TEHRAN/ISLAMABAD (Agencies): Iran has warned Pakistan that it may have to pay a $18 billion penalty if it fails to make progress on the Iran-Pakistan gas pipeline project within the deadline, which has been extended by 180 days to September 2024.
If Pakistan fails to fulfill its obligations, Iran plans to appeal to the International Court of Arbitration in Paris to collect the money.
The Iran-Pakistan gas pipeline project has been facing delays since 2014. In late 2022, Iran asked Pakistan to build part of the pipeline on its territory by February-March 2024 or be ready to pay a fine of $18 billion. Earlier in February 2019, Tehran sent a notice to Islamabad about its failure to lay its part of the pipeline on time and threatened to go to the arbitration court in Paris and apply penalties in the gas purchase agreement, which was signed in 2009 for 25 years.
Pakistan claims that it cannot implement the project on its territory due to US sanctions imposed on Iran. The gas purchase agreement between Iran and Pakistan was signed in accordance with French law, and the International Court of Arbitration in Paris reportedly does not recognize US sanctions.