellants, but for enforcement and implementation of the advice/Opinion of the Attorney General for Pakistan dated 13.11.2007, in their favour, which according to him, had binding effect under Article 100(3) of the Constitution.
13. To sum up, he concluded that such practice of harassment followed by the Government functionaries was instrumental in discouraging foreign investments in the country and respondent No. 1 were victim of red-tapism in the appellants' Ministry, who, with the ulterior motive withheld the legitimate claim of respondent No. 1 now for a period of over four years, which is seriously hampering their working capital. Therefore, the impugned judgment, being just, fair and equitable needs no interference from this Court else the parties will be forced to enter into another round of unending litigation, which shall cause irreparable loss to the parties, particularly to respondent No. 1.
14. We have carefully considered the arguments advanced before us by learned ASCs for the parties and the Attorney General for Pakistan and with their able assistance perused the voluminous case record made available to us. But before we proceed further, it may be clarified here that in the form of present appeal, main controversy involved before us is whether for seeking directions against the Ministry of Petroleum & Natural Resources and the Federal Government to fix the wellhead gas price of Safaid Kho/ Salsabil Gas field as per opinion of the Attorney General for Pakistan dated 13.11.2007, invoking of writ jurisdiction of the Lahore High Court under Article 199 of the Constitution by respondent No. 1 was a lawful course and whether in the given facts and circumstances of the case said opinion of the Attorney General for Pakistan had any legal sanctity for its enforcement through such process. This being the position, we would refrain here from making any deliberation or discussion as to the interpretation, import or implication of Article 10(2)
(f) of PCA, but would confine our discussion to the above extent.
15. As summarized above the whole gamut of arguments revolves around the opinion of the Attorney General for Pakistan dated 13.11.2007; the manner in which it was obtained and its legal sanctity/implications with reference to Article 100(3) of the Constitution of the Islamic Republic of Pakistan, 1973 read with rule 14 of the Rules of Business, 1973. Therefore, for ready reference, it will be useful to reproduce the same hereunder along with two relevant provisions of law:- Opinion of the Attorney General for Pakistan dated 13.11.2007 "Subject: GAS PRICE OF SALSABIL FIELDMEETING WITH DPL REPRESENTATIVE.
The facts in the present case are that more or less admitted between the parties which essentially are that on 18th January, 2002 a Petroleum Concession Agreement for Safed Kho Block was signed between the President of Pakistan and the Joint Venture operated by M/s. Dewan Petroleum (Pvt.)
Limited, It is common ground between the parties and this agreement was have been accord that the mutual Petroleum Concession Agreement by the Economic Coordination Committee of the Cabinet. It has reference to the Petroleum Exploration and Production Policy, 2001.
2. It appears that the Joint Venture made a discovery for Salsabil Field in and after declaring commercial disregard and getting approval of the development planning petroleum in January, 2006, M/s. Dewan Petroleum (Pvt.) Limited submitted a draft Gas Price Agreement for sell a bill falls in May, 2006 for the approval of the agreement.
3. The bone of the contention between the parties is price at which the gas is to be supplied by the Dewan Petroleum (Pvt.) Limited. This aspect of the matter is governed under Article 10.2(f) of the agreement which reads as under:-
(f) "Whenever a Working Interest Owner is selling pipeline quality Natural Gas of acceptable application of Nominated Buyers, it shall subject to Article 10.3, received a price per Million British Thermal Unit (MMBTU). The price to be paid to a Working Interest Owner shall be determined for a six (6) Monthly period (hereinafter referred to as "the Price. Notification Period" starting at eight (8) a.m. P.S.T, on 1st January and 1st July each year except the first period which may commence from the start of Commercial Production till 30th of June or 31st of December as the case may be.
The price of acceptable quality Natural Gas to be notified per MMBTU shall be computed as follows:-
(1) First determine the "Marker Price" which shall be 72.5% of the weighed average C&F price per barrel (based on quoted FOB prices) of the basket of Crude Oils imported into .Pakistan during the first six Months period of the seven Months period immediately preceding the relevant Price Notification Period.
