Strictly Private & Confidential

RIAA Barker Gillette

D-67/1, Block 4
Clifton
Date: [***] 2023
Karachi
Our Ref: AMD.EXK/9926.074
DDI: +44 (0) 20 7299 6949
Email: evangelos.kyveris@riaabg.com
BY EMAIL ONLY TO:

Dear Sirs

Re: Liberty Daharki Power Limited

You have asked us to opine on certain issues relating to limitation periods for a claim for breach of
contract and an expert determination as detailed below.

1. INTRODUCTION – OUR UNDERSTANDING FROM INFORMATION PROVIDED BY YOU

1.1 We have been provided with a Gas Supply Agreement dated 1 September 2000
(Agreement) entered into between your client, Liberty Daharki Power Limited (LDPL),
under its earlier company name, Liberty Power Limited, and Sui Northern Gas Pipelines
Limited (SNGPL) for the purchase of Gas by LDPL from SNGPL from the Qadirpur Gas Field.
Both LDPL and SNGPL are both public limited companies incorporated in Pakistan. The
Agreement is governed by the laws of England and Wales.

1.2 We have also been provided with the following:

1.2.1 Deed of Amendment No. 1 to the Agreement dated 23 February 2001

entered into between LDPL and SNGPL (Deed of Amendment). The Deed of
Amendment provides that Article IV of the Agreement (Security Deposit) is
deleted and replaced in its entirety, and that the provisions of Articles IX
(Resolution of Disputes) and XII (Miscellaneous Provisions) of the Agreement
shall apply to the Deed of Amendment and all other provisions of the
Agreement remain unchanged and are ratified and affirmed by the parties.
The Deed of Amendment is governed by the laws of England and Wales.

1.2.2 Notice from the Government of Pakistan (GoP), Ministry of Energy

(Petroleum Division), Directorate General of Gas, to LDPL and SNGPL dated
17 February 2023 (GoP Notice) in relation to the appointment of Expert
Adjudicator for the resolution of the dispute on the imposition of liquidated
{AD/B2172908-6}
 damages by LDPL to SNGPL on account of failure to supply raw gas as per the
specifications prescribed in the Agreement (Claim);

1.2.3 Notice from LDPL to SNGPL under Article IX(2) of the Agreement dated 3
March 2023 in relation to the Claim (LDPL Notice);

1.2.4 Notice from SNGPL to LDPL dated 20 March 2023 in response to the LDPL
Notice (SNGPL Notice);

1.2.5 Invoice from LDPL dated 12 July 2011 (LDPL Invoice); and

1.2.6 Correspondence between LDPL and SNGPL during the period of 11

November 2010 and 20 March 2020 in relation to the Claim
(Correspondence).

1.3 We are instructed that SNGPL was in breach of the Agreement, specifically Article II(A) by
failing to make available to LDPL up to 50 MMSCFD of gas adjusted to base pressure of
14.65 psia during an extended period from 2010 through to 2013.

1.4 Claims for damages were made by LDPL in relation to the breaches of Article II(A) in
accordance with Article VIII(D), which stipulates the provision by LDPL to SNGPL of an
invoice restricted to claiming damages as stipulated in sub-clauses (i) and (ii) of Article
VIII(D). We understand that the LDPL Invoice was the first invoice sent, but that further
invoices were sent throughout the period of breach up to 2013.

1.5 In the GoP Notice it states that the parties have exhausted options (a) & (b) under Article
IX(1) of the Agreement in relation to the Claim and requests to proceed further for the
appointment of an Expert Adjudicator pursuant to Article IX(2) of the Agreement within
30 days from the date of the GoP and complete the process for recommendations within
60 days of the engagement of the Expert Adjudicator. The GoP Notice states that the
parties are not compelled to mediate the dispute under Article IX(2) of the Agreement
and they may elect to commence Arbitration in relation to the Claim in accordance with
Article IX(3) of the Agreement.

1.6 In the LDPL Notice, LDPL proposed the appointment of Mr Justice Maqbool Baqar as the
Expert Adjudicator to resolve the Claim pursuant to Article IX of the Agreement and
requested SNGPL to confirm its position on LDPL’s proposal within 15 days of receipt of
the LDPL Notice.

1.7 In the SNGPL Notice, SNGPL deny the Claim on the basis that it is time barred and has
otherwise no merit and does not consent to the Expert Adjudicator procedure proposed
by LDPL. SNGPL further explained that it would consent to the appointment of Mr Justice
Maqbool Baqar as legal expert to provide a non-binding determination on the preliminary
question of whether the relevant claims are time barred.

