Strengthening the Rule of Law in Pakistan: New Commercial Courts in Punjab

As I inched my way slowly through the emotionally charged, albeit, restrained crowd of TLP protestors outside the Governor House on 12 April 2021 and passed through the gates, I saw through the looking glass of hope into a future where there could be peace and stability on both sides of the wall. At that moment, what was happening outside the walls of Governor House was sharply contrasted with what was happening inside. Inside, on the sprawling lawns, Ali Jalal, Hassan Tariq, Mishka Khan, Haram Ajmal, Eiraj Hassan and other team members of the Planning and Development Board, Punjab Govt. had organized an elegant evening to mark the historic signing of the new Punjab Commercial Courts Ordinance 2021. Against the backdrop of giant flat-screens, charting out the last 18 months of intensive work by the Lahore High Court, Punjab Government and the World Bank, Governor Muhammad Sarwar signed the Ordinance. The scratch of the pen at sunset gave way to the sonorous call of the muezzin calling to maghrib.

Under the light of the new moon of Ramadan 1442 H, there was hope that the new law would benefit people on both sides of the wall and herald a new chapter into the rule of law and economic development in Pakistan. New commercial courts have been established in five major commercial districts of the Punjab. This is a first for Pakistan. It is the culmination of slow and steady steps taken by the judiciary, executive and private sector in collaboration over the last few years. Overseas Pakistanis have made a major contribution towards this. It was in response to overseas Pakistanis complaints to the Chief Justice of the Lahore High Court that a dedicated cell was established to deal exclusively with their issues – many of which were commercial in nature. The Pakistani diaspora around the world amounts to over 11 million people. That is 3 times the populations of Singapore, Denmark, Finland and equals all of Belgium or Tunisia. This diaspora is a national asset that should be appreciated and catered for in the development of commercial courts, rule of law and economic development. And that is exactly what the Lahore High Court did. Setting up the Overseas Pakistani Cell had an impact on Pakistan’s international image and standing in the World Bank’s Ease of Doing Business Index where Pakistan was previously placed at a dismal 136 out of 190 economies till 2019. Since then, we have jumped up to 108th ranking in ease of doing business. The World Bank, seeing the pro-active initiative of the Lahore High Court offered to assist them through the Punjab Government. What followed was a series of swift measures to improve the commercial dispute resolution forum in the Punjab. First was a notification by the Chief Justice in April 2020 which set up commercial courts. Next, dynamic district judges were cherry-picked to hear commercial cases exclusively. This was followed by intensive rounds of specialist training lectures and workshops on national and international commercial law and practice. Simultaneously, a working group was formed headed by two High Court judges, Justice Shahid Karim and Justice Jawad Hassan comprising members of the legal fraternity, the Punjab Government and the World Bank. The result was the Punjab Commercial Courts Ordinance 2021. Whilst these commercial courts promise to ease the path of business and commerce gradually (Rome wasn’t built in a day, after all), the greater impact will be in the realm of the rule of law.

In a country like Pakistan which lacks institutional memory and is weak in ‘follow-up’, passing law upon law in the legislature only serves to burden the legal system, not facilitate it. We are, already, an over-lawed country. It neither inspires confidence in the people nor establishes the stability that government and investment require. However, if courts are efficient and commercial law is effective, practical, and user-friendly in order to secure property rights and enforce contracts, then rule of law and economic development have space to flourish. Fortune favours the bold and two recent bold decisions by the judges’ spear-heading the commercial courts project – J. Shahid Karim and J. Jawad Hassan – have given hope of good fortune. In a December 2020 judgment in the case of Nestle Pakistan v Federation of Pakistan case, J. Shahid Karim while striking down certain statutory regulatory orders of the Federal Board of Revenue, analysed the rule of law in detail and stated the need “for a body of accessible legal rules for the successful conduct of trade, investment and business generally. It is universally accepted now that all official acts must conform to rules which are published and accessible. Any exercise of powers without framing rules to regulate them is arbitrary and capricious.” Similarly, in March 2021, in the case of Pizza Hut v Multan Development Page 3 of 3, A journey of a thousand miles begins with a single step. This single step taken by the Punjab Commercial Courts Ordinance 2021 is a step in the right direction. With the hope of commercial disputes being resolved faster and better, there is greater chance of certainty and stability for investors within and outside the country to feel confident in doing business, creating jobs, and thereby reducing risks of civil unrest.