Arbitration Agreements with Pakistani Parties: A Deeper Look into the Legal Regime 

Abstract

This article provides an in‐depth examination of Pakistan’s arbitration framework, delineating its historical foundations and contemporary applications in international dispute resolution. It begins by outlining the dual legal regime formed by the pre‐partition Arbitration Act, 1940 and the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011. Although not directly modeled on the UNCITRAL Model Law, the evolving jurisprudence of Pakistan’s superior courts has progressively bridged the gap between traditional statutes and modern commercial practices. The article further explores the arbitrability of disputes, emphasizing the broad scope of issues—including state contracts and insolvency matters—while noting limitations in areas such as fraud and corruption. Detailed guidance is provided on drafting arbitration agreements with Pakistani parties, covering aspects such as the required written form, choice of language, and selection of arbitrators. Various modes of initiating arbitration are discussed, ranging from court-independent procedures to those involving judicial intervention and alternative dispute resolution (ADR). Additionally, the article examines the powers and requirements of arbitral awards, the mechanisms for challenging awards or arbitration agreements, and the recognition and enforcement of both domestic and foreign awards under Pakistan’s legal system. The establishment and evolving role of Pakistan’s international arbitration centre, CIICA, is also highlighted. Concluding with an outlook on potential legislative reforms aligned with international standards, the article offers essential recommendations for international lawyers engaging with arbitration in Pakistani transactions.

Note: “Reprinted from (Dispute Resolution Journal), (Vol. 77), (Issue 1), (2023), (P.1-21), with permission of Kluwer Law International.”

Keywords: Pakistan, Arbitration Agreements, Pakistani Arbitration Law, Arbitration Act 1940, UNCITRAL Model Law, NY Convention, Drafting Arbitration Clauses, Arbitrability of Disputes, Enforcement of Arbitral Awards, Alternative Dispute Resolution (ADR), Jurisdiction in Arbitration