Commercial courts

Published May 11, 2025
The writer is a lawyer.
The writer is a lawyer.

“There can be no peace without justice, no justice without law and no meaningful law without a court to decide what is just and lawful under any given circumstance.” — Prof Benjamin B. Ferencz

THE recent abolition of the Sindh High Court’s (SHC) original jurisdiction has engendered renewed concerns about the district courts’ capacity. For the uninitiated, while civil suits across Pakistan are filed before the district courts as courts of first instance, the SHC’s principal seat at Karachi has historically enjoyed ‘original jurisdiction’ to entertain civil suits beyond a certain monetary value. While analogous at first sight, port cities across the subcontinent were vested with similar powers. The grant of original jurisdiction was predicated on the belief that port cities, as epicentres of commerce and industry, involve cutting-edge commercial disputes, the adjudication of which ought to be entrusted to the high courts. Nonetheless, this meant that ordinary civil disputes too made their way to the high courts. Unsurprisingly, the SHC’s original side has remained clogged, thus inhibiting its ability to expeditiously decide commercial disputes and submerging the very basis of the grant of original jurisdiction.

Bemoaning this aspect, Justice Yousuf Ali Sayeed, in G.A. Pathan’s case, observed: “Suits that are of a commercial nature are often overwhelmed by the preponderance of matters of an ordinary civil nature, whether in the nature of suits for administration, partition, specific performance or related matters for cancellation of sale agreements, etc. A jurisdiction based solely on a pecuniary threshold is unworkable, as has proven so over time.”

Ordinary civil disputes too made their way to the high courts.

Such concerns ought to have propelled the government into promoting mediation, revisiting archaic procedures, and regulating the SHC’s original jurisdiction by gradually transferring certain classes of civil suits to the district courts while contemporaneously investing in their capacity. The government has, nevertheless, abolished the SHC’s original jurisdiction forthwith, thus inundating the already burdened district courts with cases now transferred from the SHC. The timing of this move too has raised concerns, with the bar associations campaigning for the abolition of the SHC’s original jurisdiction ingratiating themselves with the government by endorsing its position on the 26th Amendment and the transfer of judges to the Islamabad High Court.

The capricious abolition of the SHC’s original jurisdiction exposes the capacity constraints of the district courts, impedes access to justice, and erodes the public’s confidence in the justice system. Could the government have introduced other reforms to arrest the proliferation of cases on the SHC’s original side or would its decision to simply transfer all civil suits to the district courts magically improve access to justice?

One route has been envisaged by Justice Jawad Hassan in Pizza Hut’s case, where he underscored the role of commercial courts in the expeditious disposal of cases of a commercial nature. Similarly, while highlighting the importance of regulating the SHC’s original jurisdiction in in G.A. Pathan’s case, Justice Yousuf Ali Sayeed cautioned that “there is still a genuine purpose to be served by preserving such jurisdiction to the extent of suits involving commercial disputes”. He, thus, suggested that the court’s original jurisdiction may be restructured as a commercial side, with commercial disputes beyond a certain pecuniary value being heard by the SHC.

This practice has also been adopted in Bombay where suits involving co-mmercial disput­­es beyond INR100 million are heard by the Bombay High Court’s com-mercial division. Commercial disputes which do not meet such threshold, on the other hand, are consigned to the commercial courts in each district. The provincial assembly may, thus, consider legislating to create specialised commercial courts in Karachi, with the SHC retaining the jurisdiction to hear commercial disputes beyond a certain pecuniary value. To obviate regular civil suits from making their way to the SHC, such legislation may statutorily define the contours of what constitutes a ‘commercial dispute’.

At a time when the country’s security and political establishment endeavour to attract investment, particularly in the energy and mining sectors, Pakistan’s ability to enforce contracts and its dispute resolution ecosystem will come under scrutiny. Will the government be propelled into initiating reforms and ameliorate such concerns or will we continue to kick the can down the road to appease leaders of the local bar associations and other vested interests? The world is watching!

The writer is a lawyer.

X: MoizBaig26

Published in Dawn, May 11th, 2025

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