Nokia may invest $300m in Pakistan

However, informed sources said that Pakistan has been asked by Finland to early finalise a bilateral investment agreement to help Nokia phone company to invest $300 million within this year.

Final round of talks between the two countries is expected to be held in Islamabad shortly to sign the agreement. Earlier, both side had met in Finland last year.

However, Pakistan has certain reservations over Nokia's demand that in case of a dispute Islamabad should accept arbitration only in the "International Court of Settlement of Investment Dispute".

The government, sources said, wanted that such dispute settlement could be sought in other international forums as well including those of the UN and the UK.

But Pakistan has, in principle, agreed that in case of a dispute, foreign investors could seek international arbitration in the proposed bilateral investment agreement.

Pakistan was also opposing the demand of Finland that arbitration clauses should be allowed to be invoked with retrospective effect.

"We would not agree on that as it can cause a loss of millions of dollars to the national exchequer", a source said adding that various disputes worth $800 million were already pending against Pakistan and agreeing on retrospective clause could further financially burden the country.

Pakistan has been calling upon foreign investors to first seek the intervention of Pakistani courts for dispute resolution. "We still are asking them to first exhaust local remedies before seeking any international arbitration", he said regretting that the foreign investors including Nokia were not willing to accept local remedies on the plea that Pakistani courts were not independent.