The development of specialized commercial courts has flourished in recent years, and cities like Singapore, Dubai, and London have been pioneers in creating an institutional framework that ensures investors’ trust. The model proved to be effective in making a country an attractive destination for international trade and investment by creating specialized commercial courts. However, the effectiveness of such courts depends on the complex combination of factors such as judicial independence, procedural efficiency, legal expertise, and various other aspects connected with the rule of law. The issue is how seriously one should consider this idea about constitutional amendment as an attempt to create the ecosystem of this kind, or whether it is just another show trying to make an impression of progress while ignoring institutional deficits, which have become a problem in Pakistan’s judicial system for many years.
The recently made proposal by the Law and Justice Commission of Pakistan for introducing the International Commercial Court through a constitutional amendment has become the subject of a heated debate. While this suggestion has been viewed as a truly revolutionary step which would turn Pakistan into an attractive destination for international investors and best practices, in practice it looks like yet another cosmetic solution to a much deeper issue.
It has been rightfully put into question by the former Supreme Court judge Mansoor Ali Shah whether it is a meaningful initiative or just a cosmetic exercise. These questions raised by Mr. Shah seem to be quite relevant as the credibility of international commercial courts is determined not by the amendments of the constitution, but by the laws in which they operate. Foreign investors pay attention to the independence of the judges, certainty of the law, its enforcement and absence of executive interference in the proceedings. Without having these important elements in place, the creation of the new court might be regarded as a farce.
In general, this proposal comes at an unfortunate time and in unfortunate conditions. The Arbitration Act, 1940, is still in force in Pakistan. It operates based on the philosophy of the extensive role of the judiciary rather than modern arbitration principles. The court will be used to enforce arbitral awards; however, if there is no fundamental revision of the substantive framework of arbitration in Pakistan, it would once again become a mere illusion. It might become the mechanism for avoiding, instead of solving, the structural problems, if there is no modern arbitration law based on the UNCITRAL Model Law in Pakistan.
There is also a certain vagueness with regard to the jurisdiction of this court as well. The former Justice Shah has pointed out that there is nothing about the composition of the court, procedure, appeals, connection with arbitration, or presence of international judges. Such ambiguity is definitely unacceptable, especially considering the constitutional implications of this new Article 212A. It was not surprising that the legal community insisted on clarifications before jumping into yet another costly constitutional experiment.
It also remains unclear how the judiciary, charged with interpreting the law and ruling upon cases, is to legislate for new rules for the process. The failure to distinguish between the institutions undermines the very principle of separation of powers that ensures judicial independence. Rather than creating another loophole for an inefficient and corrupt judiciary system, the judicial services could be improved through normal procedures and normal courts, as proposed by Abdul Moiz Jaferii.
The proponents of the proposal point to such examples as the Singapore International Commercial Court and the Dubai International Financial Centre Courts. However, it does not consider a critical element, namely the intentional creation of a business-friendly justice system that has remained intact and business-friendly due to the maintenance of institutional integrity and a business-friendly approach. They have no such illusions regarding the existence of institutional compromise in the commercial courts, as well as the absence of judicial independence.
Before the constitutional experiment, there are hard questions that need to be addressed: why should foreign investors have any confidence in a court in the constitutional structure where judicial credibility has been seriously damaged? How can it ensure that the court is shielded from the institutional capture experienced by other judicial innovations? Investor confidence is built on commitment to the commercial rule of law, not institutional quick fixes, as shown by Singapore, Dubai and London. The question for Pakistan remains whether it will engage in the long process of restoring the credibility of the judicial system or use quick fixes that are not the solution to the problem.
It would be interesting to consider the consequences of this constitutional experiment if it continues without finding a way to solve existing problems. In this case, Pakistan may squander its judicial resources and undermine its judicial system even more if it does not gain international trust and faith. Moreover, the project can establish a two-tier justice system violating the constitutional principle of equality before the law, as there will be inequalities between commercial litigants and ordinary citizens. Even more seriously, if this experiment is not successful, then it will delay the judicial reforms in Pakistan for at least twenty years, as policymakers will assume that international commercial courts are impossible to establish in Pakistan, not that they have to overcome some problems. However, the way out of this situation starts from understanding that constitutional amendments alone will not bring about the needed changes, and much work has to be done with patience and institutionally.
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The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.
Usman Umar is a recent graduate from Government College University Lahore and is currently practicing as a trainee lawyer.
