In today’s world, time is the most valuable investment one can make. Investment how? Well, if time is spent and used in a way that one can reap the benefits the world offers in that given time, time really can be money!
Like every scenario, you’d want a good ending, right? So, let’s start off with the bad news before we move on to the positives.
The unfortunate thing is that our judicial system is dysfunctional, and anyone who’s been a victim of it, or has been involved in it, knows this for a fact. Any litigation involving contract enforcement is a nightmare scenario for most enterprises, especially smaller ones, because Pakistani courts have cases ongoing for several years, some even going on for more than two or so decades. When money is at stake, the suffering becomes even worse. Due to the fact that some money is already at risk, businesses cannot risk their businesses further by engaging in litigation. Most businesses are terrified of going to court to fight for their legal rights, and justifiably so, due to the incompetent and lethargic legal proceedings.
My usual counsel to clients, as a corporate with plenty of experience, is to pursue legal action as a last resort. In Pakistan, commercial agreements have mostly become unenforceable. Whether you’ve lent money or products and the other party violates the contract, you should probably move on and write it off, and if you do pursue legal action, don’t expect there to be any resolutions in a more acceptable time-frame. Arbitration has also failed as an alternative because it does deviate from the shortcomings of the system. We could be here all day talking about our legal system and the failure of past and present governments to implement major changes; if we talk about the good news now, that would be great, right?
On April 13, 2021, the Punjab Government introduced the Punjab Commercial Courts Ordinance, 2021, which is a new law for enterprises. The honorable Lahore High Court’s Justice Shahid Karim and Justice Jawad Hassan oversaw a committee that formulated this legislation. Both judges are well versed on the business world’s situation more than anyone else in the country. The fact that commercial litigation is being advocated by such brilliant legal and judicial minds gives one reason to be hopeful about the prospects. The law is immaculately composed, as it addresses all factual and legal issues that arise in corporate litigation.
The primary objective of this law is to resolve disputes arising from business transactions as quickly as possible. Specialized Commercial Courts would be established across Punjab as a result of the Ordinance to deal exclusively with commercial disputes between companies, firms, and people. Commercial Courts are required by statute to resolve all disputes within 180 days. The legislation expressly prohibits granting more than seven-day adjournments and, when relevant, imposes necessary charges if a party is delaying the proceedings. A defendant has only 30 days after the case is filed to file a reply in the form of a ‘leave to defend.’ The cases usually only proceed if the defendant raises questions that are significant in the court of law; else, cases are decided quite quickly. The court will also have the right to order the presentation of any record they would want to check. In keeping with the times, e-filing has been made available for all filings. These are all ground-breaking moves in the efficient enforcement of the law, and so they will go a long way toward restoring confidence of existing and potential investors in our courts.
Justice Jawad sees restoring faith of investors in the judicial system as the responsibility of the courts.
So, everything isn’t inherently bad. The positive ending is that, Pakistan has significantly improved in the World Bank’s rankings and moved to 108th place in the overall rating for the ‘Contract Enforcement’ indicator. If the proposed legislation is properly implemented, it will have far-reaching impacts for Pakistan’s economy as a whole.