1.8 The Correspondence is comprised of various letters, notices and other documents
exchanged between LDPL and SNGPL in relation to the Claim and, also, the issue of non-

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 execution/non-extension of the Agreement, which is also referred to in the GoP Notice,
but does not fall within the scope of this opinion letter in accordance with ¶2 below.

1.9 All capitalised terms used but not defined in this legal opinion will bear the meanings given
to these terms in the Agreement.

2. QUERIES

You have raised the following queries in connection with the Claim (Queries):

2.1 What is the limitation period under English law for a claim for breach of contract (Query
1).

2.2 For the purposes of the Limitation Act 1980, is a claim for breach of the Agreement a claim
for breach of a simple contract or a claim on a speciality? (Query 2).

2.3 Does the limitation period apply to expert or arbitration proceedings under the
Agreement? (Query 3).

2.4 Does the limitation period for expert or arbitration proceedings stand extended on
account of the LDPL Notice, the SNGPL Notice and the Correspondence exchanged
between LDPL and SNGPL and, if so, until when? (Query 4).

2.5 Assuming the limitation period runs from the accrual of the cause of action (and the timing
of expert determination has no bearing on limitation periods) does the applicable
limitation period run from: (i) the date of the breach of the primary obligation to deliver
gas; or (ii) the due payment date for any sums due as a consequence of that breach; or
(iii) some other date (Query 5).

2.6 May parties agree to suspend the limitation period from running (Query 6)?

3. DOCUMENTS EXAMINED

3.1 We have been provided with the Agreement, Deed of Amendment, GoP Notice, LDPL
Notice, SNGPL Notice. LDPL Invoice and Correspondence (together the Documents) in
order to opine on the Queries.

3.2 You have explicitly requested us not to review the Documents in any detail and to only
refer to them insofar as we consider necessary in order to respond to the Queries. On that
basis, we have not read the Documents in their entirety, but we have instead used
heading and word searches to locate provisions that appear to be of relevance to the
Queries. We have not reviewed any documents other than the Documents.

4. LIMITATIONS, ASSUMPTIONS AND RESERVATIONS

4.1 This letter is subject to the limitations and exclusions set out in Schedule 2 hereto
(Limitations and Exclusions) and is governed by and shall be construed in accordance with
English law.

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4.2 The opinions set out below:

4.2.1 have been made on the assumptions in Schedule 3 hereto (Assumptions);

and

4.2.2 are subject to the reservations set out in Schedule 4 hereto (Reservations).

4.3 References to particular Query numbers are for convenience only and shall not alter the
construction of this letter, nor in any way limit the effect of any of the advice, all of which
is provided in relation to all the Queries as a whole. A response to a particular Query shall
be deemed to be made also in respect of any other Queries to which the response and
opinion may be applicable.

5. OPINION

Based on our review of the Documents and on the Assumptions, and subject to the
Limitations and Exclusions and Reservations, our opinion on the Queries is as follows:

Query 1

5.1 The limitation period for a claim for breach of a simple contract is 6 years from the date
of accrual of the cause of action1. As explained in more detail under Query 4 below, the
cause of action accrues on the date of the breach of contract.

5.2 Where a contract is executed as a deed, the limitation period is extended to 12 years from
the date of accrual of the cause of action2. The Limitation Act 1980 refers to actions on a
“speciality”, which term is not defined in the Act, but is generally understood to mean a
document under seal. Since the requirement for all deeds to be made under seal was
abolished by the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989),
there was some uncertainty as to whether deeds which are not sealed qualified as
specialties but this was resolved in Liberty Partnership Ltd v. Tancred3 where the court
confirmed that a seal was no longer necessary to make a deed a specialty provided it
complied with the requirements for a valid deed specified in section 1 LP(MP)A 1989
(which is to be read in conjunction with sections 43-46 Companies Act 2006 as modified
by the Overseas Companies (Execution of Documents and Registration of Charges)
Regulations 2009/1917 (OC Regulations)4.

Query 2

5.3 The following facts are relevant:

1 Limitation Act 1980, section 5 (Time limit for actions founded on simple contract).
2 Limitation Act 1980, section 8 (Time limit for actions on a specialty).
3 [2018] EWHC 2707 (Comm)
4 As explained below under Query 2, for the purposes of the Agreement and the Deed of Amendment,
ss.43-46 Companies Act 2006 and the OC Regulations do not apply as they were not in force at the
time of execution. The relevant provisions, which are addressed below, are s.36A Companies Act
1985 as modified by The Foreign Companies (Execution of Documents Regulations 1994 (1994/950)
(FC Regulations).

