Importance of international arbitration

As a first step, CIICA aims to build capacity among govt officials and the legal and business communities in Pakistan

Rana Sajjad Ahmad May 25, 2015
The writer is the founder and president of the Center for International Investment and Commercial Arbitration

In the past few years, Pakistan has been involved in international arbitral proceedings in connection with a couple of important international commercial and investment disputes including the Reko Diq and the Rental Power Plants (RPP) cases. One striking aspect of the discussions and analyses of these proceedings has been the glaring lack of even elementary knowledge of the substantive and procedural issues related to international arbitration. In view of the high stakes involved in these proceedings, it is imperative to have an institutional mechanism in Pakistan to build capacity and raise awareness about the importance of international arbitration. In furtherance of this goal, the idea of having such a mechanism was brought to fruition last month at the formal inauguration of the Lahore-based Center for International Investment and Commercial Arbitration (CIICA).

Besides highlighting CIICA’s vision and objectives, the inaugural event provided a forum for understanding international commercial and investment arbitration in general and with respect to Pakistan in particular. The diverse pool of speakers and attendees had representation from all important stakeholders including representatives of the legal and business communities as well as the government. So why do we need such a center and how is international arbitration important for Pakistan?

International arbitration is a rapidly growing area of law and is increasingly being adopted around the world by states and international businesses as a method for resolving international commercial and investment disputes. Pakistan itself is a signatory to important international arbitration conventions and has also entered into several bilateral trade and investment agreements that stipulate dispute resolution clauses, arbitration being one of the dispute resolution methods. By signing these trade and investment agreements, Pakistan has and will be obligated to resolve any disputes in connection with these agreements in accordance with the dispute resolution clauses. Furthermore, by enacting some relevant international arbitration conventions including the New York Convention on the enforcement of foreign arbitral awards and making them part of our national law, Pakistani courts are required to enforce foreign arbitral awards pursuant to these laws. Therefore, it is imperative for Pakistanis to be equipped with the requisite knowledge and expertise to understand the implications of signing these international trade and investment agreements which contain these dispute resolution clauses. It is also important for Pakistanis to be acquainted with the procedural and substantive issues involved in international arbitral proceedings and the enforcement of foreign arbitral awards.

This is where the CIICA will play a critical role. As a first step, CIICA aims to build capacity among government officials and the legal and business communities in Pakistan. One significant upshot of this capacity building is that it will bolster Pakistan’s reputation in the international community as a country that understands its rights and obligations under international conventions as well as bilateral and multilateral trade and investment agreements.

The CIICA will also be undertaking research on and analysis of relevant issues in international arbitration, including any issues related to Pakistan as well as important regional and global issues. The goal would be to keep relevant government agencies and private sector entities updated on important developments and evolving issues in international arbitration. Acquaintance with these developments would be critical in developing an understanding of Pakistan’s international treaty and contractual obligations and how to effectively manage them.

The CIICA will also offer legislative advice to the government on Pakistan’s legal regime governing international arbitration. It will also be providing institutional arbitration services. A panel of highly regarded and experienced local and foreign arbitrators for this purpose will be set up and the arbitral proceedings will be administered pursuant to the CIICA’s arbitration rules. The body’s goal is to administer dispute resolution proceedings in the same manner that any of the leading international arbitration institutions would administer them. For Pakistani businesses, it will be a viable and cost-efficient alternative to having disputes arbitrated before a tribunal abroad. For foreign businesses, it will offer the option of having disputes arbitrated within Pakistan. This will strengthen investor confidence in Pakistan which would also have a positive impact on our economy.

The CIICA is an ambitious undertaking but an important one. In terms of ambition, it has an international outlook and its goal is to be involved not just in Pakistan-specific work but to be at the forefront of important international arbitration developments and be recognised as a credible and reputable center, both regionally and globally. 

Published in The Express Tribune, May 26th, 2015.

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