Islamabad High Court, Islamabad has Exclusive Jurisdiction over Foreign Arbitral Awards under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011
Islamabad 31-10-2024: In a significant ruling, the Islamabad High Court (IHC) recently reinforced the enforceability of foreign arbitration agreements under Pakistani law, granting exclusive jurisdiction to Islamabad High Court (IHC) over foreign arbitral awards. The judgment in the case between Zaver Petroleum Corporation (Pvt.) Limited and Saif Energy Limited marks a pivotal moment for Pakistan’s stance on international arbitration, party autonomy, and the applicability of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011.
The Court’s decision addresses Zaver Petroleum’s petition to enforce arbitration awards issued by the London Court of International Arbitration (LCIA) and prevent Saif Energy from pursuing contradictory legal action in Pakistan. The judgment details several legal principles impacting international commercial arbitration in Pakistan.
The Islamabad High Court (IHC) underscored its exclusive jurisdiction in matters involving foreign arbitration awards, effectively overriding the Civil Court in Kohat. This decision aligns with Section 3 of the 2011 Act and emphasizes the Islamabad High Court’s (IHC) primary role in enforcing foreign awards.
The Court recognized that parties, including domestic entities, can autonomously choose foreign seats for arbitration without conflicting with Pakistani law, provided the agreements do not contravene public policy. This ruling aligns with international arbitration standards, promoting Pakistan as a compliant jurisdiction under the New York Convention.
The Court issued an anti-suit injunction against Saif Energy, barring it from pursuing parallel legal action in Pakistan that would undermine the foreign arbitration. This move reaffirms the enforceability of foreign arbitral awards and the obligation to honor arbitration clauses.
The Court addressed authentication concerns under the New York Convention, allowing some flexibility in enforcing awards where authenticity is undisputed. This decision shows a willingness to facilitate enforcement of foreign awards, enhancing procedural efficiency for international arbitration cases.
The Court’s judgment draws on notable precedents, including Orient Power Company (Private) Limited Vs. Sui Northern Gas Pipelines Limited and M.A. Chowdhury Vs. Messrs Mitsui OSK Lines Ltd., to emphasize the validity of foreign jurisdiction clauses in contracts and the Islamabad High Court’s (IHC) exclusive enforcement role. Additionally, by referencing Atlas Export Industries Vs. Kotak & Company, the Court upheld that domestic parties may enter foreign arbitration agreements and seek enforcement without conflict under Pakistani law.
This ruling is expected to strengthen confidence in Pakistan’s adherence to international arbitration conventions and its ability to facilitate global commercial agreements. Legal experts anticipate this decision will bolster Pakistan’s appeal as a venue for arbitration and may encourage domestic companies to embrace international arbitration for resolving complex disputes.
The Islamabad High Court’s (IHC) judgment signals a strong commitment to upholding international arbitration norms, enhancing Pakistan’s reputation as a jurisdiction supportive of foreign arbitral awards.
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