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 5.3.1 The Agreement is not named as a deed on its face and is not stated in the
document to be executed as a deed.

5.3.2 The Agreement makes no reference within the document to it being a deed
or treated as a deed. This is to be contrasted with the Deeds of Amendment
which is expressed to be a deed.

5.3.3 The Agreement is executed by Mr Raha A. Wahid, Managing Director on

behalf of SNGPL and his signature is witnessed by two witnesses.

5.3.4 The Deed of Amendment is executed by Mr Jawed Hussain, Managing

Director on behalf of SNGPL and his signature is witnessed by two witnesses.

5.4 As noted above, the term “speciality” is not defined in the Limitation Act 1980, but it is
generally understood to mean a document under seal. Since Liberty Partnership Ltd v.
Tancred, it is settled law that a seal is no longer necessary to make a deed a specialty
provided it complies with the requirements for a valid deed specified in section 1 LP(MP)A
1989 (which is to be read in conjunction with the secondary statutory route under
Companies legislation).5

5.5 For the purposes of the Agreement and the Deed of Amendment, the relevant statutory
provisions are section 36A Companies Act 1985 (as amended) modified by the FC
Regulations. As modified, s.36A reads as follows:

(1) Under the law of England and Wales the following provisions have effect with respect to the
execution of documents by a company.
(2) A document is executed by a company by the affixing of its common seal or if it is executed in
any manner permitted by the laws of the territory in which the company is incorporated for the
execution of documents by such a company.
(3) A company need not have a common seal, however, and the following subsections apply
whether it does or not.
(4) A document which—
(a) is signed by a person or persons who, in accordance with the laws of the territory in
which the company is incorporated, is or are acting under the authority (express or implied)
of that company, and
(b) is expressed (in whatever form of words) to be executed by the company,
has the same effect in relation to that company as it would have in relation to a company
incorporated in England and Wales if executed under the common seal of a company so
incorporated.
(5) A document executed by a company which makes it clear on its face that it is intended by the
person or persons making it to be a deed has effect, upon delivery, as a deed; and it shall be
presumed, unless a contrary intention is proved, to be delivered upon its being so executed.

5 As explained below under Query 2, for the purposes of the Agreement and the Deed of Amendment,
ss.43-46 Companies Act 2006 and the OC Regulations do not apply as they were not in force at the
time of execution. The relevant provisions, which are addressed below, are s.36A Companies Act
1985 as modified by The Foreign Companies (Execution of Documents Regulations 1994 (1994/950)
(FC Regulations).

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 (6) In favour of a purchaser a document shall be deemed to have been duly executed by a company
if it purports to be signed a person or persons who, in accordance with the laws of the territory in
which the company is incorporated, is or are acting under the authority (express or implied) of that
company, and, where it makes it clear on its face that it is intended by the person or persons
making it to be a deed, to have been delivered upon its being executed.
A “purchaser” means a purchaser in good faith for valuable consideration and includes a lessee,
mortgagee or other person who for valuable consideration acquires an interest in property.
5.6 In ordered to determine whether the Agreement is to be treated as a simple contract or
a speciality, it is necessary to show:

5.6.1 whether it was duly executed in accordance with Pakistan law to satisfy one
of the tests under s.36A(2) and (4); and, if so

5.6.2 whether the Agreement makes it clear on its face that it is intended by the
person or persons making it to be a deed has effect, upon delivery, as a deed
(s.36A(5) Test).

5.7 On the first question, this is a matter of Pakistan law upon which we are unable to opine.
For the purposes of this opinion, we have assumed that one or both of the tests have been
satisfied as a matter of Pakistan law, but we advise that this is checked and confirmed by
you. The answer to this question depends on whether the Managing Director has
authority (or in some way was conferred with authority) to execute the Agreement as a
deed or otherwise.

5.8 On the second question, we believe that a court or arbitral tribunal would most likely
conclude that the s.36A(5) Test is not satisfied having regard to the Agreement alone. The
s.36A(5) Test is substantially the same as the test under s.1(2) LP(MP)A 1989. In HSBC
Trust Company (UK) Ltd v. Quinn6, the court considered the issue of whether an
agreement was a deed tested by reference s.1(2) LP(MP)A 1989. The court accepted that
a document could be a deed even if the term “deed” did not appear within the document,
but concluded that in this case the agreement was not a deed. The following passage of
the judgment is important:

“49. Mr Wonnacott says that the 2004 agreement does not make it clear on its face that
it is intended to be a deed. It does not describe itself as a deed; it is not expressed to be
executed or signed as a deed; and it does not otherwise make it clear that it is intended to
be a deed.

