Litigation 2025 Comparisons

The Indian Independence Act 1947, under which Pakistan and India became two independent Dominions, stipulated that the law of British India would continue as the law of each Dominion until such time that their legislatures enacted new laws. To date, an overwhelming majority of Pakistani laws are the same ones that Pakistan had adapted at the time of independence. Since those laws were modelled on common law principles Pakistan’s legal system maintains a common law character. Through legislative and judicial interventions attempts were made in the eighties and early nineties to replace common law with Islamic common law; however, such initiatives met with limited success.

A striking feature of common law is its adversarial system, which is still in vogue in Pakistan. In the context of public interest litigation which is used in Pakistan to check the violation of human rights and to establish transparency in public transactions, the Supreme Court has commented on the inquisitorial system and how, in certain situations, the courts can resort to procedures laid therein.

The highest court of the country is the Supreme Court of Pakistan. Under the Constitution of Pakistan, 1973 (the “Constitution”), the Supreme Court mainly hears appeals against the decisions of the High Courts and in some matters it has the original jurisdiction.  The highest court of each province and the Islamabad Capital Territory (ICT) is the High Court.

Civil and commercial litigation in Pakistan is regulated mainly by the Code and the rules laid down by various High Courts, as well as the Supreme Court. Each High Court has the competence to make rules regulating its own procedure and the procedures of the District and Civil Courts that work under its supervision and control. A High Court can also modify or alter rules as contained in the First Schedule of the Code. Substantive deviations therefore exist among the procedures of different High Courts and the subordinate courts and the parties must be cognisant of these deviations. This article will outline practices and procedures that are common to all the High Courts in Pakistan at the time of writing.

The structure and organisation of local courts that deal with commercial claims varies in each province and the ICT. In the Punjab and the Balochistan provinces, there are dedicated Commercial Courts that exercise original civil jurisdiction at the level of Civil Courts to decide commercial disputes.

All court proceedings in Pakistan are public. Any written submissions filed in the court are public and anyone can obtain their copies. Recently, the Supreme Court has allowed live telecast of some of its cases.

The Code allows a litigant to appear in person and contest their case without legal representation. In case a person considers that proper legal representation is required, the Code states that any appearance, application or act in any court by a party may be made or done by their recognised agent or by a pleader appearing on their behalf.

To appoint a person as a pleader, the party is required to execute a document in writing signed by the party or by their recognised agent or by some other person duly authorised by or under a power of attorney (also called a wakalatnama) to make such appointment. In case a power of attorney is executed in a foreign country, it is required to be certified by the competent authority of the foreign country in accordance with the requirements of the Apostille Act, 2024.

To appear as a lawyer on behalf of a party in a court of law, a licence is required from a local Bar Council. In case a foreign lawyer has obtained such a licence, they can appear before a court in Pakistan. Without such licence a foreign lawyer cannot appear before a local court.

Financing a litigation means a third party, which has no interest in a litigation and is not a party to such litigation, paying for the legal costs of one of the parties upon an expectation to benefit from the victory of the party whose legal costs it has borne. The debate on this issue has mainly revolved around Section 23 of the Contract Act 1872 (the “Contract Act”), which states that the consideration or object of an agreement is unlawful if it is opposed to public policy. There is no law in Pakistan that directly deals with this issue; however, there is still some local case law on it.

The Lahore High Court in Muhammad Ramzan v Shamas-Ud-Din (2012 CLC 1541) held that every agreement to finance a litigation of a third party is per se not opposed to public policy. The Court held that in some instances agreements to finance a litigation in fact counter oppression and advance equity and justice, hence and such agreements would be valid. The Court reserved for itself the authority to “carefully scrutinise” all such agreements and, if they are unconscionable, unjust or inequitable, they may be declared against public policy, hence void. 

However, the Sindh High Court has taken a different view on this issue and held in Riaz Ahmed v Amtul Hameed Koser (1996 CLC 678) that agreements to finance litigation in consideration of sharing prospective spoils of litigation are against the public policy, hence void under Section 23 of the Contract Act.

Please refer to 2.1 Third-Party Litigation Funding.

Please refer to 2.1 Third-Party Litigation Funding.

Please refer to 2.1 Third-Party Litigation Funding.

Please refer to 2.1 Third-Party Litigation Funding.

Contingency fees are not allowed in Pakistan. Under Rule 149 of the Canons of Professional Conduct and Etiquettes, approved and adopted by the Pakistan Bar Council, an advocate cannot accept the whole or part of the property in respect of which they have been engaged to conduct the case in lieu of their remuneration or reward.

Please refer to 2.1 Third-Party Litigation Funding.

