PAKISTAN Law and Practice Contributed by: Abdul Muqtadir Khan, Syed Absar Rahat Rizvi, Hammad Saleem and Zair Zaman Khan, Khan & Arshad
4.3 Categories of Arbitral Awards Not Enforced Domestic Awards In relation to domestic awards, enforcement may be refused where: • the award has been procured through misconduct of the arbitrator; • the arbitrator has exceeded the authority conferred under the arbitration agreement; • the arbitration agreement or reference itself is invalid; or • the award is otherwise liable to be set aside under the Arbitration Act, 1940. Foreign Awards In relation to foreign arbitral awards, awards will not be enforced where they do not satisfy the requirements of the Recognition and Enforcement (Arbitration Agree - ments and Foreign Arbitral Awards) Act, 2011, includ - ing awards that are not binding, have been annulled or suspended by the competent authority at the seat of arbitration, or fall within any of the refusal grounds under Article V of the New York Convention. These include: • awards arising from invalid arbitration agreements; • awards rendered without proper notice or opportu - nity to present a case; • awards dealing with matters beyond the scope of the arbitration agreement; • awards involving non-arbitrable subject matters under Pakistani law; or • awards contrary to Pakistani public policy. Awards from states that are not New York Convention signatories fall outside the 2011 Act altogether. Each of these grounds has been construed narrowly. The courts have held that the Article V grounds are exhaustive, that the burden of establishing them rests on the party resisting enforcement, and that Article V is permissive rather than mandatory, so that a court may recognise and enforce an award even where a ground is shown to exist. The enforcing court acts in substance as an executing court. In circumstances, the courts have also declined to summon the record of the arbitration, holding that the court is not empow -
Pending Reform Reform of the domestic regime is pending: a draft Arbitration Bill modelled on the UNCITRAL Model Law, approved by the Federal Cabinet in 2024, would replace the 1940 Act, but it has not yet been enacted. 4.2 Variations in Approach to Enforcement of Arbitral Awards Degrees of Judicial Scrutiny Pakistan adopts different enforcement mechanisms depending on the category of arbitral award. Domes - tic awards made in Pakistan are subject to the more court-supervised procedure under the Arbitration Act, 1940. The award must be submitted to the court, and before it is converted into a decree the parties may challenge it on statutory grounds, including miscon - duct of the arbitrator, invalidity of the arbitration pro - ceedings, or the award being beyond the scope of the arbitration agreement. The court therefore exercises a greater degree of pro - cedural oversight before enforcement. In contrast, for - eign commercial arbitral awards are governed by the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, which follows the framework of the New York Convention. The High Court’s role is limited to determining whether any of the narrow refusal grounds under Article V of the Con - vention are established. The court does not re-examine the merits of the dis - pute or reconsider the findings of the arbitral tribunal. A further distinction exists for ICSID investment awards, which are governed by the Arbitration (International Investment Disputes) Act, 2011. Such awards benefit from a separate enforcement mechanism based on Pakistan’s obligations under the ICSID Convention, and are enforced in the same manner as final judg - ments of Pakistani courts after registration. Therefore, although Pakistan generally maintains a pro-enforce - ment stance towards arbitration, the procedure and extent of judicial scrutiny vary according to whether the award is domestic, a New York Convention foreign award or an ICSID investment award.
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