Pakistan’s UNCITRAL Model Law moment

Rana Sajjad/September, 2021

Pakistan’s recent Supreme Court judgment titled “Orient v SNGPL” is being widely hailed as a landmark judgment in the realm of international arbitration. It has deservedly generated a lot of excitement for its analysis of critical issues and enunciation of principles including kompetenz-komeptenz, incorporation of an arbitration clause in the case of multiple contracts and public policy as a guise for refusing enforcement of foreign arbitral awards.

Undeniably, these are long-awaited and welcome rulings that signal Pakistan’s evolving and progressive jurisprudence in connection with international arbitration. For that reason alone, this judgment stands out as one of the bright spots in Pakistan’s jurisprudence that will go a long way in modernizing and strengthening Pakistan’s legal regime governing international arbitration.

To me though, one of the most remarkable aspects of this judgment that may have gone unnoticed is the Supreme Court’s reference to and discussion of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration.

To put this into context, this is a watershed moment as this is the first time the Supreme Court has elaborated on the need for and the advantages of enacting the UNCITRAL Model Law in Pakistan. Clearly, this is a giant leap forward for Pakistan as it is a definitive recognition by Pakistan’s apex court of the need for having a modern legal framework for international arbitration proceedings in Pakistan. Specifically, the court observed that the UNCITRAL Model Law “covers all stages of the arbitral process from the arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award. It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world.”

In another paragraph, while referring to the conspicuous absence of the UNCITRAL Model Law from Pakistan’s legal regime, the court indicated its disappointment at the fact that it had not been incorporated/enacted yet. The Court remarked that: “In a commercially fast paced world, where the world is essentially a global village, it is regrettable that Pakistan, although a signatory to UNCITRAL, has till date not incorporated the provisions of the Model Law into its domestic law and the Foreign Arbitration Act makes no mention of incorporation by reference.”

One of the reasons why I am thrilled to read these paragraphs is that, to me, they are a reaffirmation of the importance of the enactment of the UNCITRAL Model Law, a goal which CIICA has been working towards the past few years. Specifically, CIICA’s role in this campaign and its connection with UNCITRAL goes back to April, 2018, when CIICA co-organized the first-ever conference in Pakistan that was supported by the UNCITRAL Regional Centre for Asia and the Pacific (RCAP). The conference marked CIICA’s 3rd anniversary and also celebrated the 60th anniversary of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. CIICA also had the privilege of having another conference supported by UNCITRAL RCAP which was organized in Islamabad to celebrate the launch of CIICA’s Young Arbitration Group (YAG). Discussions on the need to modernise Pakistan’s legal framework for arbitration, including enactment of the UNCITRAL Model Law, was one of the features of these conferences.

Although legislative reforms have been part of CIICA’s mission since its inception, in order to achieve this objective in a focused and organised manner, around a year ago, CIICA also set up a legislative reforms committee with the aim of creating a vibrant ecosystem for arbitration in Pakistan.

The Supreme Court’s remarks on the enactment of UNCITRAL Model law are reassuring and I believe they would help revitalize CIICA’s efforts to reform Pakistan’s legal regime governing international arbitration and hopefully, in the not-too-distant future, also help Pakistan finally become an UNCITRAL Model Law country.