Iran Threatens Pakistan with Court Action

Iran has sent a final notification to the Pakistani government regarding its intention to appeal to the International Court of Arbitration associated with the International Chamber of Commerce in Paris in September 2024. This action is related to Islamabad's failure to meet its contractual obligations concerning the construction of the "Peace" gas pipeline, according to reports from the TASS news agency.

The agreement for the construction of the pipeline's Pakistani section was signed in 2009. Islamabad was obligated to complete its part of the project by December 2014. The document included a clause about penalties for delays, stating that Pakistan would have to pay $1 million for each day of delay starting from January 1, 2015. In 2014, construction was postponed for ten years due to US sanctions against Tehran.

In September 2019, Pakistan's Inter-State Gas Systems and Iran's National Iranian Gas Company signed a revised agreement. According to this accord, Islamabad committed to completing the pipeline by 2024 and to import approximately 21 million cubic meters of natural gas daily. In return, Tehran agreed to refrain from appealing to the arbitration court.

However, the delivery of the first phase of the project (an 81 km section) has been postponed until September 2024. Nevertheless, the construction of this section has not yet begun, as noted by the publication.

In this context, Tehran has sent a "final notice" to Islamabad. In March 2024, Donald Lu, the Assistant Secretary of State for South and Central Asian Affairs, warned Islamabad during a Congressional hearing about "serious consequences" if it were to maintain relations with Iran regarding the "Peace" pipeline project.