KARACHI: Account frozen to comply with SC resolutions: AL-Rashid Trust case
By Our Reporter
KARACHI, May 24: Justifying the freezing of the Al-Rashid Trust’s accounts in Pakistan, Attorney-General Makhdoom Ali Khan told the Sindh High Court on Friday that the government had “no choice but to give effect to the Security Council resolutions.”
“If the government had not accepted the directions of the Security Council, it would have resulted in the closure of Habib Bank’s branches the world over and the country could have faced great economic difficulties,” submitted Mr Khan before a division bench comprising Justice Sabihuddin Ahmed and Justice Zia Pervez.
The petition filed by Muhammad Suleman was the consequence of refusal by Habib Bank to honour its two cheques with the endorsement “stop your account by the Government of Pakistan,” which the petitioner termed a violation of articles 23 & 24 of the constitution.
The arguments centred on international obligations and the need for domestic legislation.
Mr Khan argued that while dealing with the issue it must be kept in mind that emergency was still in force and certain executive actions could not be called in question.
The AG referred to section 41 (a) of the Banking Companies Ordinance and the UN Security Council Act XIV of 1948, and maintained that the exercise of the provisions of the Banking Companies Ordinance of 1962 was bona fide, legal and issued in the national interest, the interest of the financial industry, in consonance with Pakistan’s international commitments and obligations, and public security interest of Pakistan.
The SBP action was initiated bona fide on evidence of the Al-Rasheed Trust assisting, aiding, abetting, and/or encouraging the Taliban, Osama bin Laden and terrorists, against the interest of Pakistan, its national security, the economy, Pakistan’s international commitments, treaty obligations and customary international law and the Trust’s action was contrary to public policy and necessity.
It was the case of the respondents that the Trust was also responsible for inflammatory publications encouraging and inciting violence against the Government of Pakistan and encouraging action in favour of the Taliban, Osama bin Laden and terrorist organizations.
Mr Khan submitted that the UN Security Council through its Resolution Nos 1267 (1999) 1333 (2000) and 1373(2001) had decided to freeze, without delay, all funds and financial resources of the Taliban, Osama bin Laden, terrorist organizations/groups or of any person (s) providing financing to the same.
Subsequently, the Security Council Committee pursuant to Resolutions 1267 (1999) and 1333 (2000) also reissued its lists on 8th October 2001 and 26th November 2001, identifying the Trust as an organization/group whose assets and funds required freezing.
In this context, he cited from Resolution 1267 (1999) which, among other things, said: “(b) Freeze funds and other financial resources, including funds derived or generated from property owned or controlled directly or indirectly by the Taliban, or by any undertaking owned or controlled by the Taliban, as designated by the Committee established by paragraph 6 below, and ensure that neither they nor any other funds or financial resources so designated are made available, by their nationals or by any persons within their territory, to or for the benefit of the Taliban or any undertaking owned or controlled, directly or indirectly, by the Taliban, except as may be authorized by the Committee on a case-by-case basis on the grounds of humanitarian need.”
He also referred to the Federal Shariat Court’s judgment (PLD 1985 p334) which pertained to fulfilment of covenants and treaties with other nations. The judgment held that “The basis of the covenants of the United Nations is equality as well as reciprocity. Such covenants are, therefore, entitled to the highest respect and sanction in Islam.”
His contention was that the action taken by the respondent No 2 was in consonance with and had subsequently been corroborated, confirmed, accepted and ratified by the UN Security Council Resolutions, the US, the EU, other states and also by the Government of Pakistan.
Taking into account the evidence provided by the Federal Reserve Bank of New York and the State Banking Commission of New York directions, the requests and directions of the Security Council Resolutions, the EU, the US and other jurisdictions, the State Bank of Pakistan in order to protect the Pakistani financial industry, financial interests of Pakistani persons and the Government of Pakistan, the international commitments and obligations of the Government of Pakistan, and in order to take action against terrorist organizations and entities/persons assisting the same, in the national security and public interest and as a result of necessity took action as per the law against the Trust and other organizations.
If the SBP had not acted in the manner it did, it would have meant closure of branches of the bank across the world. “Where was the choice. You want closure of branches or comply with the resolutions,” The AG said.
When Justice Ahmed inquired how legality of the action could be sustained by law, Mr Khan referred to the UN Security Council Act XIV of 1948 which made the resolution part of the domestic law. He submitted that domestic legislation had to be in consonance with the international obligations.
The judge nevertheless observed that “it may be binding under international law but to enforce it on citizens, don’t you need an Act to make it part of the law?”
The petitioner, who appeared in the court and was assisted by Zafar Iqbal, argued that the Trust had not been banned, and he claimed that the action of the respondents was illegal and mala fide.
It was his contention that the AG’s stand ran contrary to the independence of the country, and alleged that sovereignty of the country was being compromised. It was his claim that by doing so the respondents had denied him the fundamental rights guaranteed to him under article 24 of the constitution. He also argued that section 41 of the Banking Companies Ordinance did not meet the requirements. The said provision of law had been invoked to justify patent illegal act on the part of the respondent No 1.
The AG claimed that rights under article 24 were “qualified rights,” and cited many authorities.
He also offered to take up the matter through diplomatic channel if he was provided with the relevant material by the petitioner.
Kazim Hasan, who was one of the amicus curie, was also supportive of the contentions of the AG, and submitted that had the respondents not acted in the manner in which they acted, it would have had a devastating impact on the operation of Habib Bank. He believed that the premise of national security should have been invoked. He emphasized the need for taking into account the “practical realities.”
The matter was adjourned to July 1 when another amicus curie, Mushtaq Memon, and the petitioner’s counsel would make submissions.
The respondents also contended that the petition was not maintainable.
