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FILE - An Iranian worker walks past the Pakistan-Iran Gas Pipeline Project in Gabd near the Pakistani border in Iran, March 11, 2013.
FILE - An Iranian worker walks past the Pakistan-Iran Gas Pipeline Project in Gabd near the Pakistani border in Iran, March 11, 2013.

Pakistan has hired two U.S.-based law firms to represent it at the International Court of Arbitration as it fights Iran’s bid to force the neighbor country to uphold its end of a gas pipeline deal or pay a large penalty.

Tehran and Islamabad signed a gas sales and purchase agreement (GSPA) in June 2009 for a cross-border pipeline that would supply as much as a billion cubic feet per day of gas to energy-starved Pakistan from Iran’s South Pars Field.

However, Pakistan has not started construction of the pipeline on its territory, primarily to avoid invoking U.S. sanctions.

In August, Pakistani media reported Tehran served Islamabad a final notice ahead of approaching the Paris-based arbitration body.

The two law firms; Wilkie Farr and Gallagher, and White & Case, will represent Pakistan in arbitration proceedings, a highly placed source in the Office of the Attorney General of Pakistan confirmed to VOA Wednesday. The official spoke on the condition of anonymity, because they were not authorized to speak to the media. VOA requested a comment from the law firms but have yet to receive a response.

In an email, White & Case confirmed to VOA that a team of legal experts in Paris and London is advising Pakistan. Wilkie Farr did not respond to VOA's request for comment.

Islamabad reportedly faces a penalty of up to $18 billion for delaying the project.

Background

In 2011, Iran announced it had completed construction of 900 kilometers of the pipeline on its side of the border between the two countries.

Two years later, Iran’s then-president, Mahmoud Ahmadinejad, and Pakistan’s President, Asif Ali Zardari, inaugurated the $7 billion project on Iranian territory.

In 2014, Pakistan asked for a 10-year extension on the project to avoid paying a penalty of up to $1 million per day starting in 2015.

In March 2024, close to the end of the extension period, Pakistan’s outgoing interim government rushed to approve construction of an 80-kilometer section of the pipeline from its border with Iran into the key southwestern port town of Gwadar in Balochistan province.

However, construction is yet to begin.

Last month, Pakistan’s minister for petroleum, Musadik Malik, told parliament that international sanctions stood in the way of proceeding with the cross-border pipeline.

“This is a deeply complicated matter and involves international sanctions," the minister said.

He rejected reports that the country could face a penalty of $18 billion but did not give a figure.

Hours before the minister’s remarks, U.S. State Department spokesperson Matthew Miller reiterated Washington’s warning against doing business with Tehran.

"We will continue to enforce our sanctions against Iran. We also advise anyone considering a business deal with Iran to be aware of its possible ramifications," the spokesperson said at a regular media briefing.

Iran is under U.S. sanctions for its nuclear and ballistic missile programs.

At times, Pakistan has signaled it will defy U.S. warnings but apparently has not done so operationally or publicly.

Although Pakistan can construct a pipeline within its border, it requires a sanctions waiver from Washington to purchase gas from Iran. Islamabad has not acquired the waiver.

FILE - Jamshid Sharmahd attends the first hearing of his trial in Tehran on Feb. 6, 2022. (Photo by Koosha Mahshid Falahi / Mizan News Agency / AFP)
FILE - Jamshid Sharmahd attends the first hearing of his trial in Tehran on Feb. 6, 2022. (Photo by Koosha Mahshid Falahi / Mizan News Agency / AFP)

Germany’s Foreign Ministry recalled its ambassador to Iran, Markus Potzel, on Tuesday for consultations and also summoned Iran’s charge d’affaires in Berlin following Iran’s execution of Iranian-German dissident Jamshid Sharmahd.

“We have sent our strongest protest against the actions of the Iranian regime & reserve the right to take further action,” the ministry posted on social media platform X.

Iran’s Foreign Ministry said, according to state media reports, that “support for Sharmahd contradicts the German government’s claims in regards to the rule of law, the protection of human rights, and the fight against terrorism.”

Iran’s state media reported Monday that authorities executed Sharmahd after convicting him on terrorism charges.

Sharmahd, an Iranian and German dual citizen and opposition figure, was accused of masterminding a deadly 2008 bombing of a mosque in Shiraz

His family strongly denies the charges and says Iranian authorities kidnapped him in Dubai in 2020.

Sharmahd, 68, had been living in the United States, where he served as a spokesperson for Tondar, a group seeking to restore the Western-backed monarchy that ruled Iran before the 1979 Islamic Revolution.

German Foreign Minister Annalena Baerbock condemned the execution in the “strongest possible terms” and said Sharmahd was “abducted to Iran from Dubai, held for years without a fair trial and has now been killed.”

She said the German government “made it crystal clear to Tehran time and again that the execution of a German national would have severe consequences.”

Germany expelled two Iranian diplomats in 2023 over Sharmahd’s sentence.

U.S. State Department spokesman Matthew Miller said Monday, "We have long made clear that we oppose the way Iran carries out executions, often in a way that fundamentally violates human rights.”

Sharmahd was given the death penalty in 2023 for “corruption on Earth,” a term Iranian authorities use to refer to a broad range of offenses, including those related to Islamic morals.

The Iranian judiciary's Mizan News Agency reported that his execution took place Monday morning but did not give further details.

Some information for this report was provided by The Associated Press, Reuters and Agence France-Presse.

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