Evolution of Pakistan’s trade dispute resolution regime: Through the gloom, the silver linings we should see

There is a lot of gloom in Pakistan these days. In that miasma it is sometimes difficult to see and appreciate the work that many are doing, not only to keep Pakistan afloat, but to ensure it thrives when the dust settles. Today, I have the privilege of sharing such work with you. The work that we are doing to create Pakistan’s trade dispute resolution regime.

There is not time or paper enough to comment on why our dispute resolution system is not up to par. We will focus on the positive, on the solutions. I had the honour of engaging with the wonderful USAID IPA, run by Chemonics International, to lead the team building the infrastructure for a modern trade dispute resolution system in Pakistan.

As such things tend to be, I worked with the Ministry of Commerce, who asked us to provide support to the nascent Trade Dispute Resolution Organization, an excellent initiative by the Ministry; however, one that lingered due to a lack of substantive law behind it. The passing of the Trade Dispute Resolution Act, 2022, this summer by Parliament, has helped to cover that. Also following its enactment is where we came in.

Our work is the creation of the roadmap, and recommendations for the successful implementation of this Act, to achieve its objectives. For this we did two simultaneous activities. One was a review of the best international practices, for which we studied as much literature as possible to understand how the world had tackled such a problem. We studied the ICC, the UNCITRAL, and various other international bodies/organizations.

Alongside this international perspective, we needed local perspective as well; so we set out on a series of conversations with local stakeholders, primarily the private sector who would be using such a trade dispute resolution regime.

Thus, we held conversations with all the chambers of commerce, all the industry associations, all the export bodies, all the government organizations, and all other stakeholders that we could manage to tap into. The objective was to hear what they were currently doing when facing disputes with foreign traders, and what is the ideal they would like to see.

Once we had the local and international perspectives, we began the task of incorporating them into the roadmap while keeping in mind what the Act has envisioned.

The Act has created a new body called the Trade Dispute Resolution Commission, which, as with other commissions in Pakistan, has been empowered to implement the Act, as well as run the trade dispute resolution mechanism. This Commission will be a mix of public and private individuals specializing in business, trade and dispute resolution. Under this Commission will be the existing Trade Dispute Resolution Organization, which legally will act as the secretariat to the Commission, but practically will operate as an Alternative Dispute Resolution Center. It is vital that these bodies be trained and equipped to bring them into conformity with international expectations.

This Commission will receive complaints from parties aggrieved by trade disputes. This will include international and local bodies. Which is new for our legal system. One thing to keep in mind, with regards to trade disputes as opposed to any other dispute. In trade disputes there will never be two local parties. There will always be a local party and one foreign party. Thus, the entire procedure that we are familiar with needs to be revamped to facilitate international disputes and online case management.

It is about time, to be honest. All over the world, we are familiar with arbitration and mediation proceedings that happened purely through video conference, with no necessity of physical courts or chambers. Finally, we have the opportunity to teach Pakistan how to play in that league. An opportunity that we will not squander. Dispute resolution should not be as laborious as we have made it out to be.

The process that the Commission will follow has been simply laid down in the act. There will first be an attempt at amicable negotiations, assisted by the Commission. If that fails then the Commission will ask the parties to pick between three options.

Mediation, arbitration or Commission determination. This is new and it is excellent. Mediation and arbitration are being placed in the start, instead of at the backburner. Another thing we are happy to bring into this system from the world over is cost orders. The Commission can not only impose cost orders and penalties, but can recover them directly without needing any intervening body.

There are various other benefits to new system and various other recommendations that we, as part of the USAID IPA, have suggested to the Ministry of Commerce and the TDRO. There will be international trade desks in our embassies, TDRO affiliated ADR Centers, roster of mediators and arbitrators, and many other facets to this system. USAID IPA has been a wonderful supporter of this work, and they are doing more incredible things that I believe will incrementally raise Pakistan’s ability to market itself in the international sphere.

This sort of work is happening throughout Pakistan. Where there is doom, there also are people who are brick by brick laying the foundation on which Pakistan will stand and face the world.

Granted, it can feel hopeless at times. Pakistan was and is built on perseverance. We are a stubborn folk, and that should be taken as a compliment. Our stubbornness is why we are still here. And we will always be here. The world will keep spinning, and Pakistan will keep thriving. Maybe not for the same people.

But somehow there is always someone thriving in Pakistan. That is reason enough for this country to exist and thrive. So to all of us that are trying to leave, I get it. It’s nice out there. But this is home. Take ownership, thrive, and lets start cleaning it up. For ourselves, and our children.

Copyright Business Recorder, 2024