The Sindh High Court recently dismissed comprehensive objections filed by National Telecommunication Corporation (NTC) challenging an arbitral award given in favor of our client Zahra Communications (Private) Limited. Mr. Justice (Retd.) Nasir Aslam Zahid had authored the award. The decision establishes an important precedent for the enforcement of awards in telecoms arbitration in Pakistan against state owned entities.
The dispute arose from a 2002 agreement between the parties. This contract encompassed prepaid calling card services, pay phone services and international gateway exchanges. Both parties claimed that the other was in breach of the agreement and claimed damages. The arbitrator allowed many of the claims filed by Zahra Communications while rejecting the claims made by NTC. The eventual award gave damages with interest to Zahra Communications.
NTC mounted a comprehensive challenge under Sections 30 and 33 of the Arbitration Act, 1940 (the Act). First, NTC alleged that the arbitrator had exceeded his jurisdiction. Secondly, that he committed misconduct by awarding damages without sufficient evidentiary foundation. Finally, the state entity contended that the arbitrator had substituted his commercial judgment for proper legal analysis.
Our dispute resolution team developed a defense that addressed both the procedural integrity of the arbitration and the substantive merit of the award. We demonstrated that the arbitrator had carefully evaluated thirteen distinct claims totaling hundreds of millions of rupees. Yet he awarded only five claims after rigorous analysis. This evidenced judicial restraint rather than overreach.
Further, on the misconduct allegations, we demonstrated that the arbitrator’s assessment of damages followed established legal principles. We invoked the Supreme Court’s jurisprudence to establish that courts cannot interfere with an arbitrator’s findings merely because they might have reached different conclusions on the evidence.
Mr. Justice Arbab Ali Hakro’s judgment endorsed our position. The Court emphasised that “the jurisdiction of the Court under the Act is supervisory in nature.” Moreover, the judgment confirmed that arbitration awards constitute final determinations entitled to minimal judicial interference. The Court found that the arbitrator had properly exercised his mandate in interpreting the agreement’s scope, determining which services fell within the parties’ contractual relationship, and assessing damages based on the evidence presented.
The judgment provides crucial guidance on the telecoms arbitration in Pakistan, involving complex technical arrangements require expert determination. The Court’s analysis reinforced that arbitrators’ factual findings and contractual interpretations are entitled to deference in the absence of clear jurisdictional excess or procedural impropriety.
Following the dismissal, NTC filed a High Court Appeal before the Sindh High Court. This was dismissed in limine by a Division Bench comprising Mr. Justice Shafi Siddiqui, the then Chief Justice and Mr. Justice Jawad Akbar Sarwana. In the meantime, we moved swiftly into execution proceedings. Within months, we successfully secured recovery for our client, transforming the arbitral award from a legal victory into tangible commercial value.
“This judgment demonstrates that even state entities cannot escape carefully arbitrated commercial obligations through expansive interpretations of misconduct or jurisdictional challenges,” said Shahbakht Pirzada, Partner in our Karachi dispute resolution practice who argued the case. “More importantly, our successful execution proceedings show that arbitral awards can be effectively enforced in Pakistan, providing real commercial remedies to successful parties.”
Our team handling this matter was led by Shahbakht Pirzada (Partner – Pakistan).
For strategic advice on arbitration and enforcement proceedings in complex telecommunications disputes, contact Shahbakht Pirzada today.
This article is not legal advice; it provides information of general interest about current legal issues.
…
RIAA Barker Gillette is Pakistan’s premier law firm, with an on-the-ground presence in three major cities in Pakistan: Karachi, Islamabad and Lahore, and affiliated offices in Dubai (DIFC) and London.
The firm practices in all areas of corporate, commercial and dispute resolution law. Leading international legal directories consistently recognize the firm as a top-tier law firm in Pakistan.
RIAA Barker Gillette is the exclusive member firm in Pakistan for Lex Mundi, the world’s leading network of independent law firms with in-depth experience in over 125 countries worldwide.
