The Supreme Court has underscored the significant economic benefits of arbitration as a cost-effective, efficient and confidential means of resolving disputes.
"Arbitration alleviates the burden on national courts, enhances business productivity and provides a faster resolution process, thereby minimising disruptions to businesses," said a judgement penned by SC senior puisne judge Syed Mansoor Ali Shah.
Justice Shah was leading a three-member bench also including Justice Irfan Saadat Khan and Justice Aqeel Ahmed Abbasi that heard a case related to enforcing an arbitration agreement.
According to the verdict, the ability to enforce international arbitration awards strengthens trade and commerce, while arbitration's stable and predictable dispute resolution mechanism promotes investor confidence, making the country an attractive destination for foreign investment.
"These factors collectively foster a favourable business environment, drive economic growth and enhance the country's competitiveness on the global stage."
The court noted that a draft bill for a new arbitration act, prepared by the Law and Justice Commission of Pakistan, was submitted to the federal government through the Ministry of Law on May 2, 2024.
It said this draft bill aims to modernise the outdated arbitral dispute resolution framework, which has remained largely unchanged since 1940.
"We are optimistic that the federal government will prioritise the larger economic interest of the nation and ensure the swift enactment of fresh arbitral legislation to provide an effective and contemporary dispute resolution mechanism for the people.
"The office is directed to dispatch a copy of this judgment to the Attorney General for Pakistan for onward correspondence and as a reminder to the concerned ministry," it added.
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