RAWALPINDI: The Lahore High Court (LHC) Rawalpindi Bench on Thursday dismissed a petition challenging the privatisation of Pakistan International Airlines (PIA), removing a key legal roadblock in the government’s ongoing efforts to divest its majority stake in the loss-making national flag carrier.

Justice Jawad Hassan issued a short order rejecting the petition, stating that detailed reasons would be shared later.

The petition had contested the legality of the privatisation, arguing that the federal government issued an advertisement for the sale of PIA without fulfilling the requirements laid out in Section 23 of the Privatisation Commission Ordinance, 2000.

The petitioner’s counsel claimed that the government had failed to properly assess PIA’s local and international assets and ignored principles previously settled by the Supreme Court regarding such transactions.

Arguing before the bench, the counsel insisted that the high court had jurisdiction under Article 199 of the Constitution to examine violations of law and Constitution by statutory bodies. He referred to a precedent set by the Supreme Court in Arshad Waheed vs Province of Punjab, authored by Justice Syed Mansoor Ali Shah, which elaborated on the scope of judicial review.

LHC ruling clears legal hurdle for govt’s plan to sell majority stake in loss-making national flag carrier

However, Justice Hassan noted that while courts can review administrative actions, judicial restraint must be exercised in matters of economic policy and financial decisions made by expert statutory bodies.

The petitioner further objected to the amendment introduced by the caretaker government in 2023 to Section 28 of the Privatisation Commission Ordinance, under which an appellate tribunal was constituted. He argued that such a tribunal was unnecessary since high courts are already constitutionally empowered to hear such cases.

Barrister Minaal Tariq, representing the Privatisation Commission, countered that the petition was both legally and factually flawed.

She maintained that all advertisement and asset evaluation requirements under the Ordinance were fulfilled and that the privatisation process cited in the petition had already become infructuous after the rejection of the sole bid in that particular round.

She argued that the current privatisation process is fully compliant with Article 173 of the Constitution and the Pakistan International Airlines Corporation (Conversion) Act, 2016. Emphasising that the government owns 96pc of PIA’s shares, she asserted that a competitive sale is essential to stem the national carrier’s financial bleeding and to fulfil Pakistan’s commitments to the International Monetary Fund (IMF).

The court also took note of similar cases already pending before the Sindh High Court (SHC) and a single-member LHC bench. Justice Hassan observed that under precedents set by the SHC in the KESC Labour Union case and the interpretation of the PIAC (Conversion) Act 2016, a broader judicial framework was already in motion.

Published in Dawn, July 4th, 2025