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Appropriate Legality in Action: Pakistan’s Draft Arbitration Act, 2024
Appropriate Legality in Action: Pakistan’s Draft Arbitration Act, 2024
Scope of the Draft Act:
One significant divergence between Pakistan’s Draft Arbitration Act and the UNCITRAL Model Law lies in their respective scopes. While the Model Law applies to both foreign-seated and domestically-seated international arbitrations, the Draft Act does not cover foreign-seated arbitrations. This is due to Pakistan’s existing 2011 law governing the enforcement of foreign arbitral awards, which has been judicially interpreted in a pro-enforcement manner. Amending this existing framework would disrupt hard-earned judicial precedents, making separate amendments a more practical solution.
Practicality and Bright Line Rules:
A hallmark of Pakistan’s Draft Act is its preference for bright-line rules over discretionary standards, particularly in defining “international commercial arbitration.” Pakistan's courts are already burdened with delays, and discretionary debates during the interim stages of arbitration could further exacerbate these delays. The Draft Act mitigates this by allowing parties to designate their arbitration as "international," subject to a pecuniary minimum, thus balancing practicality with fairness.
Limiting Judicial Interference:
The Draft Act also limits judicial interference by disallowing appeals if an arbitrator rejects a challenge to their appointment, ensuring that parties cannot use judicial processes to delay proceedings. This emphasis on minimizing judicial intervention is vital in a country where courts are often inundated with litigation.
Arbitration and Real Property Disputes:
An important innovation of the Draft Act is its express grant of powers to arbitral tribunals to order specific performance, including in real property disputes, an area that comprises approximately 60% of Pakistan’s civil litigation. By addressing this sector, the Draft Act positions arbitration as a potential game-changer for expediting property dispute resolutions in Pakistan.
Gradual Reform through Appropriate Legality:
The Draft Act’s pragmatic stance extends to its treatment of domestic and international arbitration awards. It allows courts to set aside domestic awards for errors on the face of the record, reflecting the realities of unequal bargaining power within Pakistan’s domestic legal framework. This cautious approach enables gradual reform, ensuring that more stringent standards for international awards become the norm before being extended to domestic cases.
Conclusion:
Pakistan’s Draft Arbitration Act exemplifies the concept of “appropriate legality,” emphasizing practical solutions over rigid adherence to international best practices. By adapting the law to the realities of Pakistan’s legal landscape, the Draft Act ensures that arbitration remains an effective and relevant tool for resolving disputes while avoiding pitfalls that could hinder its progress.
- Amending this existing framework would disrupt hard-earned judicial precedents, making separate amendments a more practical solution.
- akistan's courts are already burdened with delays, and discretionary debates during the interim stages of arbitration could further exacerbate these delays.
- This emphasis on minimizing judicial intervention is vital in a country where courts are often inundated with litigation.
