A consortium of Saudi and Kuwaiti investors in K-Electric has served a $2 billion legal notice to the Government of Pakistan, escalating a long-standing dispute.
The investors, Saudi Arabia's Al Jomaih Group and Kuwait's Denham Investments Limited, are represented by London-based law firm Steptoe International (UK) LLP, reported the Tribune.
The notice, dated October 20, was delivered to the Attorney General's Office, the Prime Minister's Office, and the Special Investment Facilitation Council (SIFC).
This marks the first-ever claim against Pakistan under the OIC Investment Agreement, a multilateral treaty that protects investments among member countries of the Organization of Islamic Cooperation (OIC).
The investors allege that Pakistan violated international obligations by blocking legitimate business operations, delaying regulatory approvals, and failing to protect their investment from interference.
They argue that these actions caused financial harm, including the loss of value from the stalled $1.77 billion sale of K-Electric to Shanghai Electric Power, which has been pending since 2016.
They have invited the government to enter good-faith negotiations, while reserving the right to initiate international arbitration if no settlement is reached.
The 67-page notice cites "years of obstruction, inconsistency, and unfair conduct," estimating cumulative losses at no less than $2 billion.
The document identifies two key disputes: the government's failure to approve the Shanghai Electric sale, and secondly, tariff and payment delays, including unreleased subsidies and revisions that allegedly cost K-Electric around Rs. 100 billion annually.
Notice also highlights an alleged takeover attempt of K-Electric's parent company by a Pakistani businessman, which the investors say was ignored by regulators.