An Arbitral Award rendered in Lahore cannot be considered a Foreign Arbitral Award, even if governed by LCIA Rules, 2014 --- Lahore High Court, Lahore

Islamabad 27-02-2025: The Lahore High Court (LHC) has delivered a significant ruling in [W.P. No. 23999/2024] (Blitz Advertising (Pvt.) Ltd. Vs. Civil Judge Lahore & Another), clarifying the criteria for distinguishing domestic and foreign arbitral awards under Pakistan’s arbitration laws. The Court upheld the jurisdiction of the Civil Court in enforcing an arbitration award, rejecting the Petitioner’s contention that the award should be treated as a foreign arbitral award under the Recognition and Enforcement (Arbitral Agreement & Foreign Arbitral Award) Act, 2011.

The Court ruled that the arbitration award rendered in Lahore does not fall under the category of a foreign arbitral award, despite being conducted under the London Chamber of International Arbitration (LCIA) Rules, 2014. The decisive factor was that the seat of arbitration was Lahore, making it subject to Pakistan’s domestic arbitration laws.

The Lahore High Court emphasized that the mere application of LCIA rules or the appointment of an arbitrator by a foreign arbitral institution does not change the nature of the award. Since both parties involved were Pakistani entities, and the award was made in Pakistan, it was not enforceable under the 2011 Act, but rather under local arbitration laws.

The ruling referenced previous case law, including:

1. SpaceCom International, LLC Vs. Wateen Telecom Limited [C.O No. 25854 of 2023]  
2. Supreme Court’s Decision in [Civil Appeal No. 722 of 2012] (22.02.2024)  
3. M/s Tradhol International SA Sociedad Unipersonal Vs. Messrs Shakarganj Limited (PLD 2023 Lahore 621) (Distinguished)

The Court dismissed the Petitioner’s reliance on Tradhol International, stating that the facts of the present case did not align with that precedent.

After analyzing the legal provisions and case law, Mr. Justice Shahid Karim dismissed the petition, ruling that the Civil Court had jurisdiction to enforce the arbitral award. The decision reaffirms that an award rendered in Pakistan cannot be treated as a foreign arbitral award, even if foreign rules were applied in the proceedings.

This ruling strengthens Pakistan’s arbitration framework, emphasizing that:

1. The seat of arbitration is the determining factor in classifying an arbitral award.
2. Foreign arbitration rules alone do not make an award foreign.

Domestic Courts retain jurisdiction over arbitration awards rendered in Pakistan.

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