Under Pakistani law there are no prerequisites to filing a lawsuit, such as mediation. Under some statutes a notice of demand is necessary before filing a lawsuit. For instance, the Code requires that a two-month advance notice shall be delivered before a suit may be instituted against the government or a public officer in respect of any act carried out by them in their official capacity. Similarly, under the consumer protection laws, a notice of dispute to the other party is mandatory before filing a consumer claim. Furthermore, under the Companies Act 2017, a 30-day statutory notice of demand is mandatory before filing a claim of winding up by the creditor against a company which is unable to pay its debts.

The Limitation Act 1908 (the “Limitation Act”) prescribes the periods of limitation within which suits may be instituted in Pakistan. The rules relating to computation of time and regulating the course and manner for providing relief are contained in the main body of the Limitation Act; however, the specific limitation periods are contained in the First Schedule to the Limitation Act.

The limitation period for filing a suit for specific performance of a contract is three years from the date fixed for performance or, if no such date is fixed, when the plaintiff has notice that performance is refused. A suit for compensation for breach of contract may be filed within three years from the date of breach. Similarly, a suit for a relief on the ground of fraud may be filed within three years from the date when the fraud becomes known to the wronged party.

Under Section 9 of the Code the Civil Courts are granted general jurisdiction to try all suits of a civil nature unless their jurisdiction is implicitly or expressly barred.

Sections 15 to 20 of the Code deal with place of suing. These describe the pecuniary and territorial jurisdiction of the Civil Courts. Every suit shall be instituted in the court of lowest grade competent to try it. Suits relating to immovable property may generally be instituted in the court within the local limits of whose jurisdiction said property is situated. All other suits may be instituted where the defendant resides, carries on business or personally works for gain or in courts within whose jurisdiction the cause of action wholly or partly arises. 

The court must also possess pecuniary jurisdiction while passing a decree. Pecuniary jurisdiction of a court is fixed in accordance with the West Pakistan Civil Courts Ordinance, 1962 (the “Civil Courts Ordinance”). The High Courts are empowered to fix pecuniary jurisdiction of civil judges who preside over the Civil Courts under Section 9 of the Civil Courts Ordinance. 

As mentioned above, the Sindh High Court has original civil jurisdiction in all civil matters where the amount in dispute has a value exceeding PKR65 million. Suits that have a value below this threshold are filed in the ordinary Civil Courts.

The Financial Institutions (Recovery of Finances) Ordinances, 2001, lays down a summary expedited procedure for matters relating to bank loan defaults. A High Court has original jurisdiction in cases where the claim exceeds PKR100 million. Cases having values below the above threshold will be filed in special Banking Courts established under this law.

A lawsuit is initiated by filing a plaint in the prescribed form and verifying it on oath or on solemn affirmation. A plaint is a concise statement of facts that describes the cause or causes of action. A plaint should contain the following additional information:

• name of the court in which the suit is brought;
• name, description and place of residence of plaintiff/s;
• name, description and place of residence of defendant/s;
• the facts showing that the court has jurisdiction;
• the facts showing when the cause/s of action arose, and
• the relief/s which the plaintiff seeks.

Parties are allowed to amend their pleadings at any stage of the suit if the court is of the opinion that the amendment is just and proper and will go to the root of the controversy. Admissions made in pleadings cannot be retracted through an amendment. Similarly, an amendment would not be permitted where it would change the scope and complexion of the suit or where it would lead to the setting-up of a brand new case.

Where a suit is instituted, summons are issued and served on the defendant to appear and answer the claim of the plaintiff. The Code regulates the service of summons through various modes, including electronic modes. Summons are served on the defendant by order of the court through a court’s officials at the expense of the plaintiff. Service of summons is to be accompanied by a copy of the plaint. A court can order personal appearance of the parties; however, no party can be ordered to appear in person if they do not reside within the local limits of such court. 

Summons on a defendant not residing within the territorial jurisdiction of the court may be served by such court by sending them either through its officers or by post to another court having jurisdiction in the place where the defendant resides. The court receiving the summons shall, after serving them on the defendant, return them to the court issuing them, together with the record of its proceedings thereto. 

Where the defendant resides outside Pakistan and has no agent in Pakistan to accept service, the summons shall generally be addressed to the defendant at the place where they are residing and sent to them by post, if there is a postal communication between such place and the place where the court is situated.

If, after the summons has been validly served, the defendant still fails to appear, the court may proceed ex parte and pass the judgment and decree without recording evidence. In practice, however, a court would dispose of the suit on merits after recording the plaintiff’s evidence even where the defendant fails to appear despite notice.

Pakistani law permits representative or class actions. The Code permits joinder of plaintiffs and permits all persons to join in one suit as plaintiffs in whom vests any right to a relief in respect of or arising out of the same act or transaction or series of transactions. This rule enables different plaintiffs to join in one suit where the right to relief alleged to exist in each of them arises out of the same transaction and there is a common question of law or fact to be decided. Moreover, persons may be joined subsequent to the institution of a suit.