50. I accept this submission. Mr Schmitz showed me a passage from the Law Commission
Report which led to the 1989 Act (Law Com No 163 on Deeds and Escrows dated 29 June
1987) in which at paragraph 2.16 the Law Commission explained that they considered that
documents should not acquire the different status of being deeds unless this was patently
intended by the parties and hence that this should be clear on the face of the document;
that this would generally be clear because the word deed would appear somewhere on
the document, but that it was not intended that such words should be essential so that the
provision

“would still leave a court free to decide whether or not a document was intended to be a

6 [2007] EWHC 1543 (Ch)

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 deed where a different formula was used, but only where there was evidence for such a
finding within the document itself.”

I accept that this was the intention, which I think is plain enough from the wording of the
Act itself (which on this point at any rate follows the wording of the draft bill annexed to
the Law Commission Report). But it does not help to identify what other indications in a
document might suffice to persuade a court that it was intended to be a deed. Mr Schmitz
also referred me to what the Lord Chancellor, Lord Mackay of Clashfern, said when moving
the second reading of the bill in the House of Lords, which was to the effect that it was
undesirable to lay down just one method of indicating that a document is intended to be
a deed “because to do so would invalidate what would otherwise be perfectly acceptable
deeds merely for failure to include one vital word.” I am not at all sure that this is strictly
admissible, but it was not objected to; it too however takes the matter no further than
what is apparent from the wording of the Act. It seems to me plain that the Act provides
that documents can be deeds without using the word “deed”; but on the other hand that
a document is only to be held to be a deed if it is clear from the wording of the document
itself (“on its face”) that it was intended to be a deed.

51. Mr Schmitz relies on a number of factors as indicating that the parties intended it to
be a deed. First, the language is appropriate to a formal document, beginning for example
with “We the undersigned” and giving the price in both numbers and words; second the
parties have given their full names and addresses, and in Mrs Bray’s case signed it with
her full name “Joan Mary Bray”, which is a more formal signature that she used, for
example, on her will, as opposed to “Mary Bray” which was how she signed her cheques;
and third, that care was taken to see that the signatures were witnessed and the witnesses
gave their names and addresses. I fully accept that these are all indications that the
document was intended to be a formal one and no doubt intended to have formal legal
effect. But I do not regard any of them, singly or together, as any indication that the parties
intended it to take effect as a deed, let alone as making it clear on the face of the document
that they did. All that they show is that the parties intended it to be legally binding, and in
my judgment this is plainly not enough; what is needed is something showing that the
parties intended the document to have the extra status of being a deed. It is perhaps
unlikely that a document drawn up by non-lawyers would happen to do this (although not
impossible — one can envisage a layman following a pre-1989 precedent that was clearly
a deed but did not use the word) — but whether or not this is so, in my judgment the
document signed by Mrs Bray in early 2004 does not qualify as a deed. Nor do the earlier
documents signed by her in March 1998 and December 2003 to which similar
considerations apply.

There is nothing we have seen that would in our view show that the Agreement would be
treated any more favourably than the agreement in the above case and we can see no
feature, which might arguably be said to evidence a clear intention on the part of the
parties to treat the Agreement as a deed.

5.9 Were nothing else to have occurred, we believe that a court or arbitral tribunal would
most likely conclude that the Agreement was executed a simple contract and not a
speciality. However, there is one potential fact, which might have impact on our opinion.
The Deed of Amendment clearly is a document expressed to be and intended as a deed.
Under English law, assuming that it satisfies the tests under s.36A(2) and/or (4), the Deed
of Amendment would in our view be regarded as a deed.

5.10 Clause 2 of the Deed of Amendment it states as follows:

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 “All of the provisions of the Gas Supply Agreement not referenced herein 7 remain
unchanged and are hereby ratified and affirmed by the Parties.”

It is not clear what is intended to be meant by the term “ratified and affirmed”8, but it is
possible that this may have legal significance in terms of the status of the Agreement. By
affirming the obligations under the Agreement through execution and delivery of a
subsequent deed, it might be arguable that the status of the Agreement has been
converted to that of a speciality by that later deed. In the time available we have not
uncovered any case law on point and this is a difficult and complex question of law, which
might not have any precedent to inform the answer. Given the importance of the issue,
we believe that advice from counsel specialising in corporate and contract law is
instructed to opine on this issue.