Apply following discounts to marker Price.
Floor and ceiling will be US$ 10/barrel and US$ 36/barrel of C&F price, respectively with following discounts: Over US$ 10/barrel and upto US$ 16/barrel: 100% of Maker Price over US$ 16/barrel and upto US$ 26/barrel, Plus 50% of incremental Marker Price.
Over US $21/barrel and upto US$ 26/barrel; Plus 30% of incremental Market Price; and Over arid above US$ 26/barrel upto the ceiling, plus 20% of incremental Marker Price.
(2) Using the appropriate conversion factor, convert the discounted Marker Price to MMBTU rounding the quotient to four (4) decimal places to arrive at the Marker Price per MMBTU.
(3) Not later than twenty <20) Days prior to the commencement of the Price Notification Period during which the Operator experts first Natural Gas Production to commence, the Operator shall submit to the Authority established under the Natural Gas (Price for suppliers by Producers) Rules, 1976 (hereinafter referred to as the "Price Determining Authority") a calculation of Marker Price in US Dollars to be fixed on the first Day of such Notification Period.
(4) Thereafter, Operator shall submit to the Price Determining Authority the relevant Marker Price calculation is US Dollars (applicable to each six (6) month Price Notification Period prior to easily preceding 10th December and 10th June respectively.
(5) THE PRESIDENT shall ensure that details of the quantities and C&F prices of the Crude Oils imported into Pakistan as referred to in Article 10.2(f)(1) hereof, are supplied to Operator not later than twenty-five (25) days prior to the commencement of the relevant Price Notification Period for the purpose of calculations to be made pursuant to Article 10.2(f)(1) & (2).
(6) Operator shall submit to the Price Determining Authority a draft pricing notification setting out the US Dollar prices resulting from Article 10.2(f)(1) & (2) above for the relevant Price Notification Period at the same time as submitting the calculation pursuant to Article 10.2(f)(3) &, (4) above (as the case may be).
(7) Such pricing notification shall be published in US Dollars in the official Gazette for the purposes of the Gas Sales Agreement within forty-five (45) Days of the date of receipt of the aforesaid draft pricing notification."
4. According to M/s. Dewan Petroleum (Pvt.) Limited the price is to be computed in the manner that first market price in respect of various zones is to be determined then the discounts to the marker price are to be applied in the manner provided in the agreement itself. On the other band the view of the government is that first the discounts are to be applied and then the marker price is to be determined.
5. In my opinion, the view-point of the Dewan Petroleum is supported by the Agreement, thereafter, the stand taken by Dewan Petroleum has more merits than the stand the Government. The agreement itself provisions that first the market price is to be determined and then the directions are to be applied to the marker price. If the stand taken by the Government is accepted then the word "first" in the relevant clause becomes redundant.
6. Accordingly am of the view that on correct interpretation of Article 10.2(f) first marker price is to be determined and then the discounts applied.
Sd/ Malik Muhammad Qayyum Attorney General for Pakistan Article 100 of the Constitution "100. Attorney-General for Pakistan. (1) The President shall appoint a person, being a person qualified to be appointed a Judge of the Supreme Court, to be the Attorney-General for Pakistan.
(2) The Attorney-General shall hold office during the pleasure of the President and shall not engage in private practice so long as he holds the office of the Attorney-General.
(3) It shall be the duty of the Attorney-General to give advice to the Federal Government upon such legal matters, and to perform such other duties of a legal character, as may be referred or assigned to him by the Federal Government, and in the performance of his duties he shall have the right of audience in all Courts and Tribunals in Pakistan.
(4) The Attorney-General may, by writing under his hand addressed to the President, resign his office.