Furthermore, where there are numerous persons having the same interest, one or more of such persons may, with the permission of the court, institute a lawsuit on behalf of or for the benefit of all persons so interested. However, before granting the permission, the court is required to give, at the plaintiff’s expense, notice of the institution of the lawsuit to all such persons either by personal service or, where personal service is not practicable, by public advertisement. A person on whose behalf or for whose benefit a lawsuit is instituted may apply to the court to become a party to such suit.

Similarly, under Articles 199 and 184(3) of the Constitution, a pro bono publico can directly approach a High Court or the Supreme Court of Pakistan in a matter that involves public interest or is a matter relating to enforcement of fundamental rights.

There is no requirement in Pakistan of the provision of a cost estimate by the counsel to their client at the outset of a litigation.

In 2017, the Federal Government passed the Costs of Litigation Act, 2017, which amended the Code only to the extent of the ICT. This amendment in the Code requires the parties to file details of their actual costs of litigation, including but not limited to the court fee, stamp fee, fee paid to counsel and all other ancillary or incidental expenses thereto. Apart from Islamabad, no province in Pakistan has passed a similar legislation or requires any such filing of cost estimate.

Under the Code, the parties to a suit can apply for different types of interim remedies, which include:

• injunction to restrain the repetition or continuation of a breach;
• interim sale;
• detention, preservation or inspection of subject matter of suit;
• deposit of money in court; and
• application for rejection of plaint (by the defendant).

The Code also provides the option of supplementary proceedings to meet the ends of justice, in which the court may:

• issue a warrant to arrest the defendant and bring them before the court to show cause why they should not give security for their appearance, and if they fail to comply with any order for security commit them to the civil prison; 
• direct the defendant to furnish security to produce any property belonging to them and to place the same at the disposal of the court or order the attachment of any property; 
• grant a temporary injunction and in case of disobedience commit the person guilty thereof to the civil prison and order that their property be attached and sold; 
• appoint a receiver of any property and enforce the performance of their duties by attaching and selling their property; and
• make such other interlocutory orders as may appear to the court to be just and convenient.

In practice, the remedies described above under supplementary proceedings are rarely granted by a court.

The Code provides the defendant with an opportunity of bringing to an end a litigation by requesting the court to reject the plaint on any of the following grounds: 

• the plaint does not reveal a cause of action;
• the relief claimed is undervalued, and the plaintiff on being required by the court to correct the valuation fails to do so; or
• the suit appears from the statement in the plaint to be barred by any law. 

The court also has power to suo motu reject a plaint on the above grounds without waiting for an application from the defendant.

Where an admission of fact is made by a party either in their pleadings or otherwise (discussed below) in favour of another party, such other party may apply to the court for a judgment or order in their favour upon such admission, without waiting for determination of any other question between the parties. The court may pronounce a judgment on such admission or make such other order as it may deem just and proper.

The Code empowers the court to strike out the name of any party which has been improperly joined in the suit.  This power may be exercised by the court either on its own motion or upon an application of any party.

Courts are empowered to add parties to a suit either on their own motion or on application of an interested party.  Parties can be added at any stage of the proceedings where their presence is necessary to enable the court to effectively and completely adjudicate upon and settle the questions involved in the suit. The object of this principle is to avoid multiplicity of litigation and to ensure that all the necessary and proper parties are before the court for proper adjudication of the dispute. When a new defendant is added the plaint is amended unless the court decides otherwise. Summons and amended copies of plaint are served on the new defendant and, if the court so decides, on the original defendants as well.

A defendant can apply for security of all incurred and likely to be incurred costs if the plaintiff or all the plaintiffs reside outside Pakistan or leave Pakistan pending litigation with reasonable probability of not returning and do not possess sufficient property in Pakistan. The court can demand security for costs at its own motion as well.

The costs of all suits and costs incident to the suit are at the discretion of the courts and the courts have complete power to determine to what extent costs are to be paid. Courts, however, rarely allow costs to the winning party.

Application for injunction to restrain repetition or continuance of breach can be made at any time after the commencement of the suit and either before or after judgment.

A plaintiff can apply for interim sale or detention, preservation, inspection, etc, of the subject matter after notice to the defendant at any time after institution of the suit. The defendant can apply for these interim orders after notice to the plaintiff at any time after appearance.

The Code empowers the court to make necessary orders in matters relating to delivery and answering of interrogatories, the admission of documents and facts, and the discovery, inspection, production, impounding and return of documents and other material objects. 

