Reforming Arbitration in Pakistan: A Critical Analysis of the Draft Arbitration Act 2024

Reforming Arbitration in Pakistan: A Critical Analysis of the Draft Arbitration Act 2024

By

Mian Zafar Iqbal Kalanauri,

Advocate Supreme Court Pakistan, Arbitrator (Fellow CIArb), Barrister, Mediator (CEDAR, IMI, CMC, USA), Master Trainer in Mediation (CEDAR), Legal Educator, Reformist of Judicial System and Legal Education, White-Collar Crime Investigator

Index of Contents

1. Preface
2. Executive Summary
3. About the Author
4. Introduction
5. Historical Context: Arbitration Act 1940 and Its Limitations
6. Key Features of the Draft Arbitration Act 2024
7. Comparative Analysis with UNCITRAL, UK, India, Singapore & Hong Kong
8. Critical Weaknesses of the Draft Act
   1. Arbitration by Sitting Judges
   1. Institutional Arbitration Gap
   1. Timelines and Enforcement Issues
   1. Fee Regulation by Courts
   1. Broad Public Policy Exception
9. Proposed Amendments with Comparative Justifications
10. Recommendations for Legislative Reform
11. References
12. Conclusion

 

Preface

The Draft Arbitration Act, 2024, represents a pivotal moment in Pakistan’s legal history. After decades of reliance on the outdated Arbitration Act of 1940, this reform seeks to align Pakistan with global standards of dispute resolution, particularly those embodied in the UNCITRAL Model Law. The present study critically evaluates the strengths, weaknesses, and shortcomings of the draft statute, particularly its silence on restricting serving judges from acting as arbitrators, its insufficient institutional framework, and the broad scope of the public policy exception. Drawing upon comparative experiences from the United Kingdom, India, Singapore, and Hong Kong, this article offers a constructive critique along with proposed amendments to ensure that Pakistan’s arbitration law fosters efficiency, independence, and international credibility.

Executive Summary

The Draft Arbitration Act, 2024 is designed to modernize Pakistan’s arbitration regime and promote investor confidence by limiting judicial interference, empowering arbitral tribunals, and ensuring enforceability of awards. However, several issues undermine its effectiveness:

1. Sitting Judges as Arbitrators – The absence of a prohibition against serving judges acting as arbitrators risks conflicts of interest, undermines judicial independence, and burdens the judiciary.
2. Institutional Weakness – Unlike SIAC, LCIA, or MCIA, Pakistan lacks a robust institutional framework to administer arbitrations and regulate fees transparently.
3. Timelines – While domestic arbitration is bound by an 18-month completion period, international arbitrations seated in Pakistan are exempt, creating uncertainty.
4. Public Policy Ground – The retention of a broad “public policy” exception risks misuse, as seen in Indian jurisprudence prior to the 2015 and 2019 reforms.
5. Regulation of Fees – Vesting High Courts with the power to regulate arbitral fees contradicts international practice where institutions maintain transparent fee schedules.

Recommendations

• Explicit prohibition on serving judges as arbitrators.
• Establishment of a Pakistan Arbitration Council (PAC) for accreditation, oversight, and ethical codes.
• Narrowing the public policy ground to fraud, corruption, natural justice, and fundamental morality.
• Timelines of 18–24 months for both domestic and international arbitrations.
• Institutional regulation of arbitral fees, leaving High Courts to regulate only ad hoc arbitrations.
• Adoption of Med-Arb and Arb-Med hybrid models to encourage settlement.

About the Author

Mian Zafar Iqbal Kalanauri is a distinguished Advocate of the Supreme Court of Pakistan, Barrister-at-Law, and Fellow of the Chartered Institute of Arbitrators (CIArb). Accredited as a Mediator by CEDAR, IMI, and CMC (USA), and recognized as a Master Trainer in Mediation, he pioneered the development and institutionalization of Alternative Dispute Resolution (ADR) in Pakistan more than two decades ago. A reformist of judicial education and legal practice, he has trained judges, lawyers, and arbitrators both nationally and internationally. His expertise spans arbitration, mediation, legal education reform, and white-collar crime investigations. His work reflects a commitment to modernizing Pakistan’s legal system in alignment with international best practices.