5.11 In summary our conclusion is as follows:

5.11.1 Pakistan law advice is required to determine whether the execution of the
Agreement and the Deed of Amendment satisfied the tests under s.36A(2)
and/or (4).

5.11.2 The Agreement on its face is most likely not a deed having regard to the
s.36A(5) Test.

5.11.3 There is a potential argument that the Agreement may convert into a
speciality having regard to clause 2 of the Deed of Amendment but, if this
argument is to be explored, we recommend that specialist counsel is
instructed to advise upon.

Query 3

5.12 Article IX(1) of the Agreement provides that:

5.12.1 “in the event of a dispute, the Parties shall attempt in good faith to settle such
dispute by mutual discussions within thirty (30) Days after the date that the
disputing Party gives notice of the dispute to the non-disputing Party” (Article
IX(1)(a)); and

5.12.2 if the dispute is not resolved within the time period set out in Article IX(1)(a),
“either Party may (but shall not be compelled to) refer the dispute to the chief
executive officer or chief operating officer of the Purchaser and the Seller (or
another authorized director or officer designated by notice to the Purchaser
or to the Seller in writing) for further consideration and attempted resolution

7 The relevant obligation alleged to have been breached is not referenced in the Deed of Amendment.
8 It cannot be said to have the effect of restating the terms as the language of the second sentence of
clause 2 is to be contrasted with the first sentence which incorporates Articles IX and XII of the
Agreement.

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 within fifteen (15) Days after the dispute has been referred to such individuals
(or such longer period as the Parties may agree)” (Article IX(1)(b)).

5.13 Article IX(2)(a) of the Agreement provides that “in the event that the Parties are unable to
resolve a dispute in accordance with Article IX(l) and the periods set forth therein, then
either Party, in accordance with this Article IX(2), shall refer the dispute if the dispute
pertains to an invoice or the fixing of price of Gas in the event of deregulation as
contemplated by Article IIl(C) and may refer the dispute in any other case to an expert
adjudicator (the "Expert Adjudicator") for consideration of the dispute and to obtain a
recommendation from the Expert Adjudicator as to the resolution of the dispute; provided,
however, that, unless the dispute is of a type required by the Agreement to be referred to
an Expert Adjudicator under this Article IX(2), neither Party shall be compelled to mediate
the dispute pursuant to this Article IX(2) and either Party may elect to commence
arbitration of the dispute in accordance with Article IX(3), in which case the provisions of
Article IX(3) shall govern”.

5.14 Article IX(2)(f) of the Agreement provides that “[…] Unless the Parties agree in a writing
signed by both Parties at the time the Expert Adjudicator is selected stating that the
decision of the Expert Adjudicator will be binding, the determination of the Expert
Adjudicator shall not be binding”.

5.15 Although there is no case law that has directly addressed the question whether the
limitation periods prescribed by the Limitation Act 1980 apply to expert determination
proceedings, there are court decisions that support the view that the Limitation Act 1980
does not apply to expert determination proceedings9. On that basis, the limitation periods
prescribed by the Limitation Act 1980 will potentially not apply to expert determination
proceedings under the Agreement. However, as the appointment and the determination
of the Expert Adjudicator are non-binding under the Agreement, the limitation periods
prescribed by the Limitation Act 1980 will apply to arbitration proceedings under the
Agreement.

5.16 On the expert determination proceedings, as suggested by the court in Bastholm & Ors v
Peveril Securities (Dalton Park Retail) Ltd & Ors 10, the exercise of the right to apply for
expect determination is subject to contractual principles of reasonable time in
circumstances where the contract itself is silent on timescales. As the Agreement is silent
on timescale for the appointment of the Expert Adjudicator, the parties’ right to apply for
such appointment is subject to contractual principles of reasonable time. The issue of
whether LDPL’s application for the appointment of Expert Adjudicator satisfies the
reasonableness test is a matter to be determined by a court or arbitral tribunal by
reference, inter alia, to the facts specific in this case.

9 Braceforce Warehousing Ltd v Mediterranean Shopping Company (UK) Ltd [2009] EWHC 3839;
Austin Hall Building Ltd v. Buckland Securities Ltd [2001] EWHC Technology 434; Bastholm & Ors
v Peveril Securities (Dalton Park Retail) Ltd & Ors [2023] EWHC 438 (Ch).
10 [2023] EWHC 438 (Ch)

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 Query 4

5.17 Please see our responses to Query 1 and Query 3 above. Our analysis is that the limitation
periods prescribed by the Limitation Act 1980 will potentially not apply to expert
determination proceedings, but will apply to arbitration proceedings under the
Agreement and the underlying claim for breach of contract. In either case, it appears that
the exchange of the LDPL Notice, the SNGPL Notice and the Correspondence between
LDPL and SNGPL, in and on itself, would not have any bearing on the applicable limitation
periods for such proceedings.

