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The technicality that led to Nawaz Sharif's disqualification

Updated July 28, 2017

On Friday, Prime Minister Nawaz Sharif was sent packing by the Supreme Court of Pakistan for not being 'honest' — a prerequisite for eligibility to the chief executive's office, enshrined in Article 62 of the Constitution.

However, it was not the litany of allegations raised in the 10-volume report of the joint investigation team (JIT) that overwhelmed the apex court into issuing the order. In fact, the judges dispatched nearly all of the questions raised to various accountability courts to probe and judge, saying that they did not fall under the apex court's purview.

It was a key technicality emerging from a discovery the JIT made in the UAE that gave the judges enough reason to disqualify Sharif directly. It was based on an allegation that Sharif's counsels had not been able to deny.

The iqama that brought Sharif down

In its report, the JIT said it had secured evidence directly from the UAE's Jebel Ali Free Zone Authority (Jafza), a regulatory body, confirming that Nawaz Sharif not only served as chairman of the board of a Dubai-based company, he also drew a salary of 10,000 dirhams between Aug 7, 2006 and April 20, 2014 — till nearly a year after assuming office. The sticking point was that Sharif did not declare this income in his nomination papers.

The Sharif family initially denied the claim.

However, upon the Supreme Court's questioning, Sharif's counsel — Khawaja Harris Ahmed — conceded before the court that Hassan Nawaz, the prime minister's younger son, was the owner of Capital FZE and Sharif its chairman. However, he insisted that though the ousted prime minister was designated chairman, he did not draw any salary from the company.

The purpose of the arrangement, explained the counsel, was solely to secure an iqama — a UAE work visa — which would allow the prime minister easy access to the Gulf state "in his years in exile".

However, according to a Khaleej Times report on the matter, UAE's labour laws mandate that all employees must receive a salary through a bank account under the UAE's Wage Protection System (WPS), "failing which the firm can be blacklisted and shut down".

This technicality proved to be the former prime minister's undoing.

"The [...] question emerging for the consideration of this Court is whether respondent No. 1 [Nawaz Sharif] as a Chairman of the Board of Capital FZE, is entitled to salaries and whether the salaries if not withdrawn being receivable as such constitute assets which require disclosure in terms of Section 12(2) of the Representation of the People Act (ROPA), 1976 and whether his failure to disclose them would entail his disqualification," the court noted in its judgement.

Since the word 'asset' was not defined in the ROPA, the court relied on Black’s Law Dictionary to ascertain its meaning, finding that it includes:

(i) something physical, such as cash, machinery, inventory, land and building;

(ii) an enforceable claim against others such as accounts receivable;

(iii) rights, such as copyright, patents, trademark etc;

(iv) an assumption, such as goodwill;

"The definition of the word 'receivable'," the court noted, "as used in the above mentioned definition [...] is also relevant, which means [...] 'any collectible whether or not it is currently due'."

The Supreme Court also looked up the word ‘receivable’ in the Business Dictionary, finding that it is an:

“Accounting term for amount due from a customer, employee, supplier (as a rebate or refund) or any other party."

Sharif's fate was thus sealed.

"The definitions reproduced above leave no doubt that a salary not withdrawn would nevertheless be receivable and as such would constitute an asset for all legal and practical purposes," the court reasoned.

"When it is an asset for all legal and practical purposes, it was required to be disclosed by respondent No. 1 in his nomination papers in terms of Section 12(2) of the ROPA ."

The court also recalled that the counsel for Sharif himself had affirmed that the prime minister indeed was a chairman of the board of Capital FZE and that he was entitled to a salary — even if he never withdrew it.

"It has not been denied that respondent No. 1 being Chairman of the Board of Capital FZE was entitled to salary, therefore, the statement that he did not withdraw the salary would not prevent the un-withdrawn salary from being receivable, hence [making it] an asset," the court reasoned.

The court concluded that Nawaz Sharif had been 'dishonest' by not declaring this receivable salary in his nomination papers for the 2013 election, as required under Section 12(2)(f) of the ROPA.

"Where respondent No. 1 did not disclose his aforesaid assets, it would amount to furnishing a false declaration on solemn affirmation in violation of the law mentioned above, therefore, he is not honest in terms of Section 99(1)(f) of the ROPA and Article 62(1)(f) of the Constitution of the Islamic Republic of Pakistan," the court concluded.

Sharif would, therefore, have to go.

All five judges concurred.