By IANS
Islamabad : Pakistan International Airlines (PIA) is to seek arbitration for resolving its dispute with Saudi Prince Faisal bin Khalid bin Abdulaziz Saud over the sale of his one percent share in the airline’s subsidiary PIA Investments Limited (PIAIL).
The move comes after a New York court Wednesday dismissed the prince’s lawsuit against the airline.
Pakistan’s Dawn newspaper Thursday quoted PIA chairman Zaffar A. Khan as saying the airline would seek arbitration in accordance with the shareholders’ agreement.
The Saudi prince, who holds 7,200 shares in PIAIL, which owns and manages the Roosevelt Hotel in Manhattan and the Hotel Scribe in Paris, had in his lawsuit accused PIA of interfering with his attempt to sell his shares.
Judge Naomi Reice Buchwald of the court of the Southern District of New York dismissed the plea.
Faisal had wanted to sell his shares for $8.6 million to Alpha Capital MC Limited and intimated his intention to PIAIL in March this year, offering the stock at the same price to the airline’s investment unit under his shareholder agreement of 1979.
On its part, PIAIL initiated the redemption process of the prince’s shares for $480,000 – much less than the offer he had received from the third party.
Dismissing the lawsuit, the judge observed that the plaintiff was a citizen and resident of Saudi Arabia and had not demonstrated any connections to New York.
Besides, the judge noted, the transactions had taken place abroad as did the alleged wrongdoing on the part of foreign defendants (PIA and PIAIL) and the law applicable was also foreign.
The judge also rejected the plaintiff’s contention that courts in British Virgin Islands, where PIA is registered, were ill-equipped to handle the dispute since the plaintiff had a pending suit in the Islands and had agreed to invest in a corporation registered there.