Karachi: K-Electric Limited, the largest integrated power utility in Pakistan, has announced the receipt of an Arbitration Notice by its indirect shareholders against the Government of Pakistan. This development was disclosed on January 21, 2026, in a statement by Rizwan Pesnani, Chief Risk Officer and Company Secretary of K-Electric, in compliance with the Securities Act, 2015, and the regulations of the Pakistan Stock Exchange Limited. According to the information provided, K-Electric itself is not a party to these arbitration proceedings.
The Arbitration Notice, issued by prominent Saudi and Kuwaiti investors including Abdulaziz Hamad A Aljomaih and Combined National Industries Holding Company for Energy K.S.C., requests the commencement of arbitral proceedings to resolve their disputes with the Government of Pakistan. The investors are seeking compensation of at least USD 2 billion, alleging breaches of the OIC Investment Agreement. They claim the government, through its actions and inactions, has blocked a USD 1.77 billion exit transaction and withheld payments lawfully owed to K-Electric for extended periods.
According to information available from the Pakistan Stock Exchange (PSX), K-Electric has been a pivotal entity in the local electricity market, having modernized and expanded its capacity significantly since its privatization. The Saudi and Kuwaiti investors contend that despite their substantial investments, they have not received any dividends, opting instead to reinvest all profits back into the company. They allege that the state’s regulatory obstacles and failures to uphold legal and treaty commitments have rendered their investment commercially unviable.
The arbitration proceedings are grounded in the Arbitration Rules of the United Nations Commission on International Trade Law, with the claimants emphasizing breaches such as indirect expropriation and denial of justice. The Notice of Arbitration highlights the government’s alleged failure to provide the necessary approvals for a significant sale transaction, as well as discriminatory practices that have hindered the transfer of funds and restricted the investors’ control over their capital.
The claimants express that they have pursued all possible avenues for resolution, even engaging in mediation with government entities, the results of which remain unimplemented. Despite commitments from the highest levels of the Pakistani government, the issues persist, prompting the investors to seek arbitration as a last resort to safeguard their investments in K-Electric.