A party may, with the leave of the court, deliver written interrogatories in a prescribed form to be responded to by the other party. Such interrogatories should relate to factual matters involved in the suit. Ordinarily, more than one set of interrogatories may not be delivered to the same party. The party being interrogated may object to any interrogatory on the ground that it is scandalous, irrelevant or not delivered with a bona fide intention. The court will grant leave only in respect of such interrogatories as are necessary for saving costs or for fairly disposing of the suit. 

The Code requires interrogatories to be answered through a sworn affidavit. Where the party being interrogated omits to answer, or answers insufficiently, upon the request of the other party, the court may make an order requiring such party to answer either by sworn affidavit or by viva voce examination. A party may use the other party’s answers to interrogatories in evidence at the trial.

A party may also apply to the court for an order directing the other party to grant access to documents which relate to any matter in question in the suit and are in such party’s possession or power. 

The Code entitles a party to request, in the form of written notice, that the other party produces any documents referred to in the other party’s pleadings or affidavits for inspection and for taking copies. A party not complying with such notice may not put the requested documents in evidence unless they satisfy the court that there was sufficient cause for not complying with the notice. 

Where a party fails to comply with the court’s order to answer interrogatories or for discovery or inspection of documents, the court may make an order for dismissal of the suit for want of prosecution if the defaulting party is a plaintiff in the suit. If the defaulting party is a defendant in the suit, the court may make an order striking out their defence and placing them in a position as if they had not defended the suit. 

A party may, through a written notice, call upon the other party to admit any document mentioned in the notice.  Similarly, a party may, through a written notice, call upon the other party to admit, for the purposes of the suit only, any specific facts mentioned in the notice.

The Code only allows the court to issue summons for discovery of documents in possession of a party to the suit. It does not contain any provision for discovery from third parties. 

If an order for discovery is made against a party, such party is required to file an affidavit stating which of those documents they possess or have in power and any objection in producing any of the documents. The test here is of possession or power. If a party possesses or is in power of any document, then such document has to be disclosed and the fact that it is in any other jurisdiction becomes immaterial.

An alternative to discovery is inspection. A party can deliver interrogatories to the other party with the permission of the court. Please refer to 5.1 Discovery and Civil Cases where this issue is discussed in more detail.

The Qanun-e-Shahadat Order 1984 (QSO) prohibits advocates from disclosing communication made to them for the purpose of their employment as advocates, by their client or to state the contents or condition of any document with which they have become acquainted in the course of their professional employment or to disclose any advice given by them to their client. The obligation to keep all such information confidential continues even after termination or expiry of such employment. No person may be compelled to disclose to the court, tribunal or any other authority exercising judicial or quasi-judicial power or jurisdiction any confidential communication which has taken place between them and their legal adviser.

In Pakistan, the law appears to extend legal privilege to external as well as in-house counsel. However, such external or in-house counsel should be enrolled with a Bar Council established under the Legal Practitioner and Bar Councils Act 1973.

A court may refuse an application for discovery if it finds that such discovery is not necessary.

Discovery application can also be refused if the court is of the opinion that it is not necessary either for disposing fairly of the suit or for saving costs.

A court usually grants temporary injunction where:

• any property in dispute in a suit is in danger of being wasted, damaged on alienated by any party to the suit or wrongfully sold in execution of a decree; or
• the defendant threatens or intends to remove or dispose of their property with a view to defraud their creditors.

In these circumstances, the court may by order grant a temporary injunction to restrain such acts or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property, until the disposal of the suit or further orders.

Courts in Pakistan have the authority to grant non-monetary relief:

• by taking possession of certain property and delivering it to a claimant;
• by ordering a party to do the very act which it is under an obligation to do – eg, grant a decree for specific performance of contracts or for mandatory injunction;
• by preventing a party from doing that which it is under an obligation not to do – eg, grant a decree for preventive relief by way of injunction, temporary or perpetual;
• by determining and declaring the rights of parties otherwise than by an award of compensation; or
• by appointing a receiver.

The circumstances in which any of the above reliefs may be granted by a court depend upon the nature of the relief claimed. The grant of any of the above reliefs is at the court’s discretion.

A court may grant a decree for specific performance of contract when there is no standard for ascertaining the actual damage caused by non-performance or where pecuniary compensation for non-performance would not afford adequate relief or when it is probable that pecuniary compensation for non-performance cannot be obtained. Specific performance may not be claimed in respect of certain contracts, such as a contract for personal services or a contract which involves performance of a continuous duty extending over a longer period than three years. 

A perpetual injunction may be granted by the court to prevent the breach of an obligation existing in favour of a person. A perpetual injunction may be granted where there is no standard for ascertaining the actual damage caused or likely to be caused by the invasion or where pecuniary compensation would not afford adequate relief or where pecuniary compensation cannot be obtained for the invasion or where injunction is necessary to prevent multiplicity of judicial proceedings. Where it is necessary to compel performance of certain acts in order to prevent the breach of an obligation, the court may compel performance of requisite acts by issuing a mandatory injunction.

