LAHORE, May 12: A division bench of the Lahore High Court will remove a legal anomaly in the question whether the superior courts of Pakistan are competent to entertain banking suits for recovery from outside the country. Comprising Justice Syed Zahid Husain and Justice Tanvir Bashir Absari, the bench has set the next week to clarify the position and interpret the legal authority of the Financial Institutions (Recovery of Finance) Ordinance, 2001, and proposition whether Pakistani courts can extend their jurisdiction to foreign countries to issue writs for the recovery of loans.

The ambiguity arose when the LHC and the Sindh High Court gave conflicting decisions in the cases of similar nature.

The LHC had held in a case titled Zubair Vs UBL that Pakistani courts had the jurisdiction to entertain such suits under section 20 of the Civil Procedure Code. However, in a case titled Nadeem Ghani Vs UBL, the Sindh High Court decided in 2001 that the courts in Pakistan had no such jurisdiction under section 1 of the ordinance.

The court is seized of a number of appeals against two banks on the question of jurisdiction over banking transactions taking place outside Pakistan. Some of the appeals were filed against the decision of a banking court, which decreed on loans obtained from Habib Bank, Dubai, and United Bank, London.

Senior lawyers, including Hamid Khan, Jawad Hassan, Shamim Butt, Muhammad Afzal Sindhu and Iqbal Hamidur Rehman, are representing parties to the dispute.