ICC Arbitration Puts Pakistan’s Energy Sector Under Pressure

ISLAMABAD: Pakistan’s energy sector is headed for another high-stakes international commercial arbitration, with Petrosin CNG initiating proceedings against Mari Energies Limited before the International Chamber of Commerce (ICC), seeking damages of US$19.1 million (approximately Rs5.357 billion) along with arbitration costs and other relief; documents reviewed by the reporter show.

The dispute stems from the termination of a Gas Sale and Purchase Agreement (GSPA) between Petrosin CNG and Mari Energies, one of Pakistan’s largest upstream oil and gas producers.

According to court filings, Petrosin CNG contends that Mari Energies unlawfully terminated the gas supply agreement, causing substantial commercial losses for which it seeks compensation through international arbitration.

Petrosin filed a Civil Petition for Leave to Appeal before the Supreme Court of Pakistan under Article 185(3) of the Constitution of the Islamic Republic of Pakistan against the judgment dated 14.01.2026 passed by the learned Single Bench of the Islamabad High Court.

Petrosin CNG (Private) Limited entered into a Gas Sale and Purchase Agreement (“GSPA 2022”) with Mari Energies Limited for the supply of gas from the Halini Production Field. Under the terms of the GSPA, the agreement was to remain effective for so long as gas remained available from the field, provided that the Buyer was not in breach of its obligations under the GSPA.

The GSPA is a binding commercial contract governed by the laws of Pakistan and contains a clear and unequivocal arbitration agreement providing for the resolution of disputes under the Rules of Arbitration of the International Chamber of Commerce (“ICC Rules”), with the seat of arbitration in London.
Mari Energies issued a termination notice dated 27.05.2025, which Petrosin contends was unlawful and contrary to the terms of the GSPA. Petrosin initially approached the Civil Court, which, by order dated 21.06.2025, granted interim relief preserving the status quo pending adjudication.

Thereafter, Petrosin invoked the arbitration agreement by commencing arbitration under the ICC Rules and also filed an Enforcement Petition under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, seeking recognition and enforcement of the arbitration agreement, together with interim and conservatory measures pending the arbitral proceedings.

Court records show that the GSPA contains an arbitration clause requiring disputes to be resolved under the ICC Rules of Arbitration before a tribunal seated in London.

The case adds to a growing list of international commercial arbitrations involving Pakistan’s energy sector. In recent years, Pakistan and several state-owned energy companies have faced significant financial exposure in international arbitration proceedings arising from disputes over energy supply contracts and power projects.

Experts believe that the outcome of the Petrosin-Mari dispute could have implications for contractual certainty in Pakistan’s gas market, particularly regarding long-term gas supply agreements between producers and industrial consumers.