An injunction cannot be granted, inter alia, to stay legal proceedings in a higher court or in a criminal matter, to interfere with public duties of a government department or with sovereign acts of a foreign government, to prevent breach of a contract which is not specifically enforceable.

A court may grant a temporary injunction only in the proceedings pending before it if the court is satisfied that: (i) the applicant has a prima facie good case; (ii) the balance of convenience lies in favour of the grant of injunction; and (iii) the applicant would suffer irreparable loss if the injunction is refused. Temporary injunctions are generally granted without hearing the other party.

Out-of-hours judges are available in civil matters.

A court can allow an interim injunction in the absence of the defendant. However, such an injunction cannot exceed 15 days. Such injunction is extendable. The court has to give a notice of the application for the injunction to the opposite party before granting an injunction. However, in practice, injunctions are almost always given in the absence of the other party and they usually last for the whole period of the litigation.

Under Section 95 of the Code, if a party obtains arrest, attachment or interim injunction against the other party and later it appears to the court that the interim relief was granted on insufficient grounds or that there was no reasonable or probable ground for instituting the suit, the defendant can apply for a reasonable compensation not exceeding PKR10,000.

In Punjab, there is no limit on the amount of compensation and it is at the discretion of the court to award a reasonable compensation. Moreover, the court can also demand the party at fault to deposit such amount in the public exchequer as the court thinks fit as a fine for abuse of process and for wasting the court’s time. Once again, this remedy is merely theoretical as in actual practice it is seldom awarded.

There are no laws in Pakistan that allow or disallow an injunctive relief against the foreign assets of a respondent.

An injunction can only be granted against a party to a lawsuit and not against any third party. If there are chances of breach or injury by a third party, the plaintiff can add that party as a defendant in the suit and then can claim injunctive relief against them.

If a party breaches any term of an injunction, the court can order the attachment of property of such person and/or detention of such person for a term not exceeding six months, unless in the meantime the court directs their release.

The attachment of property under the above-stated rule will remain in force for a maximum period of one year, and if the breach continues, the court can order the sale of property and pay compensation to the applicant from the sale proceeds and the remaining amount, if any, to the respondent.

Moreover, separate criminal proceedings can be initiated against the party not complying with the order of the court under the Contempt of Court Act 2012, which carries a punishment of simple imprisonment for a period up to six months or fine up to PKR100,000, or both.

In Pakistan, the Trial Courts have original jurisdiction in all civil matters. The Trial Courts are generally the Civil Courts established under the Civil Court Ordinance. In addition, there also exist other courts and tribunals created under special laws and enactments. Their jurisdiction, powers and functions are specified in those statutes. The first stage in a civil litigation is the filing of a plaint by the plaintiff. Thereafter, the court orders the service of the summons on the defendant. The defendant thereafter ordinarily has 30 days to file their written statement; however, in practice this deadline is hardly ever met. After the defendant has filed their written statement the court will proceed to frame issues. The next stage in a civil trial is that of the production of evidence. Evidence in Pakistan is generally recorded by the judge in their own handwriting. The court can also adopt any lawful procedure not inconsistent with the provisions of the Code, with consent of the parties, to issue commission to examine witnesses, admit documents and take other steps for the purpose of trial. Evidence in Pakistan has three stages: examination in chief, cross-examination and re-examination of the witness. This stage is followed by final arguments after which the judge gives his judgment. The last and the final stage is that of execution.

The Code has not laid down any specific requirements for case management hearings. In 2018, the Lahore High Court introduced a Case Management Questionnaire that was to be completed by the plaintiff and the defendant. The court proceedings mainly constitute oral submissions of the counsel. It is very common for parties to seek adjournments and such requests are almost always allowed by the courts. Separate case management hearings are not held. Parties hardly ever stick to the hearing dates decided with the judge.

Jury trials are not conducted in Pakistan.

Under the QSO, all facts except the contents of a document may be proved by oral evidence. Oral evidence is confined to words spoken by mouth. Oral evidence must be direct. QSO embodies the general principle that the contents of a document can only be proved by primary or secondary evidence. Primary evidence means the document itself produced for the inspection of the court.

Pakistani law permits expert testimony in judicial proceedings. The opinion of an expert becomes relevant when the court has to form an opinion on a point of foreign law, science, arts, identification of handwriting or finger impressions. The court forms its opinion with the help of the expert. Expert opinion is relevant and admissible merely to aid the court in forming its opinion. The court can come to its own conclusion independently of an expert’s opinion. Expert evidence can be produced by the party after seeking permission of the court.

All court filings and proceedings are open to the public. In extremely rare cases mainly involving national security, the court will allow filings or proceedings not to be made public.