Reforming Arbitration in Pakistan: A Critical Analysis of the Draft Arbitration Act 2024

By

Mian Zafar Iqbal Kalanauri,

Advocate Supreme Court Pakistan, Arbitrator (Fellow CIArb), Barrister, Mediator (CEDAR, IMI, CMC, USA), Master Trainer in Mediation (CEDAR), Legal Educator, Reformist of Judicial System and Legal Education, White-Collar Crime Investigator

Summary of Draft Arbitration Act, 2024 (Pakistan)

Purpose and Context

• Replaces the outdated Arbitration Act, 1940.
• Aligns Pakistan’s arbitration law with international best practices, particularly the UNCITRAL Model Law (1985, amended 2006).
• Aims to promote speedy dispute resolution, minimize judicial interference, and strengthen party autonomy.
• Covers domestic arbitration and international commercial arbitration.

Key Features

General Provisions

• Applies to all arbitrations seated in Pakistan (except ICSID-related awards).
• Recognizes institutional arbitration by duly notified arbitral institutions.
• Judicial intervention strictly limited to circumstances specified in the Act.
• Communications may be exchanged electronically.

Arbitration Agreement

• Must be in writing (including electronic records).
• Courts must stay legal proceedings if a valid arbitration agreement exists.
• Courts and tribunals empowered to grant interim measures (injunctions, asset protection, security for claims, confidentiality orders, etc.).

Arbitral Tribunal

• Parties free to decide number and appointment of arbitrators (default: sole arbitrator).
• Courts (High Courts) may step in if parties fail to appoint arbitrators.
• Arbitrators must disclose conflicts of interest; grounds for challenge specified.
• Tribunal competent to rule on its own jurisdiction (principle of competence-competence).

Conduct of Proceedings

• Tribunal not bound by CPC, Qanun-e-Shahadat, or Stamp Act.
• Parties free to set procedures; otherwise, tribunal has discretion.
• Tribunal may order consolidation of proceedings (if agreed by parties).
• Proceedings to be completed within fixed timelines (domestic cases: 18 months, extendable).
• Tribunal may encourage settlement, mediation, or conciliation during proceedings.

Awards

• Must be written, reasoned (unless agreed otherwise), signed, and dated.
• Tribunal may issue interim, partial, or final awards.
• Costs governed by “costs follow the event” principle (loser pays), unless tribunal decides otherwise.
• Tribunal empowered to grant same reliefs as courts (declarations, specific performance, damages, rectification, etc.).

Challenges to Awards

• Awards can only be set aside by courts on limited grounds:
  • Incapacity of party.
  • Invalid arbitration agreement.
  • Procedural unfairness or inability to present case.
  • Excess of jurisdiction.
  • Improper tribunal composition.
  • Subject matter non-arbitrable.
  • Award against public policy of Pakistan (fraud, corruption, breach of natural justice, immorality).
• Time limit: 90 days to apply for setting aside award (extendable by 30 days for sufficient cause).

Enforcement

• Arbitral awards are final and binding.
• Enforceable as decrees of court under CPC.
• Foreign awards enforceable under New York Convention regime.

Institutional and Regulatory Framework

• High Courts empowered to:
  • Appoint arbitrators if parties default.
  • Regulate arbitral fees.
  • Assist tribunals in taking evidence.
• Ministry of Law to notify recognized arbitral institutions.

Impact

• Brings Pakistan in line with international arbitration standards.
• Encourages foreign investment by providing a reliable arbitration framework.
• Enhances efficiency in domestic dispute resolution.
• Limits misuse of litigation to delay or frustrate arbitration.

Comparative Table: Arbitration Act 1940 vs Draft Arbitration Act 2024 vs International Standards