Query 5

5.18 The Claim concerns SNGPL’s alleged failure to deliver Gas in accordance with the terms
and conditions of this Agreement. The primary obligation is to deliver Gas in accordance
with the terms and conditions of the Agreement. The failure to so deliver the Gas is a
breach of that primary obligation.

5.19 Under common law, absent an express obligation, the law imposes a secondary obligation
on the contract breaker to pay damages for breach of the primary obligation. Clause
VIII(D) expressly provides for that secondary obligation to pay damages subject to:

5.19.1 the express limitations of the amounts recoverable as stipulated in the two
sub-clauses (effectively confining damages to replacement gas cost and any
liquidated damages suffered by LDPL as a result of the non-delivery of Gas);
and

5.19.2 the condition that payment be made 10 days after receipt of an invoice from
LDPL.

Article VIII(D) of the Agreement reads as follows:

“If the Seller fails to deliver Gas in accordance with the terms and conditions of this
Agreement, or is unable to deliver Gas[…] the Seller be liable to pay to the Purchaser within
ten (10) Days from receiving an invoice therefor, any and all reasonable costs, damages,
or losses incurred by the Purchaser in so far as such costs, damages, or losses are
attributable to such failure by the Seller. The Seller's liability to the Purchaser for such
failure or non-delivery of Gas shall be restricted to the following:

(i) the Purchaser's Alternate Fuel Costs for Alternate Fuel utilized in the Complex during
the period of the Seller's failure to deliver Gas (Article VIII(D)); and

(ii) to the extent that the Purchaser has incurred any liquidated damages for forced
outages, partial derating or failure to achieve despatch levels and/or lost capacity
payments (which the Purchaser would otherwise have received from WAPDA), only
to the extent of that portion of the capacity payments which relate to the
Purchaser's debt service and fixed operating costs under the Power Purchase
Agreement (as substantiated through the Purchaser invoices and supporting

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 information); provided that the fixed operating costs shall be reviewed (as to their
reasonableness) and approved by the Seller before payment”. [our emphasis]

5.20 We understand that the alleged breaches of the primary obligation occurred during a
period from 2010 to 2013. As the obligation to provide gas up to 50 MMSSCFD adjusted
to base pressure of 14.65psia is expressed to continue for the duration of the Agreement,
any failure to achieve the required gas provision will be a breach at the point in time when
the supply does not meet the requirements. We understand that the failure to provide
gas at the required pressure persisted throughout the period 2010 to 2013 and therefore
there are continuing repeated breaches throughout that period all of which breaches give
rise to an independent cause of action for breach of contract.

5.21 The first issue to address is whether a claim for breach of contract is subject to a 6 or 12
year limitation period. If the limitation period is 6 years, then the second issue identified
below will be academic as whatever the answer the second issue, the limitation period
will have expired a number of years ago. Please see are opinion under Query 2 above in
relation to this issue.

5.22 Assuming it can be established that a claim for breach of the Agreement is a claim on a
speciality to which section 8 Limitation Act 1980 applies, the second issue is whether the
limitation period runs from the dates of breach of the primary obligation (the date(s) of
non-delivery of the Gas) or from the dates of breach of the secondary obligation (non-
payment by the due date for payment). If the former, the limitation period will have
expired in relation to those breaches occurring prior to May 2011 and any claim in respect
of those breaches of contract could be defeated by the defence of limitation; if the latter,
the limitation period expires in July 2023 at the earliest. Two points of importance to be
noted:

5.22.1 no claim will survive is the claims are found to be based on simple contracts
and not specialities;

5.22.2 the clock is ticking and with each day of delay, the limitation period for
potential claims for breach of the primary obligation may expire.

5.23 For the reasons set out at ¶¶5.25 to 5.32 below, we believe that a court or arbitral tribunal
would most likely conclude that the limitation period expired 12 years after the date of
breach of the primary obligation under Article II(A) and not the due date for payment of
the invoices rendered pursuant to Article VIII(D).

5.24 Section 8 Limitation Act 1980 (which mirrors the language of section 5 save for the length
of the limitation period) provides that an action upon a specialty shall not be brought after
the expiration of twelve years “from the date on which the cause of action accrued”.

