Pakistan

Pakistan loses sovereign immunity over Nizam of Hyderabad's wealth

It was in 1957 when Pakistan invoked its right to sovereign immunity from any court proceedings in Britain

Web Desk March 19, 2015

It was in 1957 when Pakistan invoked its right to sovereign immunity from any court proceedings in Britain. PHOTO: REUTERS

NEW DELHI: Pakistan no longer has sovereign immunity over the State of Hyderabad's wealth, High Court of Justice in London ruled, as the riveting 67-year-old India-Pakistan Hyderabad Funds saga took another turn.

In 1957, Pakistan invoked its right to sovereign immunity from any court proceedings in Britain regarding the issue. As the legal route to recovering funds became blocked, India dealt with Pakistan bilaterally.

The funds refer to the £1,007,940 and 9 shillings which were transferred from the former State of Hyderabad's bank account in National Westminster Bank in London, to an account in the same bank; of the then Pakistan high commissioner to UK in 1948.

Occurring just two days after Nizam acceded to India, it made him one of the three claimants -Pakistan and India being the other two- to the money which is currently valued at £35 million.

According to the recent High Court of Justice ruling, Pakistan lost its sovereign immunity when it voluntarily decided to file a legal claim in 2013, against the National Westminster Bank seeking full recovery of all monies exclusively for itself.

Through the proceedings, it was learnt that initiating proceedings itself amounted to voluntarily giving up its right to immunity and submitting to the Court's jurisdiction. Therefore, in November 2013, days before the first hearing on its case, the government decided to discontinue the proceedings it had itself initiated.

Pakistan no longer benefits from its state immunity over the funds, which gives India the chance to seek recovery of the inheritance through the legal route. Indian government officials have said the funds were not private monies of the Nizam but monies which were referred to as State monies.

The transfer to the account of the Pakistan High Commissioner took place on the instructions of the Nizam's finance minister who may have been an authorised signatory to the account, but he did it without the consent of the Nizam's Government as the Nizam himself later confirmed.

The finance minister of the Nizam's government had no power to withdraw this money without the express sanction of the Nizam or the state government, making the instructions irregular.

The Nizam's subsequent instructions to retransfer the funds were not complied with,'' the government had said in a statement earlier.

This article originally appeared on The Times of India

COMMENTS (9)

John B | 9 years ago | Reply This is a long standing legal dispute following partition of india and it is a matter of principle rather than money. State of Hyderabad money was transferred to PAK account by hyderabad state finance minister without the approval of the prince. The only logic here is that Hyderabad was a Muslim majority state and hence the money belongs to PAK. The prince of Hyderabad claimed that it was his personal money whereas GoI claims that it is GoI money through the power of accession. The prince lost the case subsequently and now the duel is between PAK and GoI. Sovereign immunity is old world English law concept wherein states do not claim the coffer of another king and once invoked all disputes is now between the kings to be resolved. PAK by going before the English crown court and arguing before the lesser mortals of the court, lost its supreme privilege of King state.ie; lost it's sovereign immunity. Now all claims will be processed through English law. The money belongs to the people of the state of hyderabad, not to the prince. It was government account not private account. Through accession, legal ownership is now passed on to GoI and not to PAK under common law. There is no common law recourse to resolve Sovereign immunity without killing the other king and looting the money. Once sovereign immunity is foregone, the dispute now becomes like another property dispute. Sovereign immunity is honored even today under international law to monarchs but not to the states of republic. Welcome to 21st century! Kings and Queens still enjoy privileges.

FR | 9 years ago | Reply Being a lawyer, I can easily testify that some very important links in this tale have not been brought to the notice of the reader. Hence the confusion in this article. And seriously ET "This article originally appeared on The Times of India". We have now been reduced to reading articles written by Indians, which as we all know, naturally and understandably tend to portray their own version of events. This attribution to the Times of India should have been stated at the very outset!