A judge in Pakistan can intervene in a proceeding and put questions to the parties. Since Pakistan follows an adversarial system, the intervention of judges is limited. The judges of the superior courts tend to intervene more than judges of the lower courts. In complex cases, it is quite common for the judges to reserve the judgments after the conclusion of the trial.

Civil litigation in Pakistan is infamous for perennial delays. A regular civil suit usually takes up to five years (frequently more) from start to finish. Almost all cases go into appeal with most cases going to the Supreme Court. The appeal process can easily take three to six years. Often, in appeal, the cases are remanded to the trial courts for retrial or to decide a particular point afresh.

If the court is satisfied that a suit has been adjusted wholly or in part by any lawful agreement or compromise, the court orders such agreement or compromise to be recorded and then passes a decree accordingly. The court, when satisfied that a lawful compromise has been effected by the parties, is bound to record the same in terms of compromise. However, it is pertinent to mention that all the parties must agree to the adjustment before the court may give its consent.

There appears to be no provision in the Pakistani law that may allow a settlement to remain confidential.

A settlement agreement is treated as an agreement between the parties. In case one of the party refuses to follow its terms or breaches it, a new cause of action arises on the basis of breach of the agreement and the aggrieved party can institute a suit for the breach.

The Code explicitly states that a decree passed by the court with the consent of the parties cannot be appealed.

There are different types of remedies/awards available to a person in a civil claim depending upon the nature of the suit and the relief claimed. The law of Pakistan generally recognises the following remedies:

• compensation or damages;
• recovery of specific immoveable property;
• recovery of specific moveable property;
• specific performance of contract; and
• permanent injunction.

Compensation will not be given for any remote or indirect loss or damage sustained by reason of breach of contract. Compensation is only payable for the actual loss or damage caused.

The Code confers a general discretion on the court to allow interest where it considers that doing so is just and proper in the circumstances of the case. A court has the authority to allow interest for the period prior to the institution of the suit till the realisation of the amount decreed.

A decree-holder has to apply to the court for execution, however, for courts functioning in the Punjab Province, the court automatically converts the enforcement application into execution proceedings without the need for the applicant to file any additional pleadings.

In case of a money decree, the decree-holder can apply for the execution of the decree by the arrest of the judgment-debtor, prior to the preparation of a warrant, if they are within the precincts of the court.

A decree-holder can apply for the attachment of moveable and immoveable properties of the judgment debtor.

In case the judgment debtor has any objection to the execution of a money decree, they may object to it under Rule 23-A(a) but on the condition that they either deposit the decretal amount in the court or furnish a security for its payment.

In the context of the enforcement of foreign judgments, Pakistani law only allows the enforcement of judgments issued by particular courts of certain specified countries. Once a foreign judgment has passed this test, the local court would then analyse whether or not the foreign judgment is, inter alia, violative of any principles of Pakistani law. 

In the ICT, the Sindh and the KPK, the Code allows enforcement of decrees passed by courts in the United Kingdom and other reciprocating territories. Where a certified copy of a decree of any of the superior courts of the United Kingdom or any reciprocating territory is filed in a District Court in Pakistan, the decree may be executed in Pakistan as if it was passed by the District Court. Reciprocating territory includes the United Kingdom and other countries or territories that the Federal Government may announce from time to time by notification in the Official Gazette. Superior courts with reference to any such territory means such courts as may be specified in the said notification.

The Code has been amended to the extent of Punjab and Balochistan and reference to the superior courts of the United Kingdom was excluded. Apart from this amendment, judgments from reciprocating states are still enforceable in Punjab and Balochistan, in the same manner as stated above.

With regard to the judgments from non-reciprocating states, a new suit can be instituted on the basis of the foreign judgment treating it as a cause of action, even though the judgment is not from one of the reciprocating territories.

For all the cases instituted in a Civil Court, the first appeal lies either before the District Court, or the High Court, depending upon the value of the suit. Against the order of a District Court a second appeal may be filed before the High Court, and from the order of the High Court an appeal may be filed before the Supreme Court, which is the last appellate authority. Where a dispute is instituted directly before the High Court, the first order may be appealed before a two-member bench of the same High Court, through an intra-court appeal, and the order passed in appeal can then be appealed before the Supreme Court. It is pertinent to mention here that to file a second appeal, the value of the suit must exceed the minimum value determined by each provincial government. 

An aggrieved party can apply for a review of a decree or order if such order or decree is appealable under the Code but no appeal has been preferred. A review of a decree or an order is also available in case of decrees or orders for which the Code does not provide a right to appeal.

The Code provides a right to appeal against a decree passed by a Trial Court exercising original jurisdiction. Such an appeal may be filed by any party affected by such decree. The appeal memorandum should set out the grounds of objections to the decree. The Appellate Court’s authority is not confined to the grounds of objections set out in the memorandum. 