5.25 The “date on which the cause of action accrued” is not defined in the statute. It is,
however, a long-established principle that the basic rule in contract is that the right of
action accrues as soon as there is a breach of contract, notwithstanding that at that time

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 no damage (beyond the purely nominal) has been suffered by the claimant11.

5.26 The Claim in this case is a claim for damages for breach of the primary obligation. The
secondary obligation expressed under Clause VIII(D) to pay damages is not a freestanding
contractual right or claim as it is concerned only with the remedy for breach of the primary
obligation. The secondary obligation to pay damages (whether liquidated or unliquidated)
does not give rise to a debt12 such as to make it a freestanding claim.

5.27 We can see no compelling reason why, for the purposes of a limitation period, there
would be any difference in treatment between a claim for damages relying on the implied
secondary obligation to pay damages and a claim for damages relying on an express
obligation whether or not the payment obligation was conditioned on receipt of an
invoice.

5.28 A court or arbitral tribunal would most likely conclude that clear words were required to
displace the normal rule as to the timing of accrual of a cause of action so as to give a
creditor control over the start of the limitation period by having delivery of an invoice as
a trigger point. In ICE Architects Ltd v. Empowering People Inspiring Communities13
Lambert J stated as follows:

“24. Further, I accept Mr Finn’s submission that the obiter statement of Lord Neuberger
in Henshaw, that clear words are needed if the timing of the accrual of the cause of action
in an action for work or services is to be displaced, is relevant. Mr Wright relies upon the
requirement in the letter that invoices should be provided by ICE each month as an answer
to the potential mischief that otherwise the creditor would have control of the time at
which the limitation period starts running. However, this is not a satisfactory answer to
the point. Chitty LJ in Coburn was clear that the central purpose of the statutory limitation
regime is to provide the creditor with a degree of protection by the certainty (my emphasis)
of a fixed period during which a claim can be brought and to avoid the Courts becoming
embroiled in collateral issues such as, in the context of Coburn, whether there was
unreasonable delay in submitting a bill of costs or, in the context of the appeal, whether
the invoice had, in fact, been delivered within a month of completion of the relevant work;
if not, whether there was a reasonable explanation or excuse; whether the Respondent
had paid within 30 days or “endeavoured” to do so, or otherwise stated (which is the
relevant term in the letter of 10th July 2007). In these circumstances, it seems to me that
clear words are needed if the Court is to construe an agreement between the parties in
such a way as to give the creditor control over the start of the limitation period and/or to

11 See Gibbs v Guild (1881) 8 Q.B.D 296 per Field J: “It was well settled that in actions on assumpsit the
time ran from the breach of the contract, for that was the gist of the action, and the subsequent
damage, though happening within six years next before the suit, did not prevent the application of
the statute.”
12 See President of India v. Lips Maritime Corp [1988] AC 395 which concerned a claim for the
secondary obligation to pay demurrage; and El Makdessi v Cavendish Square Holdings BV [2015]
UKSC 67 which concerned a claim for the secondary obligation to pay liquidated damages.
13 [2018] EWHC 281 (QB) ¶¶22-28. This decision and the above quoted passage were recently cited
with approval by the Court of Appeal in Consulting Concepts International Inc v. Consumer
Protection Association (Saudi Arabia) [2022] EWCA Civ 1699.

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 avoid the Courts becoming engaged in determining satellite issues which deprive the
limitation provisions of their central purpose: certainty and the avoidance of stale claims.
Such clear words do not appear in the letter.”

5.29 Whilst ICE Architects and Consulting Concepts International both concerned claims for
money due for services (as opposed to damages for breach of contract), we can see no
compelling reason for treating a claim for damages for breach of contract any differently.
The underlying logic, namely that the statutory limitation regime was designed to provide
certainty of a fixed period and to avoid the courts becoming embroiled in collateral issues
such as unreasonable delay in submitting an invoice, would most likely be applied to
claims for damages for breach of contract.

5.30 Clause VIII(D) does not include clear words (or indeed any words) displacing the normal
rule that the limitation period for a claim for damages for non-delivery of Gas did not run
from the date of breach and instead would only run from date of delivery of the invoice.

5.31 Were the limitation period to start only upon receipt of an invoice, then at least
theoretically, the Purchaser could delay the start of the limitation period indefinitely
thereby undermining the fundamental purposes of limitation periods and the objective of
certainty.

