[BUSSINESS LAW] [Term Report]

Question

A foreign business person had invested 2000,000 in he oil industry in Pakistan.

In 1996 after an agreement was entered into with the P.S.O. his company – Raymond oils and
the G.O.P, he was allowed to repatriate 31% of the earnings in Dollars and the remaining was to
be invested toward the company’s expansion project. Also till 2001, he was to be provided a tax
holiday.

However, in 1998 the G.O.P was replaced by a military regime, and the martial law annulled the
assembly the judiciary, all the earlier agreements were made void.

The CEO of Raymond oils stepped in from Washington to discuss the issue with the
president/PM for now the company’s assets had a market value in excess of 4times the original
value.

How and to what extent will the new constitution support his case and how may he if he
decides to pack off his business interests in Pakistan, negotiate with possible domestic
investor that may be interested in the take over?

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Part#1

According to the above question , I would like to break the question into tow parts so here I ma
going to put a light on the first part with the help of certain concepts.

In my opinion as after an agreement , a foreign person Mr. jack who’s from Raymond oils
invested 200000$ in 1996 in the Pakistan state oil ,and this agreement valid up to 2001 .
According to the agreement foreign person also allowed to repatriate 31% of his earning and tax
holiday.

First of all let me mention that, Contract is an agreement between two or more person creating
rights and duties between them and which is enforceable by law, whenever their exist a
collaboration between countries of origin and destination takes the form of bilateral agreement
and government of both countries are involved in it which ensure that migration takes place in
accordance with agreed principles and procedures,

“An agreement formed by an exchange of a promise in which the promise of one party is
consideration supporting the promise of the other party”

Furthermore Countries may sign such agreements for political reasons, to reflect friendly
relations or to reinforce cooperation in managing irregular migration., these agreements may get
void if martial law occurs in the country or many other reasons to void .

Before giving answer of this part I would like to give some information about Pakistan Foreign
Policy .which may able to support my reply

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[BUSSINESS LAW] [Term Report]

Government Of Pakistan:

The federal commerce minister Chaudhry Ahmed Mukhtar announced the trade policy for 1996-
97 on July 15.

• increasing Pakistan's share in the international markets,

• diversifying exports
• achieving quantum jumps of exports through value-addition, aggressive marketing,
• making procedures, rules and regulations more transparent and simpler to apply.

Foreign Investment policy of Pakistan:

The foreign investment policy of the GOVERNMENT OF PAKITAN is meant for the guidance
note for those foreign investor who are interested to invest on Pakistan. however there are some
statements according to which forgn agreements handled .

Agreement on Avoidance of double taxation:

According to the above statement Pakistan never allow double taxation for local investor and for
forgn investors;

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Investment Agreements:

Pakistan has entered into bilateral agreement and protection of investment the agreement provide
that.

• Non discrimination between local and forging investors

• Non discrimination treatment in case of compensation for loses .

• Adispute settlement between a host country and an investor of other

Secondly, whenever foreign person made an investment in Pakistan is called an foreign capital
“ A person who’s is not citizen of Pakistan , or by a company incorporated outside Pakistan “ .
now lets see if martial law occur in country .

Martial law:

If martial law exist in country, military takes country of the admintration of justice. whereas in
Pakistan Martial law occurs because of instability of country and political issue therefore law of
martial takes place and for the time being suspend the judiciary assembly and other things .

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[BUSSINESS LAW] [Term Report]

To what extent will the new constitution support foreign person

case?

Answer:

As above I have specify some major issue which help me to support my answer.

According to this scenario where as Mr. Jack repatriating 31% profit and our Government Of
Pakistan also earning the same profit . Although that foreign person also having tax holiday
which is also legal so it has been clear that this agreement is not invalid because all four elements
of contract are fulfilling , but here the question arises that if this agreement is not valid so why
military regime void all earlier agreements , annulled judiciary and assembly , well the reason
would be that. In 1996 when the agreement signed by the both companies however Government
were also involved but as military regime replaced the Government of Pakistan in 1998 and void
earlier agreement because it’s the authority of martial law they can cancel any kind of person
whose agreement void by them in order to control the current situation. In my opinion as Mr.
jack also provided by the tax holiday and repatriating 31 % earning and reaming he is investing
here , Although government also earning profit .

Usually it doesn’t happen that when ever military law occurs it annul the constitution
However,

Military can suspend the constitution and make an amendments into it , but no one dissolve
the constitution , In fact military can annul the judiciary and assembly but as soon as
possible new assembly and judiciary formed by the military or they made some
amendment in it

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[BUSSINESS LAW] [Term Report]

In this case if Military do so then ,if new judiciary and assembly make new agreement if
government don’t offer that party again , then the foreign person should file suit in the
court according to common law , international law and constitution because agreement was
not void in actual and Mr jack and his company Raymond oil suffer loss .

According to the foreign investment policy of Pakistan , If any emergency occur in country so
the non discriminatory treatment takes place by compensation foreign investor for his
losses . As Mr. jack invested 200000$ in 1996 but in 1998 its market value excess four times
their original value and he was also giving tax and equally repatriating . according to the
constitution of 1973 he has to be compensated with the original value or government may
include him in their shareholder which may help him to recover his losses

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[BUSSINESS LAW] [Term Report]

Part#2
If Mr. jack decides to pack off his business interest in Pakistan ,
negotiate with possible domestic investor that may be interested in
the take over?

Answer:

According to next part which wheatear he decides to pack off his business and negotiate with
possible domestic investor that may be interested in the take over

In the above scenario there would be two condition first foreign investor have no right to offer
domestic investor to take over, but domestic investor may show interest to foreign investor in
order to take over project and second is that if Mr. jack receives the compensation or an accord
which satisfies him so he may pack off his business and went to his own country

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