“Time is Money” is a phrase well known to the business world. It first originated in an essay titled “Advice to Young Tradesman” by Benjamin Franklin in 1748. So, if time is not spent wisely and if time is wasted, then all the opportunities to make money are lost.
Well, I have both bad and good news to share in this article. As a personal choice I always prefer the bad news first before sharing the good news. Maybe because I always like a happy end to a story.
The bad news which almost anyone who has remotely dealt with our legal system is already aware, that our legal system is broken. For most businesses especially smaller ones, any litigation pertaining to enforcement of contracts is a doomsday scenario because the resolution in an ordinary civil court in Pakistan is going to take years if not generations. The agony is worse when financial interests are involved. Entrepreneurs cannot afford time-consuming litigation while the cash flow is disrupted. It is because of the lethargic legal process that most businesses are terrified to legally fight for their just rights and rightly so. Being a commercial lawyer for the past 15 years my standard advice to clients is: “Only file a case if you have no other option left”. Commercial contracts in Pakistan have become by and large unenforceable. If you have lent money or goods and the other person breaches the contract, you can just forget about getting it back or at least through the formal legal system in a span of time that is worth pursuing the excruciatingly slow legal process. Arbitration as an alternative has also failed as it does not free you from the dysfunctional system. One can go on and on about our legal system and the lack of meaningful reforms by successive governments but let’s hear the good news now.
The government of Punjab on 13th April 2021 promulgated a new law especially for businesses called the “Punjab Commercial Courts Ordinance, 2021”. This law is a brainchild of a committee headed by Justice Shahid Karim and Justice Jawad Hassan of the Honourable Lahore High Court. Both lordships understand the plight of the commercial world better than anyone in the country. The issue of commercial litigation being spearheaded by such leading and dynamic legal and judicial minds gives one a lot of hope for the future. The law could not have been drafted any better as it takes care of all the procedural and substantial issues arising in commercial litigation.
The main purpose of this law is expeditious disposal of claims arising from commercial transactions. As a result of the Ordinance, specialized commercial courts will be set up across Punjab which will exclusively deal with commercial disputes between companies, firms and individuals. The law mandates the commercial courts to decide all disputes within 180 days. The law specifically prohibits granting adjournments for more than seven days and where applicable necessary costs will also be imposed if a party is delaying the proceedings. After the filing of the case, the Defendant only has 30 days to file a reply in the shape of ‘leave to defend’ and only if he raises substantial questions of law and fact, the case will go in evidence otherwise the matter will be decided there and then on the basis of available record. The court will also have the power on its own motion to summon any record maintained by the public authorities. Also keeping in view the changing times, e-filing is also permitted for all submissions. These are all revolutionary steps in the quick dispensation of justice which will go a long way in regaining the trust of the business world in our judicial system.
Justice Jawad Hassan in a recent case concerning an international food chain has most aptly held that “it is the duty of the courts in Pakistan to see the rights of the parties and to protect their interest in order to build confidence of investors in Pakistan.” So the happy ending is that in the World Bank’s Report on Doing Business, for the first time, Pakistan has reached the 108th spot in overall ranking in Contract Enforcement Indicator, on which it was holding 156th position previously. So it not all gloom and doom. If the new law is implemented properly, it is going to accrue far-reaching benefits for the economy of Pakistan as whole.
(The writer is a commercial lawyer and partner at Kilam Law. He can be reached at [email protected])
Copyright Business Recorder, 2021