Copyright pakobserver
THE modern global economy is no longer an endless search for cheap labour or attractive tax incentives, but investors are continuously in the search for certainty. Certainty is a key component for sustainability and it comes from one place: a legal system that investors can trust. For Pakistan, which is struggling to attract sustainable investment, the path to economic revival runs through its courts. Having a stable, predictable and efficient judicial system is an imperative need for any thriving business environment. Although the judiciary in Pakistan is constitutionally independent, it is known for its lack of resources, slow-pace and often unpredictable outcomes in commercial matters. According to the World Bank’s Ease of Doing Business Index, Pakistan ranks 108th globally as of 2020 for “Enforcing Contracts”. Whilst this is a jump from its previous ranking of 147th, this ranking is still far too bleak for businesses that end up in years of litigation over simple contractual disputes, which is a luxury that few can afford to partake in. With over two million cases pending across various courts in Pakistan, commercial disputes are more often than not lost in the shuffle of criminal, family and civil cases, whereas a contractual dispute that should logically be resolved in a matter of a few months ends up dragging on for years. To add to the delays, judges are also rotated frequently, despite a few possessing the specialized expertise needed to handle complex financial or corporate matters. The result of this array of problems is dire uncertainty and in the world of business, uncertainty costs money. Investors see time as capital and if a country’s legal system is not able to enforce contracts or protect investments swiftly, businesses are quick to move elsewhere. Multinational corporations compare legal frameworks before they commit capital, preferring jurisdictions where commercial laws are clear, disputes are resolved efficiently and judgments are actually enforced. In contrast, Pakistan’s legal system often deters serious investors and even domestic businesses are often forced to rely on influence, connections, or out of court settlements to resolve disputes. It’s important to understand that this isn’t simply a legal issue, but rather it is an economic one. Every delayed judgment, every uncertain contract and every unenforced arbitral award slowly chips away at investor confidence and the state loses not only revenue but also the chance to build a culture of rule-based economic growth. It isn’t necessary for Pakistan to reinvent the wheel, in fact, countries around the world have modernized their judicial systems to meet evolving business needs. The Singapore International Commercial Court (SICC) is known for a diverse set of judges, flexible rules and judgments that are internationally respected. Similarly, the Dubai International Financial Centre (DIFC) Courts operate under common law principles and provide bilingual judgments that have made the UAE a regional hub for dispute resolution. Even in India, the Commercial Courts Act, 2015, has established specialized courts with strict timelines for business disputes. In such a state of affairs, it is only logical that Pakistan prioritizes the establishment of specialized commercial courts in every province and equip the judges of these courts with adequate training in corporate and commercial law supported by digital case management systems that can track progress and ensure accountability. Furthermore, it is pertinent to remember that a judgment or award is only as good its enforceability and by prioritizing swift and transparent enforcement, Pakistan can give the kickstart needed to ensure investor confidence and affirm its commitment to providing certainty in its legal system. Lastly, judicial reform should be a joint venture between the state and the private sector. Chambers of commerce, law firms and the judiciary can collaborate to design practical and credible commercial forums that reflect global best practices. Article 37(d) of Pakistan’s Constitution promises citizens “inexpensive and expeditious justice.” Yet, for commercial litigants, justice remains anything but expeditious. Reforming judicial forums isn’t just about fulfilling a constitutional duty; it’s about adopting an economic strategy for national growth. If Pakistan truly wants to position itself as an investment-friendly destination, it must show that it can protect investments, enforce contracts and resolve disputes fairly and swiftly. Investors demand predictability, not perfection. A modern economy needs a modern judiciary, one that understands commerce, technology and global standards. The world will only do business with Pakistan when Pakistan proves it can deliver justice for business. —The writer is contributing columnist.