Rule 14 of the Rules of Business. 1973
14. Consultation with, the Law, Justice and Parliamentary Affairs Division.-(1) The Law, Justice and Parliamentary Affairs Division shall be consulted-
(a) on all legal questions arising out of any case
(b) on the interpretation of any law
(c) before the issue of or authorization of the issue of an order, rule, regulation, by-law, notification, .Etc. In exercise of statutory powers,
(d) deleted vide Cabinet Division No. 104/10/76-Min, dated 26.3.1976.
(e) before instituting criminal or civil proceedings in a Court of law in which the Government is involved;
(f) whenever criminal or civil proceeding are instituted against the Government at the earliest possible stage; and
(g) before the appointment of a legal advisor in any Division or any office or corporation under its administrative control and the Law, Justice and Parliamentary Affairs Division will make its recommendations after consultation with the Attorney General.
(2) No Division shall consult, the Attorney General except through the Law, Justice and Parliamentary Affairs Division and in accordance with the procedure laid down by that Division.
(3) If there is disagreement between the views of the Attorney General and the Law, Justice and Parliamentary Affairs Division, the case shall be submitted to the Minister for Law, Justice and Parliamentary Affairs for opinion. If the Minister disagrees with the Attorney General, the case shall be referred to the Prime Minister for orders who may refer the matter to the Cabinet if he so desires.
(4) For any proposed legislation, the Law, Justice and Parliamentary Affairs Division shall be consulted in accordance with rules 27 to 30.
(5) Bills or Ordinances received from the Provincial Governments or Governors requiring assent or instructions of the President shall be examined in the Division concerned and shall be submitted to the President through the Law, Justice and Parliamentary Affairs Division."
16. In the first place bare reading of above reproduced opinion of Attorney General for Pakistan leads us to the conclusion that it could not be termed as an opinion in terms of Article 100(3) of the Constitution read with rule 4 of the Rules of Business, which contemplate a specific procedure to be followed through the Ministry of Law, Justice & Parliamentary Affairs, having pivotal role to play in this regard. This tactual position is affirmed from the fact that the said opinion from the office of Attorney General for Pakistan does not contain reference of any such initiative/correspondence, but only meetings of the Attorney General for Pakistan with the representative of respondent No. 1 (DPL). Secondly, the opinion also seems to lack transparency as no intimation of any such proceedings (if any) held in the office of the Attorney General for Pakistan was conveyed to the appellants nor any opportunity of hearing for this purpose was afforded to them, to put up their case before recording his controversial opinion by the Attorney General for Pakistan. As it appears from its contents, in the office of the Attorney General for Pakistan the opinion was unilaterally managed by respondent No. 1 at their own level, and thereafter efforts were being made by them to give it a colour of binding effect on the appellants and the Government of Pakistan, though even a legally recorded opinion of the Attorney General for Pakistan in terms of Article 100(3) of the Constitution read with Rule 14 of the Rules of Business, could only be termed as an advice to the Federal Government, which may or may not be approved, regarded or honoured by the concerned quarters. Thus, in our view such opinion ought not to have been used or exploited against government functionaries in the manner, as attempted by respondent No. 1 in the instant case.
17. From the language of above reproduced rule 14 it is clear that sub-rule (1) categorizes the items on which Ministry of Law, Justice & Parliamentary Affairs Division should be consulted; sub-rule (2) prohibits any Division except through Law, Justice & Parliamentary Affairs Division to consult the Attorney General directly in violation of procedure laid down by that Division; subsequently added sub-rule (3) visualizes that in case of disagreement between the view of the Attorney General and the Law, Justice & Parliamentary Affairs Division the matter shall be submitted to the Minister for Law, Justice and Parliamentary Affairs for his opinion, who, in case of disagreement, may refer the same to the Prime Minister for orders, who may thereafter refer the same to the Cabinet if he so desires; sub-rule (4) only deals regarding consultation on proposed legislation, in accordance with rules 27 to 30, while sub-rule (5) deals with the processing of Bills or Ordinances received from the Provincial Government or Governors requiring assent or instructions of the President, further providing therein that before being submitted to the President through the Law, Justice and Parliamentary Affairs Division the same are to be examined by the concerned Division.
