ISLAMABAD: Saudi and Kuwaiti buyers in Ok-Electrical have initiated a $2 billion worldwide arbitration case in opposition to Pakistan, citing regulatory interference, unpaid authorities dues, and the extended blocking of a $1.77 billion sale of the nation’s largest personal energy utility.
Filed on January 16, 2026, the arbitration is being dealt with by Steptoe Worldwide (UK) LLP and Omnia Technique LLP on behalf of 32 Saudi and 5 Kuwaiti entities, which collectively maintain a 30.7% oblique stake in Ok-Electrical. These buyers have been cornerstone shareholders because the firm’s privatization in 2005.
The dispute dates again to October 2016, when the buyers agreed to promote 66.4% of Ok-Electrical to Shanghai Electrical Energy Firm. Whereas Pakistani regulators initially supported the deal, it was stalled for greater than eight years resulting from alleged shifting regulatory necessities, contradictory directions from authorities companies, and delays in acquiring nationwide safety and different approvals. Traders argue these delays finally brought on Shanghai Electrical to desert the deal, claiming oblique expropriation underneath worldwide legislation.
The arbitration additionally highlights long-standing unpaid authorities receivables, together with tariff differential subsidies owed to Ok-Electrical, some courting again practically 20 years. Traders say these overdue funds have severely impacted the utility’s money flows, whereas the federal government continued to levy penalties for late funds.
Moreover, buyers accuse the Pakistani authorities of undermining NEPRA, the nation’s energy regulator, by politicizing Ok-Electrical’s multi-year tariff framework.
They declare the federal government did not notify NEPRA’s Might 2025 tariff determinations, reopened settled issues by way of flawed evaluation processes, and imposed revised tariffs described as confiscatory, probably costing Ok-Electrical round Rs85 billion yearly and threatening its monetary viability.
The submitting additional factors to makes an attempt by home buyers to grab management of Ok-Electrical by way of offshore constructions, undisclosed possession adjustments, and regulatory violations, regardless of repeated complaints to regulators.
Traders additionally raised issues over $66 million from the sale of shares in Cnergyico being diverted offshore with out approval, with Pakistani regulators allegedly failing to behave regardless of a number of alerts.
The buyers argue that Pakistan has breached a number of provisions of the OIC Funding Settlement, together with protections in opposition to expropriation, truthful therapy, free switch of funds, and entry to efficient treatments. They’ve additionally invoked rights underneath Pakistan’s bilateral funding treaties with Bahrain and Switzerland by way of the most-favoured-nation clause.
The case poses a significant authorized problem for Pakistan, with potential implications for its regulatory framework and its capacity to draw international funding within the vitality sector.