Feature	Arbitration Act 1940 (Pakistan)	Draft Arbitration Act 2024 (Pakistan)	UNCITRAL Model Law / UK / India (comparative standard)
Governing Law	Outdated, colonial framework; no reference to UNCITRAL	Based on UNCITRAL Model Law (1985/2006); modernized	UNCITRAL Model Law widely adopted; India adopted 1996 Act, UK 1996 Act
Arbitration Agreement	Required written agreement, limited recognition of electronic records	Written agreements include electronic communications	Broad recognition of electronic & flexible agreements
Judicial Intervention	Extensive court interference throughout arbitration process	Judicial intervention strictly limited to specified provisions	Judicial role minimal, only for support/supervision
Appointment of Arbitrators	Courts often appointed arbitrators; limited party autonomy	Parties free to appoint; High Courts intervene only if default	Strong party autonomy; courts step in only if default
Tribunal Powers	Narrow; no express power to grant interim measures	Tribunal empowered to grant interim measures & rule on jurisdiction	Tribunals granted competence-competence & interim powers
Procedural Rules	Bound by CPC & Evidence Law	Not bound by CPC, QSO or Stamp Act; flexible party autonomy	Flexibility; not bound by strict civil procedure rules
Timeline for Award	No statutory timelines; arbitrations often delayed	Domestic cases: 18 months (extendable); International cases exempt	India: 12-18 months’ timeline; UK & UNCITRAL – no strict limits
Settlement Facilitation	No express provision for mediation/conciliation by tribunal	Tribunal may facilitate settlement, mediation, conciliation	Tribunals may encourage ADR/settlement
Grounds to Challenge Award	Broad court powers; frequent setting aside of awards	Limited to incapacity, invalid agreement, jurisdiction, public policy etc.	Challenges limited to incapacity, invalidity, due process, public policy
Enforcement of Awards	Uncertain; domestic awards enforceable, foreign awards inconsistent	Awards final & binding; enforceable as court decrees; foreign awards under NY Convention	Final and binding; enforced under New York Convention globally

Critique of the Draft Arbitration Act, 2024

General Strengths

The Draft Arbitration Act, 2024 represents a significant modernization of Pakistan’s arbitration framework, replacing the Arbitration Act, 1940¹ with a statute aligned to the UNCITRAL Model Law². It strengthens party autonomy, reduces judicial intervention, and provides clear mechanisms for enforcement consistent with the New York Convention³.

Weaknesses and Issues

(a) Arbitration by Sitting Judges

The draft permits the appointment of arbitrators by High Courts without explicitly prohibiting serving judges from acting as arbitrators. This raises serious concerns of impartiality, conflict of interest, and judicial workload. In comparative jurisdictions such as UK, India, Singapore, and Hong Kong, sitting judges are not permitted to serve as arbitrators.⁴

(b) Institutional Arbitration Gap

Unlike SIAC (Singapore), LCIA (UK), or MCIA (India), Pakistan lacks a strong institutional framework.⁵

(c) Timelines

While domestic arbitrations are subject to an 18-month limit,⁶ international arbitrations seated in Pakistan are exempt, unlike in India where a 12–18 month timeline applies under the 2015 and 2019 amendments.⁷

(d) Costs and Fees

The draft vests High Courts with powers to regulate arbitral fees. This is inconsistent with global practice, where institutions regulate fees through transparent schedules (e.g. ICC, LCIA, SIAC).⁸

(e) Public Policy Exception

Section 39 retains a broad “public policy” test, risking excessive judicial interference. India initially suffered from this defect⁹ until narrowing reforms in 2015 and 2019, aligning closer to the UK Arbitration Act 1996¹⁰ which applies a narrow fraud/corruption standard.

Comparative Jurisdictions

• UK Arbitration Act 1996 restricts judicial intervention and prohibits serving judges from arbitrating.¹¹
• India narrowed its public policy test after landmark cases such as Renusagar v GE¹², ONGC v Saw Pipes¹³, and Western Geco¹⁴, later clarified in Associate Builders v DDA.¹⁵
• Singapore and Hong Kong maintain modern regimes based on the UNCITRAL Model Law, with institutional strength and judicial restraint.¹⁶

Recommendations for Amendment

1. Insert a clause explicitly prohibiting sitting judges from acting as arbitrators (allowing retired judges).
2. Establish a Pakistan Arbitration Council (PAC) to accredit institutions.
3. Narrow the public policy ground to fraud, corruption, natural justice, and morality.
4. Apply indicative timelines (e.g. 24 months) even to international arbitrations seated in Pakistan.
5. Allow institutions to regulate fees, not High Courts.
6. Promote Med-Arb procedures to encourage settlement.

