2002 SCMR 1694




Per Munir A. Sheikh, J.
(a) Constitution of Pakistan (1973), Article 185(3)
r/w Arbitration Act (X of 1940)—Ss. 20 & 34—

These two appeals by leave of the Court are directed against the judgment dated 14-2-2002 of the High Court. Leave was granted, inter alia, to consider the following points:—

(a) Whether the arbitration agreement between the parties was binding upon them notwithstanding the coming into force of the Bilateral Investment Treaty?

(b) Whether the trial Court was right in holding that the petitioner was not an investor within the meaning of the said word as defined in Bilateral Investment Treaty?

(c) Whether it has been rightly held keeping in view the circumstances of the case that the petitioner had waived its right to seek remedy before ICSID?”

(b) Constitution of Pakistan (1973), Article 175(2)

The argument raised by the learned Attorney-General has considerable force.

Admittedly, in Pakistan, the provisions of the Treaty were not incorporated through legislation into the laws of the Country, therefore, the same did not have the effect of altering the existing laws, as such, rights arising therefrom called treaty rights cannot be enforced through Court as in such a situation, the Court is not vested with the power to do so.

It may be significantly mentioned here that according to Article 175(2) of the Constitution of Islamic Republic of Pakistan, no Court has any jurisdiction unless conferred by or under any law or the Constitution, therefore, treaty unless was incorporated into the law so that it become part of Municipal Laws of the Country, no Court shall have jurisdiction to enforce any right arising therefrom. [p. 1711] C

(c) Constitution of Pakistan (1973), Article 97 &
Fourth Sched., Part I, Item 3—

Since Majlis-e-Shoora has the power to make laws in respect of these matters, therefore, by virtue of Article 97 of the Constitution, the Federal Government of Pakistan has the power to exercise executive authority in respect thereof which was exercised to ratify the treaty, but it has not conferred power on the executive authority to legislate a statute. [p. 1712] D

(d) Constitution of Pakistan (1973), Article Fourth Sched.,Part I, Item 3—
r/w Arbitration Act (X of 1940)—Ss. 20 & 34—

As regards resolution of dispute arising from investment as per terms of Bilateral Investment Treaty in this case, no law has been made in Pakistan of the nature as was done by Zambia Government or other States, therefore, the same could not be enforced as law in order to claim that the alleged choice given to the appellant under the said treaty to approach ICSID for arbitration had preference over the existing lawful contract between the parties inclusive of arbitration clause which is binding on the parties. [p. 1721] E

Advocates for the Appellant (in Civil Appeal No. 460 of 2002) :
Makhdoom Ali Khan, Attorney-General for Pakistan,
Uzair Bhandari, Advocate, Barrister Khurram Hashmi, Advocate and
Mehr Khan Mali, Advocate-on-Record.

Advocates for the Respondents (in Civil Appeal No. 460 of 2002) :
K.M.A. Samdani, Advocate SC, Farrukh Karim Qureshi, Advocate,
Syed Ishtiaq Haider, Advocate SC, Shahbaz Hussain Bokhari, Advocate and
M.S. Khattak, Advocate-on-Record.

Date of hearing : 15th, 16th, 17th, 20th and 21st of May, 2002.

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