Pakistan’s government has approved a fresh allocation of Rs330.5 million to cover legal and insurance costs tied to a long-running dispute that saw two of its national cargo ships detained in South Africa.
The payment, cleared by the Economic Coordination Committee (ECC), is part of ongoing efforts to settle litigation connected to a claim filed by Coniston Ltd against Pakistan Steel Mills (PSM).
How the Dispute Began
The case dates back to 2017, when Coniston Ltd lodged claims over PSM liabilities, leading a South African court to detain two vessels belonging to the Pakistan National Shipping Corporation (PNSC) — MV Chitral and MV Hyderabad.
The ships were eventually released after PNSC provided security guarantees backed by the government of Pakistan. At that time, Islamabad also agreed to indemnify PNSC against any negative court rulings, a move endorsed by the ECC.
Rising Costs and Insurance Burden
Since then, the financial burden has mounted. PNSC has already spent Rs479.3 million on legal fees and a surety bond premium to secure the release of the ships. An additional $290,200 in insurance premiums became due in July 2025, prompting the latest request for government support.
In total, PNSC has been reimbursed Rs149 million so far, but escalating litigation costs have forced another round of funding approval to sustain legal representation and insurance coverage.
Government Stake and Negotiations
The PNSC, a statutory corporation created under the 1979 ordinance and 87.35% government-owned, has been at the center of this maritime dispute for years.
In 2020, the Ministry of Maritime Affairs and the Attorney General’s office set up a committee to negotiate a settlement with Coniston. The claimant’s initial demand of $15 million has since been brought down to a recommended range of $6–11 million.
The newly approved Rs330.5 million, released as a technical supplementary grant in the final quarter of the fiscal year, will ensure the continuation of Pakistan’s legal defense while negotiations continue.