References:

¹ Arbitration Act 1940 (Pakistan).
² UNCITRAL Model Law on International Commercial Arbitration 1985, with amendments 2006, UN Doc A/40/17, Annex I; UN Doc A/61/17, Annex I.
³ Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) 330 UNTS 3.
⁴ Arbitration Act 1996 (UK); Arbitration and Conciliation Act 1996 (India, amended 2015, 2019); International Arbitration Act (Singapore, Cap 143A, 2002 Rev Ed); Arbitration Ordinance (Hong Kong, Cap 609).
⁵ Michael Pryles, Dispute Resolution in Asia (3rd edn, Kluwer Law International 2016).
⁶ Draft Arbitration Act 2024, s 32.
⁷ Arbitration and Conciliation (Amendment) Act 2015 (India); Arbitration and Conciliation (Amendment) Act 2019 (India).
⁸ ICC Arbitration Rules 2021; LCIA Arbitration Rules 2020; SIAC Arbitration Rules 2016.
⁹ ONGC v Saw Pipes Ltd (2003) 5 SCC 705 (India).
¹⁰ Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd [1999] QB 740 (CA).
¹¹ Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, [2006] 1 AC 221.
¹² Renusagar Power Co Ltd v General Electric Co 1994 Supp (1) SCC 644 (India).
¹³ ONGC v Saw Pipes Ltd (2003) 5 SCC 705 (India).
¹⁴ ONGC v Western Geco International Ltd (2014) 9 SCC 263 (India).
¹⁵ Associate Builders v Delhi Development Authority (2015) 3 SCC 49 (India).
¹⁶ Nigel Blackaby and others, Redfern and Hunter on International Arbitration (7th edn, OUP 2021); Gary B Born, International Commercial Arbitration (3rd edn, Kluwer Law International 2021).

1. ongoing Mediation Bill reforms.

Proposed Amendments to the Draft Arbitration Act, 2024

Section 12A (New) – Restriction on Judges as Arbitrators

Existing Draft: No equivalent provision.
Proposed Amendment:

No serving Judge of the Supreme Court, Federal Shariat Court, or any High Court shall act as an arbitrator. Retired Judges may act subject to disclosure. Any agreement appointing a serving Judge shall be void to that extent.

Justification:
This aligns with the UK Arbitration Act 1996¹, India’s Arbitration and Conciliation Act 1996 (as amended 2015, 2019)², Singapore International Arbitration Act³, and Hong Kong Arbitration Ordinance⁴, which bar sitting judges from serving as arbitrators.

Section 2(d) – Definition of Arbitral Institution

Existing Draft: “‘Arbitral institution’ means a permanent organization with its own arbitration rules, duly notified by the Ministry of Law and Justice.”
Proposed Amendment:

“‘Arbitral institution’ means a permanent organization duly notified by the Ministry of Law and Justice, maintaining its own rules, a panel of arbitrators, and a prescribed schedule of fees.”

Justification:
Strong institutional frameworks such as SIAC, LCIA, and ICC regulate arbitrations by providing accredited panels and fee schedules.⁵

Section 7A (New) – Establishment of Pakistan Arbitration Council (PAC)

Existing Draft: No equivalent provision.
Proposed Amendment:

Establish a Pakistan Arbitration Council (PAC) to accredit arbitral institutions, maintain a roster of arbitrators, and issue codes of ethics and fee guidelines.

Justification:
Comparable to MCIA (India) and SIAC (Singapore), which lend credibility and attract foreign investment.⁶

Section 39(3) – Public Policy Exception

Existing Draft: Broad reference to fraud, natural justice, morality, justice.
Proposed Amendment:

Narrow to fraud, corruption, material breach of natural justice, or conflict with fundamental principles of morality and justice. Explicitly bar merits review.

Justification:
India’s misuse of the public policy exception in ONGC v Saw Pipes⁷ was later narrowed by the 2015 and 2019 Amendments⁸. The UK approach restricts public policy to illegality, fraud, or corruption.⁹

Section 32 – Timelines for Awards

Existing Draft: 18 months for domestic arbitration; no limit for international arbitration.
Proposed Amendment:

International commercial arbitrations seated in Pakistan should endeavour to conclude within 24 months (extendable by agreement or court order).

Justification:
India imposes strict 12–18 month limits even for complex matters,⁸ while UNCITRAL leaves flexibility. Pakistan should adopt a balanced approach.

Section 13(15) – Tribunal Fees

Existing Draft: High Courts regulate arbitral fees.
Proposed Amendment:

High Courts regulate fees only for ad hoc arbitrations. Institutional arbitrations follow the institution’s fee schedule.

Justification:
In global practice, institutions (e.g. ICC, LCIA, SIAC) issue transparent fee schedules without court control.¹⁰

Section 33 – Med-Arb / Arb-Med Procedures

Existing Draft: Tribunal may encourage settlement and record agreed award.

