Improving Pakistan’s Contract Enforcement Ranking: WG Meeting 2

PRIME Institute conducted the second meeting its working group on Improving Pakistan’s Contract Enforcement ranking at its headquarters in Islamabad. The meeting was attended by Awais Siraj from Prime Minister’s Performance Delivery Unit; Khalid Mahmood, DG Trade Dispute Resolution Organisation; Faisal Shakeel,  Senior Journalist at Waqt News; Ahmad Bashir, Advocate Supreme Court; Shimail Daud, Former President, Rawalpindi Chamber of Commerce and Industries- PRIME Institute; Ayesha Bilal, COO PRIME Institute, Syed Ali Ehsan, Head of marketing and communications- PRIME Institute; and Shehryar Aziz, Research Associate- PRIME Institute.

Identifying the method for introducing reforms in the contract enforcement mechanism, came up first on the agenda. Mr. Awais Siraj said that to reform the legal system related to contract enforcement, a constitutional amendment would have to be sought. Ahmad Bashir said that arbitration is done under Arbitration Act 1940. He said that the said act has failed us.

Khalid Mahmood said, the biggest problem is enforcement. He highlighted that the Lahore Chamber of Commerce and Industries has a good arbitration council. Trade Development Authority of Pakistan too can arbitrate but only in cases pertaining to import/export. But the problem there too is the same- it has no enforcement mechanism. He said that it is very unfortunate that when a party is dissatisfied with the decision of ADR councils, the part simply refuses to comply. Thereafter, the courts of law have to be approached to enforce the decision of the ADR council, which was approached in the first place to avoid going to a court of civil law.

Ahmad Bashir informed the working group that there are two parts to the Civil Procedures Code- the orders and the sections. High Courts can change the orders. He emphasized the need to identify those reforms that can be brought about by the High Courts themselves; the method for summoning a defendant is one example.

For a reform in the sections of legislative acts, either legislator can be approached to introduce reform bill as private member’s bill. Or, the National Assembly’s standing committee on Law and Justice would have to be approached to introduce a bill in the NA. Awais Siraj recommended preparing a three-page report for the standing committee to pitch them the need for reform and the reform measures in brief. A more comprehensive document would also be needed, detailing the amended sections, but that does not need to be presented at the initial stage.

Khalid Mahmood opined that the PPP is relatively more receptive towards legislation. Therefore it would be better to approach such a legislator, who is a part of the standing committee and belongs to the Peoples Party and preferably he/she should also be a lawyer. Ahmad Bashir identified two members on the committee that he thought should be approached – Syed Naveed Qamar and Mohammed Raza Hayat Haraaj. Khalid Mahmood proposed that first a secondary research should be conducted to see reform proposals have been drafted by other individuals and entities in Pakistan.

Faisal Shakil was of the view that first the report containing reform proposals, produced by PRIME Institute should be circulated among a peer group of corporate lawyers. He said, we should get their views on the reforms that PRIME Institute is proposing.

Ahmad Bashir proposed that a default statute for alternate dispute resolution should be pitched so that if no such statute was agreed upon at the time of entering into a contract, then the default statute can be made binding for ADR on both the parties in a dispute.

Towards the end of the meeting, it was resolved that Ahmad Bashir would prepare the reform proposal and by the next meeting of the working group, the three-page proposal should have been circulated among the chosen NA standing committee members.

Agreed-upon action items:

  • Prepare reform legislative proposal
  • Review of the proposal by the working group
  • Identify and approach suitable NA committee members along with the proposal

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