The limitation period for filing an appeal varies, depending upon: (i) the court to whom the appeal is made; (ii) the court against whose decision the appeal is made; and (iii) the nature of the decision being challenged. The limitation period generally ranges between 20 days to 90 days from the date of the passing of the decision being challenged.

An appeal has to be in the form of a memorandum, signed by the appellant or his pleader. The memorandum should contain grounds of objection in consecutive numbering. A certified copy of the judgment which is appealed has to be attached with the appeal. If memorandum of appeal is not in proper form, the court may reject it or allow the appellant to amend it.

An appeal against a decree passed by a court subordinate to a High Court may be filed in such High Court on any of the following grounds:

• the decision being contrary to law or usage having the force of law;
• the decision having failed to determine some material issue of law or usage having the force of law; or
• a substantial error or defect in the procedure provided by the Code or by any other law in force at the time, which may possibly have produced an error or defect in the decision of the case upon the merits.

Similarly, an appeal against the judgment, decree or final order of a High Court may lie to the Supreme Court if:

• the amount or value of the subject matter is PKR50,000 or above and the judgment, decree or final order appealed from has varied or set aside the judgment, decree or final order of the court immediately below; or
• the High Court certifies that the case involves a substantial question of law as to the interpretation of the Constitution.

There are no laws in Pakistan that list down any conditions that an Appellate Court may impose for the grant of an appeal.

An Appellate Court has the same powers and can perform almost the same duties as are available to the court of original jurisdiction under the Code.

The Code provides that the award of costs shall be at the discretion of the court, and the court shall have full power to determine by whom or out of which property and to what extent such costs are to be paid.

Furthermore, the court has the power to award either actual costs as provided under Section 35 of the Code or compensatory costs under Section 35 A of the Code.

In practice, costs are very rarely allowed by the courts in Pakistan.

It is in the discretion of the court to determine which one of the parties to the litigation will bear the costs of the litigation and how much of the costs actually incurred are to be allowed.

A court, in its discretion, can allow interest on cost at any rate not exceeding 6% per annum. The interest is added to the costs and is recoverable as such.

Alternate dispute resolution (ADR) is not a popular mode of dispute resolution in Pakistan. Certain amendments were made in the Code to empower the courts to refer the parties with mutual consent to settlement through ADR.  Certain bodies have been organised under the auspices of High Courts to administer ADR (mainly mediation).  However, recourse to these procedures is generally made where the disputes are of a minor nature. In commercial disputes, the parties prefer to resolve them through regular court proceedings. In international transactions, the parties generally provide for international arbitration at a neutral venue as a mode for the settlement of disputes.  ADR has recently been introduced as an option for the settlement of tax-related disputes between taxation authorities and tax payers.

The ICT and all the provinces, except Sindh, have enacted separate legislation to introduce ADR within their legal systems. These pieces of legislation are quite identical with some minor differences. The Province of Sindh, rather than enacting a separate legislation, has amended the Code to incorporate ADR in its legal system.

The Ministry of Law and Justice (MOJ) accredits ADR Centres and Mediators (for Islamabad only) under the Alternative Dispute Resolution Act 2017. Currently, the Indus Mediation and Dispute Resolution Center (IMDRC) and the Musaliha International Centre for Arbitration and Dispute Resolution (MICADR) have been accredited by the MOJ. For mediation, the MOJ has recently accredited 29 mediators.

For other provinces, the Supreme Court of Pakistan with the MOJ and provincial High Courts has created centres for arbitration all over Pakistan to reduce the burden of pending cases in the courts at all levels of judicial hierarchy and for expeditious dispensation of justice.

Apart from these, there are other institutions that are providing ADR services such as the Chartered Institute of Arbitrators, the Centre for International Investment and Commercial Arbitration, the International Arbitration Centre Pakistan, etc.

Pakistani law differentiates between domestic arbitration and arbitration conducted outside Pakistan and the resulting awards therefrom; each is governed and enforced under a separate law.

Domestic Arbitration and Domestic Arbitral Awards

The Arbitration Act, 1940 (the “Arbitration Act”) governs and regulates arbitration proceedings conducted in Pakistan and the enforcement of domestic arbitral awards.

Where a party to an arbitration agreement governed by the Arbitration Act commences legal proceedings against another party to such arbitration agreement in respect of any matter agreed to be referred to arbitration, the Arbitration Act entitles such other party to apply, at any time before filing a written statement or taking any other steps in such legal proceedings, to the judicial authority before which the proceedings are pending to stay the legal proceedings. 