Proposed Amendment:

Tribunal may adopt Med-Arb or Arb-Med with party consent; settlements to have the same status as arbitral awards.

Justification:
Hybrid ADR models are encouraged internationally to reduce costs and delays.¹¹

References:

¹ Arbitration Act 1996 (UK).
² Arbitration and Conciliation Act 1996 (India), as amended by the Arbitration and Conciliation (Amendment) Acts 2015 and 2019.
³ International Arbitration Act (Singapore, Cap 143A, 2002 Rev Ed).
⁴ Arbitration Ordinance (Hong Kong, Cap 609).
⁵ ICC Arbitration Rules 2021; LCIA Arbitration Rules 2020; SIAC Arbitration Rules 2016.
⁶ Michael Pryles, Dispute Resolution in Asia (3rd edn, Kluwer Law International 2016).
⁷ ONGC v Saw Pipes Ltd (2003) 5 SCC 705 (India).
⁸ Arbitration and Conciliation (Amendment) Acts 2015 and 2019 (India).
⁹ Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd [1999] QB 740 (CA).
¹⁰ Nigel Blackaby and others, Redfern and Hunter on International Arbitration (7th edn, OUP 2021).
¹¹ Gary B Born, International Commercial Arbitration (3rd edn, Kluwer Law International 2021).

Draft: Proposed Amendments to the Draft Arbitration Act, 2024

Comparison of existing draft provisions and proposed amendments, with justifications supported by comparative international standards.

Section	Existing Draft	Proposed Amendment	Justification (with OSCOLA footnotes)
Section 12A (New) – Restriction on Judges as Arbitrators	No equivalent provision.	No serving Judge of the Supreme Court, Federal Shariat Court, or any High Court shall act as an arbitrator. Retired Judges may act subject to disclosure. Any agreement appointing a serving Judge shall be void to that extent.	Aligns with UK Arbitration Act 1996¹, India’s Arbitration and Conciliation Act 1996 (amended 2015, 2019)², Singapore International Arbitration Act³, and Hong Kong Arbitration Ordinance⁴.
Section 2(d) – Definition of Arbitral Institution	‘Arbitral institution’ means a permanent organization with its own arbitration rules, duly notified by the Ministry of Law and Justice.	‘Arbitral institution’ means a permanent organization duly notified by the Ministry of Law and Justice, maintaining its own rules, a panel of arbitrators, and a prescribed schedule of fees.	Follows practice of SIAC, LCIA, ICC which provide accredited panels and fee schedules⁵.
Section 7A (New) – Establishment of Pakistan Arbitration Council	No equivalent provision.	Establish Pakistan Arbitration Council (PAC) to accredit arbitral institutions, maintain a roster of arbitrators, and issue codes of ethics and fee guidelines.	Comparable to MCIA (India) and SIAC (Singapore) which lend credibility and attract foreign investment⁶.
Section 39(3) – Public Policy Exception	Broad reference to fraud, natural justice, morality, justice.	Narrowed: Only fraud, corruption, material breach of natural justice, or conflict with fundamental principles of morality and justice. Explicitly bars merits review.	Corrects misuse seen in India (*ONGC v Saw Pipes*⁷) later narrowed by 2015 and 2019 Amendments⁸. UK applies narrow fraud/corruption standard⁹.
Section 32 – Timelines for Awards	Domestic arbitration: 18 months (extendable). International arbitrations exempt from timelines.	International commercial arbitrations seated in Pakistan should endeavour to conclude within 24 months (extendable by agreement or court order).	India imposes 12–18 month limits even for complex matters⁸; UNCITRAL leaves flexibility.
Section 13(15) – Tribunal Fees	Each High Court shall frame regulations for determination of fees of arbitral tribunals.	High Courts regulate fees only for ad hoc arbitrations. Institutional arbitration fees governed by institution’s schedule.	International practice: ICC, LCIA, SIAC regulate fees transparently without court control¹⁰.
Section 33 – Med-Arb / Arb-Med Procedures	Tribunal may encourage settlement and record award on agreed terms.	Tribunal may adopt Med-Arb or Arb-Med with party consent; settlements to have same status as arbitral awards.	Hybrid ADR models are encouraged internationally to reduce costs and delays¹¹.

References:

¹ Arbitration Act 1996 (UK).