18. Similarly, a simple reading of Article 100(3) of the Constitution, makes it abundantly clear that obtaining the opinion of the Attorney General for Pakistan, at the instance of Ministry of Justice, Law & Parliamentary Affairs is an internal arrangement within the government functionaries for the purpose of their collaborated working, having no binding effect thereof in favour of a third party unless so chosen by the Federal Government or the concerned Ministry. More so, in the circumstances when neither required procedure under the Rules of Business was followed nor the norms of transparency and fair play seem to have been abided.
19. As to the merits of the opinion or otherwise one need not say much except that in it relevant Article 10(2)(f) of the PCA has been reproduced in verbatim and thereafter in its paragraph five inclination has been shown to agree with the claim of respondent No. 1 with reference to the import of word "first", without any further discussion as to the case of appellants or reasons for disagreement thereof. At the cost of repetition we hold that purported opinion of Attorney General for Pakistan has no nexus to Article 100(3) of the Constitution or Rule 14 of the Rules of Business, 1973 as it was a private arrangement at the behest of respondent No. 1, thus on these premise it enjoyed no legal protection. To fortify this position, here a reference to letter No. F.1(1)/2006-AGP, dated 28.10.2006, issued by the Secretary in the office of the Attorney General for Pakistan, addressed to Mr. Shahid Hameed, Chief Operating Officer of respondent No. 1 company, will also be useful as it clarifies the stance of their office with reference to the procedure to be followed under the Rules of Business, 1973. Same is reproduced as under:- Subject: Safed Koh Gas Pricing Agreement Dear Sir, We acknowledge the receipt of your letter dated 20th October, 2006.
As you will appreciate no action can be taken by the Attorney General for Pakistan in the matter till a proper reference is received from the Ministry of Petroleum & Natural Resources through the Ministry of Law, Justice & Human Rights as per Rules of Business, 1973."
The contrary view recorded by the learned Single Judge in the Lahore High Court in his impugned judgment is, therefore, erroneous, and has no legal basis.
20. Dilating further upon the controversy as to the legality or otherwise of the opinion of Attorney General for Pakistan, on the touchstone of Article 28.1 of PCA dated 18.1.2002, it will be advantageous to reproduce here the said Article, which reads as under:- Article 28.1 "Any question or dispute arising out of or in connection with the terms of this Agreement or the License or any Lease (regardless of the nature of the question or dispute) shall, as far as possible, be settled amicably. Failing an amicable settlement within a reasonable period, such dispute shall be submitted to the International Centre for Settlement of Investment Disputes (ICSID) established by the "Convention on the Settlement Of Investment Disputes Between States and Nationals of Other States" of 1965 and THE PRESIDENT and the Working Interest Owners, to the extent required by said Convention, hereby consent to arbitration thereunder.
The venue of the arbitration shall be in Pakistan or elsewhere as mutually agreed between THE PRESIDENT and the Foreign Working Interest Owners. If such mutual agreement cannot be reached, the venue shall be decided by the ICSID. The award rendered shall be final and conclusive. The judgment on the award rendered may be entered in Court having jurisdiction or application may be made in such Court, for a judicial acceptance of the award and an order of enforcement as the case may be. The official language of arbitration will be English."
A plain reading of first paragraph, reproduced above, goes to show that it contemplates that any question or dispute arising out of or in connection with the terms of the PCA or the license or any lease, regardless of the nature of the question of dispute could be resolved through two prescribed modes; firstly, by "amicable settlement" within a reasonable period; secondly, in case of failure/non-availing of 1st mode, such dispute shall be submitted to a specified forum i.e. The International Centre for Settlement of Investment Disputes (ICSID) for "arbitration".