More recently, to modernise Pakistan’s legal framework for arbitration, the Law and Justice Commission of Pakistan (LJCP) presented the draft Arbitration Act 2024 Bill to the Federal Minister for Law and Justice to place before the Parliament with a view to promote efficiency and fairness in resolving commercial and business disputes. The draft Arbitration Act 2024 Bill is expected to be in line with the international best practices.

Arbitration Conducted Outside Pakistan and Foreign Arbitral Awards

New York Convention arbitral awards

Pakistan is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”). Pakistan signed the New York Convention on 30 December 1958 and ratified it much later on 14 July 2005. On 15 July 2011, a permanent legislation was enacted by the parliament of Pakistan in order to implement the New York Convention in Pakistan: the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act 2011 (the “NYC Act”).

The NYC Act applies to arbitration agreements made at any time, and to foreign arbitral awards made on or after 14 July 2005. It obliges a local court seized of a matter covered under an international arbitration agreement to stay the judicial proceedings pending before it upon an application by a party to such an agreement and to direct the parties to refer the matter to arbitration. 

ICSID arbitral awards

Pakistan is also a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965 (the “Washington Convention”). Pakistan signed the Washington Convention on 6 July 1965 and ratified it on 15 September 1966. On 28 April 2011, a permanent legislation to implement the Washington Convention in Pakistan: the Arbitration (International Investment Disputes) Act 2011 (the “AIID Act”) was enacted by the Parliament of Pakistan.

The AIID Act bars local courts from applying the provisions of the Arbitration Act to proceedings initiated pursuant to the Washington Convention. 

The AIID Act empowers the federal government to lay down the procedure for the registration of arbitral awards issued pursuant to the Washington Convention by making rules. The federal government is also empowered under the law to prescribe, by rules, the matters to be proved at the time of the filing of application for registration of such arbitral awards and the manner of proof of these matters. So far, no rules have been issued by the federal government in this regard.

The local legislation enacted for the implementation of the New York Convention in Pakistan does not set any standard for assessing the arbitrability of disputes. The domestic arbitration law does not set a standard for assessing the arbitrability of disputes either.

However, the Pakistani courts have laid down certain principles for assessing the arbitrability of disputes. The arbitration agreements which tend to encompass disputes which are not arbitrable are held to be against public policy. It is yet to be decided whether or not these principles would also apply to matters covered by the New York Convention as it is generally understood that the notion of public policy has a restricted meaning when it comes to matters covered by the New York Convention.

Within the context of domestic arbitration law, a dispute which involves adjudication on allegations of criminality, fraud or corruption may not be referred to arbitration. Likewise, where a special statute grants a court or a tribunal an exclusive jurisdiction in relation to that matter, such matter cannot be referred to arbitration.  One example is the winding up of companies.

In matters of domestic arbitration, the award given by an arbitrator is final and cannot be appealed on a point of law. However, appeals are permissible where there has been a procedural irregularity. The arbitrator is required, at the request of either party or if so directed by the court, to file the award together with the arbitration record in the court. 

In case of foreign arbitral award, the court is entitled to refuse recognition and enforcement of a foreign arbitral award only on certain grounds stated in Section 7 of the NYC Act which are the same as those laid down in Article 5 of the New York Convention. 

Enforcement of Foreign Arbitral Award

Section 6 of the NYC Act obliges a local High Court, upon an application by a party in whose favour a foreign arbitral award is issued, to recognise and enforce the foreign arbitral award in the same manner as a judgment or an order of a court in Pakistan. A foreign arbitral award that is enforceable under the NYC Act is treated as binding for all purposes on persons between whom it was made. After a foreign arbitral award is recognised by the court it may be executed in the manner laid down in the Code.

Section 3 of the AIID Act entitles a person seeking recognition or enforcement of an arbitral award issued by the International Centre for Settlement of Investment Disputes (ICSID) to have the arbitral award registered in a local High Court subject to proof of any matters that may be prescribed and to other provisions of the AIID Act.

An arbitral award registered under Section 3 of the AIID Act is treated, with regard to the pecuniary obligations it imposes, as a judgment of a local High Court and is to be executed by the High Court in the manner laid down for execution of its judgments. However, enforcement of an award against the government may be refused by the court on the same grounds on which a court judgment may not be enforceable against the government.

In April 2023, the then Chief Justice of Pakistan, in his capacity as the Chairman of the Law and Justice Commission of Pakistan, constituted an Arbitration Law Committee which consisted of a senior judge of the Supreme Court of Pakistan, two practising lawyers and representatives of the Board of Investment, Ministry of Law and Justice and Law and Justice Commission of Pakistan. This committee was mandated to analyse the existing legislation on arbitration in Pakistan and to recommend suitable measures, including a holistic legislation on arbitration aligned with international best practices including the United Nations Commission on International Trade Law. This committee has prepared a draft arbitration law based on the UNCITRAL Model Law.

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