Query 6

5.32 It is possible for the parties to agree to suspend the limitation period from running by
contractual agreement as limitation is a defence that has to be pleaded and is not a
jurisdictional bar. Please see enclosed a template agreement, known as standstill
agreement, which is used by parties to suspend time for the purposes of limitation whilst
seeking to resolve disputes by alternative dispute resolution processes. However, once a
limitation period has expired, a contractual agreement seeking to suspend time from
running will serve no purpose as the defence of limitation will already be available.

Please do not hesitate to contact us should you require any clarification in relation to the above
matters or should you have any further queries.

Yours faithfully,

RIAA BARKER GILLETTE (UK) LLP

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 Schedule 1 – Limitations and Exclusions

1. We are not commenting on any typographical errors, erroneous cross-references, missing

definitions, capitalised terms which are undefined or anything similar contained within
the Documents or providing any advice or opinion:

1.1 with respect to the laws of any other jurisdiction (including any mandatory laws that
would override the parties’ choice of law) or Sharia law or any potential changes in English
law or the enforceability of any judgment or award made in connection with the
Documents in any jurisdiction outside of England & Wales;

1.2 in relation to any provision within the Documents which applies or is subject to any laws
other than English law;

1.3 as to the existence, scope or effect of any immunity from suit in favour of any party;

1.4 as to the capacity or authority of the parties (or any appointed signatories or attorneys)
to enter or execute the Documents;

1.5 as to the suitability or commerciality of the Documents or as to whether the Documents

are drafted so as to maximize the best interests of any party to any of the agreements
within the Documents;

1.6 as to the quality of the drafting (including without limitation missing cross-references) or
the likely interpretation of any of the provisions in the Documents, and where words,
expressions or abbreviations are utilised in the Documents that may not be capable of
precise determination as a matter of English law;

1.7 on domestic and/or foreign tax in connection with the Documents, to include stamp duty;

1.8 on title in respect of any movable or immovable assets or tangible or intangible assets;

1.9 whether there has been any breach of any of the Documents by any of the parties.

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 Schedule 2 – Assumptions

The opinions expressed in this letter have been made on the following assumptions:

1. All the parties and signatories to the Documents have the capacity and authority to
execute and deliver the Documents and all necessary corporate and other actions by any
such parties to authorise the due proper execution, delivery and performance have been
duly taken or complied with (or will be).

2. Each of the obligations of the parties to the Documents constitutes legally valid and
binding obligations of such parties enforceable against all parties thereto in accordance
with their terms under the laws of all applicable jurisdictions other than English law.

3. The copies of the executed Documents sent to us are genuine, complete and conform to
the originals and have been duly and properly dated, authorized, executed and delivered
by the relevant parties.

4. The Agreement has been duly executed as a matter of Pakistan law so as to satisfy the
statutory test under s.36A(2) and/or (4) Companies Act 1989 (as amended) as modified
by the FC Regulations.

5. The factual information provided to us and as recorded in our letter is correct.

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 Schedule 3 - Reservations

1. An English Court or arbitral tribunal will not necessarily grant a particular remedy because:

1.1 the principles of equity may dictate otherwise, for example, an order for the
equitable remedy of specific performance may not be made where damages are
considered to be an adequate remedy;

1.2 public policy requires otherwise; or

1.3 the court or arbitral tribunal otherwise has discretion as to what remedy it grants.

2. The procedural rules to which any action brought in an English Court is subject may be
such that a court declines jurisdiction or stays an action. For example, an English Court
will only assume jurisdiction to hear a case, and give judgment against a defendant, on
the basis of service. Where the defendant cannot be served, the English Courts will not
assume jurisdiction.

3. Any provision in the Documents for the payment of a specific amount or liquidated
damages in the event of a breach or default may be unenforceable if it amounts to a
penalty. The issue of whether the liquidated damages represents a genuine pre-estimate
of loss is a matter to be determined by a court or arbitral tribunal by reference, inter alia,
to whether the provision is extravagant and unconscionable with a predominant function
of deterrence and whether there is a commercial justification for the provision, and
statements by parties to that effect whilst of probative value will not be conclusive on the
issue.

4. A court or arbitral tribunal may refuse to treat as final, conclusive and/or binding any
notification, calculation, certificate or determination which is stated in any Document to
be final, conclusive and/or binding if it is shown to have an unreasonable or arbitrary
basis, or not to have been reached in good faith, despite a provision to the contrary.

5. There is no guarantee that our opinions as set out in this letter would be accepted by a
court or arbitral tribunal seized of the same issues. Litigation is subject to inherent risks,
one of which is that a court or tribunal may come to a different conclusion to the one that
is expressed here.

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