KARACHI – Key gas pipeline deal between Pakistan and Itan faced multiple delays amid geopolitical issues and international sanctions, and now Tehran issued a final ultimatum to Islmabad.

The pipeline, which stretches over 1,900 km remains, halted for a long time while Iran claimed putting $2 billion to construct infrastructure on its side of the border.

The Gas Sales Purchase Agreement (GSPA), established in 2009 under French law, specifies that the Paris Arbitration Court is the designated forum for resolving disputes, as it does not recognize U.S. sanctions.

Under a revised contract signed in September 2019, Iran agreed not to seek international arbitration for delays if Islamabad completed its pipeline section by 2024. Despite an extension of 180 days, which expires in September 2024, Pakistan has not met its obligations, leading Iran to issue this final notice.

If Iran does not act by September 2024, it risks forfeiting its right to legal recourse. 

Meanwhile, Pakistan officials mull approaching international law firms to prepare their case for arbitration, citing sanctions from Washington as a significant obstacle.