21. When we look at the Dictionary meaning of word 'amicable settlement', as per Black's Law Dictionary, Sixth Edition, word 'amicable' is defined as under:- Amicable. Friendly, mutually forbearing. Agreed or assented to by parties having conflicting interests or a dispute; as opposed to hostile or adversary.
Similarly the word "settlement' has been defined as under:- Settlement Act or process of adjusting or determining; an adjusting; an adjustment between persons concerning their dealings or difficulties; an agreement by which parties having disputed matters between them reach or ascertain what is coming from one to the other, arrangement of difficulties; composure or doubts or differences, determination by agreement; and liquidation.
Thus a combined reading of these two words incorporated under Article 28.1 goes to show that recourse to amicable settlement of any dispute between the parties to the agreement was only possible through a mode mutually agreed by them and not at the instance of one party alone, forcing and pressurizing other one through different modes to agree, consent and to give it a binding effect.
22. Indeed, as pointed out by Mr. Waseem Sajjad, Sr. ASC, some correspondence on this subject had taken place between the Ministry of Law, Justice & Parliamentary Affairs and the office of the Prime Minister of Pakistan and the President house, but to that, as evident, Ministry of Petroleum and Natural Resources was never a consenting party, In the present case, there is nothing on record to indicate that the concerned Ministry of Petroleum and Natural Resources ever gave its consent for referring the matter for the opinion of the Attorney General for Pakistan as a mode of amicable settlement, on the understanding of giving it a binding effect. Thus, the steps taken by respondent No. 1 in undertaking this whole exercise, which culminated in the opinion of the Attorney General for Pakistan dated 13.11.2007 cannot be regarded as an exercise within the meaning of "amicable settlement" envisaged under Article 28.1 of PCA. More-so, when at no point of time, before or even after the recording of this opinion, the appellants ever acceded to or showed their willingness to accept it as an "amicable settlement" between the parties for resolution of such dispute, rather they strongly resisted such move.
23. As to the objection of non-maintainability of this appeal under Article 185(3) of the Constitution, suffice it to observe that in the peculiar facts and circumstances of the case, we find it appropriate to entertain this appeal as an exception to the general rule of first availing the remedy of ICA against the impugned judgment of learned Single Judge of the High Court, thus such objection, following the above referred earlier precedents of this Court, referred to by Mr. Minto, is not sustained.
24. It will not be out of place to mention here that we have refrained from making point to point discussion as regards the interpretation of Article 10.2(f) of PCA qua the two statements/Charts presented before us by Mr. Waseem Sajjad, Sr. ASC for Respondent No. 1, as the controversy involved before us is not that what should have been the well head price of natural gas supplied by respondent No. 1 from Salsabil Gas field on its proper interpretation, but the legality and propriety of the impugned judgment of Lahore High Court, which has been dilated upon as above.
25. Having discussed so in this case another point for our consideration is as to whether the impugned judgment is to be set aside as a whole when the course contemplated under Article 28.1 of PCA, which ought to have been followed by the parties for resolution of their dispute long ago, has not been followed as yet and due to such delay respondent No. 1 are suffering heavily, In such circumstances, we feel inclined to hold that exercise of jurisdiction by the learned Single Judge, to the extent of issuing directions to the appellants/Government functionaries to do the needful at the earliest, would have been just, equitable and lawful, but without bracketing it with the opinion of the Attorney General for Pakistan dated 13.11.2007 or making it binding; thereby causing serious prejudice to the interest of the appellants. We, therefore, while allowing this appeal and setting aside the impugned judgment, dispose of the writ petition No. 3708 of 2009, filed by respondent No. 1 before the Lahore High Court in the following terms:- Without being prejudiced or influenced and, independent to the opinion of the Attorney General for Pakistan dated 13.11.2007, the parties shall immediately either have recourse to "amicable settlement" of their dispute in terms of Article 28.1 of PCA and to finalize it within thirty days, or they shall have recourse to arbitration, strictly in terms thereof, without any further loss of time.