ISLAMABAD, DEC 21 (DNA) – The three-decade-old $ 93.5 million trade dispute hampering Pakistan’s economic relationship with Russia.

Information available with this scribe highlights that Pakistan has failed to settle a three-decade-old $ 93.5 million trade dispute with Russia as Pakistan sought some more time to solve this important matter during the 5th Session of Pakistan – Russia Intergovernmental Commission meeting.

Pakistani officials have informed their counterparts that one of the exporters filed a lawsuit against the Russian Federation, Board of Investment (BOI), Ministry of Finance and Commerce in Sindh High Court so that is why the matter has not been resolved, sources added. Earlier, all other exporters had signed an agreement with BOI to withdraw court claims.

During the Soviet Union time’s exporters from various countries, including Pakistan, arranged freight for Soviet merchant marine and earned rights to export goods to Soviet entities equal to the value of the sea freight generated by them. However soon after the collapse of the Soviet Union in 1991, disputes arose regarding shipping rights, money deposited against shipping rights and claims for goods supplied.

Documents stated that the total claims of Pakistani exporters amounted to $ 117.46 million. Subsequently, some Pakistani exporters with outstanding claims filed lawsuits in the Sindh High Court. The Court issued stay orders restraining the National Bank of Pakistan (NBP), which maintained sovereign Russian (successor state of the Soviet Union) funds, from transferring them.

It is pertinent to mention here that the former Soviet Union had extended loans to Pakistan for different projects, the funds for which were maintained by the NBP. On a court order, a sum of Rs 7.8 million was paid to the Pakistani exporters from these Russian accounts. This court order further aggravated the situation as under Russian laws, if any country freezes its sovereign funds, the Russian Government cannot provide a credit line for projects in that country.

Three rounds of negotiations were held in 1999, 2005 and 2009 to resolve the issue, which remained inconclusive while the Russian President Putin took the matter up with the former Prime Minister in their meeting in Astana (Kazakhstan) on the sidelines of the SCO Summit in June 2017 after that former PM instructed officials to solve this matter as early as possible.

Documents stated that the Ministry of Foreign Affairs also recommended paying $ 93.5 million to Russia from our own available resources. “Once the court stay-order is vacated, the subsequently restored Russian funds could then be utilised to reimburse the payment made to the Russian side”, however the Finance Division and BOI failed to resolve this matter prior to the 5th Session of IGC in Moscow.

One official, who participated in this meeting, on the condition of anonymity told that Pakistan sought some time from Russia. This matter directly pertains to exports and if they themselves withdraw their petition in court that it can be resolved.