² Arbitration and Conciliation Act 1996 (India), as amended by the Arbitration and Conciliation (Amendment) Acts 2015 and 2019.

³ International Arbitration Act (Singapore, Cap 143A, 2002 Rev Ed).

⁴ Arbitration Ordinance (Hong Kong, Cap 609).

⁵ ICC Arbitration Rules 2021; LCIA Arbitration Rules 2020; SIAC Arbitration Rules 2016.

⁶ Michael Pryles, *Dispute Resolution in Asia* (3rd edn, Kluwer Law International 2016).

⁷ *ONGC v Saw Pipes Ltd* (2003) 5 SCC 705 (India).

⁸ Arbitration and Conciliation (Amendment) Acts 2015 and 2019 (India).

⁹ *Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd* [1999] QB 740 (CA).

¹⁰ Nigel Blackaby and others, *Redfern and Hunter on International Arbitration* (7th edn, OUP 2021).

¹¹ Gary B Born, *International Commercial Arbitration* (3rd edn, Kluwer Law International 2021).

Primary Legislation (Pakistan)

• Arbitration Act 1940 (Pakistan).
• Arbitration (International Investment Disputes) Act 2011 (Pakistan).
• Draft Arbitration Act 2024 (Law and Justice Commission of Pakistan, Revised Draft Bill).
• Code of Civil Procedure 1908 (Pakistan).
• Qanun-e-Shahadat Order 1984 (Pakistan).

International Instruments

• UNCITRAL Model Law on International Commercial Arbitration 1985, with amendments adopted in 2006, UN Doc A/40/17, Annex I and UN Doc A/61/17, Annex I.
• Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) 330 UNTS 3.

Comparative Legislation

• Arbitration and Conciliation Act 1996 (India), as amended by the Arbitration and Conciliation (Amendment) Acts 2015 and 2019 (India).
• Arbitration Act 1996 (UK).
• International Arbitration Act (Cap 143A, 2002 Rev Ed) (Singapore).
• Arbitration Ordinance (Cap 609) (Hong Kong).

Comparative Case Law

• ONGC v Saw Pipes Ltd (2003) 5 SCC 705 (India) (broad interpretation of public policy).
• ONGC v Western Geco International Ltd (2014) 9 SCC 263 (India) (expanded ‘public policy’).
• Associate Builders v DDA (2015) 3 SCC 49 (India) (narrowed public policy).
• Renusagar Power Co Ltd v General Electric Co 1994 Supp (1) SCC 644 (India) (classic interpretation of public policy).
• Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd [1999] QB 740 (UK CA).
• Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, [2006] 1 AC 221 (UK HL).
• TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia [2013] FCAFC 83 (Australia) (public policy).

Secondary Sources

• Nigel Blackaby and others, Redfern and Hunter on International Arbitration (7th edn, OUP 2021).
• Gary B Born, International Commercial Arbitration (3rd edn, Kluwer Law International 2021).
• Mustill and Boyd, Commercial Arbitration (2nd edn, LexisNexis 2020).
• Michael Pryles, Dispute Resolution in Asia (3rd edn, Kluwer Law International 2016).
• Lawrence Boo, Halsbury’s Laws of Singapore, Arbitration (LexisNexis 2020).
• Sundra Rajoo, Law, Practice and Procedure of Arbitration in India (LexisNexis 2021).

Conclusion

The Draft Arbitration Act, 2024 marks a historic step toward modernizing Pakistan’s dispute resolution framework. By aligning with the UNCITRAL Model Law, strengthening party autonomy, and ensuring the enforceability of arbitral awards, it positions Pakistan to become a credible jurisdiction for both domestic and international arbitration.

However, critical gaps remain. The failure to bar sitting judges from arbitral appointments risks eroding judicial neutrality and efficiency. The lack of a strong institutional framework undermines the growth of arbitration as a reliable mechanism of justice. The broad “public policy” test threatens finality of awards, while exemption of international arbitration from time limits could deter foreign investors.

Addressing these weaknesses through explicit legislative reforms—such as prohibiting judges from acting as arbitrators, establishing the Pakistan Arbitration Council, narrowing public policy grounds, and encouraging hybrid dispute resolution mechanisms—will elevate Pakistan’s arbitration regime to international standards.

Only through such reforms can Pakistan truly provide an efficient, impartial, and investor-friendly arbitration environment, thereby enhancing the credibility of its legal system and contributing to economic growth.