"ARBITRATION - PAKISTANfreedom to file the suit in the court for the stay of legal proceeding in pursuant to theprovisions under article II of NY convention. Arbitration agreement has been defined underthis act as an agreement in writing agreed between the parties to resolve all or any of theirdisputes through the process of arbitration, additionally the article also stated that writtenagreement would include a clause of arbitration agreement in the contract or agreementsigned by the parties or mentioned in either of the letters or telegrams that have been77 exchanged between the parties. Enforcement of Foreign Arbitration Award:The concept of foreign arbitration award has been explained under section 2(e) of REFA as,an award made in the contracting state [NY Convention] as it is being notified in the FederalGovernment official Gazette, this definition specified that for every foreign award declaredunder REFA to be enacted in Pakistan it has to fulfill the two main conditions namely:(1) Should be made only in those states that have signed the NY convention,(2) Such contracting states have to notified by GOP,These conditions raised similar concerns in enforcement of the award as in APC. Thus, it canbe presumed that even though Pakistan is one of the contracting parties to the NY conventionit is very essential to acquire a notification from the GOP for enforcing the foreign award.This shifts the position of the award from foreign to domestic award, because as per theprovisions of section 9 of APC, an award that is rendered in the contracting state can still bedetermined as a domestic award in Pakistan if the governing law of the contract is Pakistan78 law, this approach has been contradicted by certain commentators stating that the provisionsof REFA are applicable to the award rendered under the contracting state even if the77NY Convention Article II (2)78Hitachi v. Rupali Polyester (1998SCMR 1618) Page 41 ARBITRATION - PAKISTANgoverning law is from Pakistan as REFA does not have equal provisions such as section 9 ofAPC. On the contrary section 6 of REFA enhances the position of the court stating that theforeign arbitral award is to be recognized in the similar way as the judgment or order given in79 the court of Pakistan. Additionally, it states that the effect of the award is such that it is80 binding on the state. Section 7 of REFA discusses the circumstances where the recognition and enforcement of theforeign award can be set aside in accordance to article V of the NY convention such as:? Absence of valid arbitration agreement,? Lack of fair opportunity to be heard during the proceedings,? The non-severable part or award exceeded the submission to the arbitration,? Award that is not binding on the parties and that is made through incompletecomposition of the tribunal,? The subject matters of the award are not arbitral,? The enforcement of the award is against public policy of the state,Section 8 of REFA states that in case of the inconsistency between the REFA act and NY81 Convention the convention will be given the priority. Thus, from the above discussion it canbe concluded that REFA has certainly brought conviction in the enforcement of the foreignarbitration agreement and award in Pakistan.In addition, to REFA the other provisions that dealt with the enforcement of the foreignarbitral award are the introductions of the Arbitration Bill (the Bill) in the year 2009 forimplementing the UNCITRAL Model Law in Pakistan and the AIDA in the year 2011 forimplementing and making certain conventions of ICSID as law in Pakistan in the stream of79Same as note 1380REFA Section 6 (2)81Section 8 Inconsistency – In the event of any inconsistency between this Act, any other law, or any judgment of any Court and theConvention, the Convention shall prevail to the extent of the inconsistency Page 42 ARBITRATION - PAKISTANinternational investments. Even though the bill had been introduced to imbibe the provisionsof the UNCITRAL Model Law it in-fact modified version of the Indian Arbitration Act of1996. This implementation of GOP is considered as a positive step to enhance theinternational arbitration in Pakistan. The Bill had been introduced with the intention that itwould supersede the provisions of the REFA and REAO ordinance which implemented theNY convention into the Pakistan laws and also the AIDA that aimed at making ICSID as alaw in Pakistan. It is considered as a holistic piece of legislation that would include the use ofADR mechanisms, arbitration and conciliation in Pakistan. Additionally, it also proposed for82 establishment of an arbitration and conciliation center in Pakistan.The REAO ordinance was propagated in the year 2005to replace APC for enforcing theforeign award in Pakistan. The principle benefit of enforcing this ordinance had been toenhance the global profile of Pakistan in international investments which was something thathad been tarnished due to the debacles with the major investment giants such as Soci´et´e83 84 85 G´en´erale de Surveillance, National Power and Siemens Westinghouse. The significantbenefits of implementing this ordinance have been the compliance of the NY convention and86 enforcement of arbitral agreement and arbitral award.Under the general scheme of the AIDA convention it can be observed that it excluded the87 implementation of AA especially to the proceedings conducted under AIDA. Theprovisions under this act have been made specifically in pursuant to the Articles underICSID, such as in accordance with article 49 of ICSID the AIDA proclaims that the date ofaward is the date on which the certified copied of the award have been dispatched to the82Same as note 13, para 2 & 383Soci´et´e G´en´erale de Surveillance S.A. v Pakistan (2002 SCMR 1694); http://www.worldbank.org/icsid/cases/SGS-decision.pdf 84“HUBCO v WAPDA: Pakistani Top Court Rejects Modern Arbitration” (2000) 11 American Review of InternationalArbitration 38585In Wak Orient Power and Light Ltd v Westinghouse Electric Corp (2002 SCMR 1954)86The second recital to the REAO: “And whereas it is expedient to provide for the recognition and enforcement of arbitration agreementsand foreign arbitral awards pursuant to the said Convention and for matters connected therewith.”87AIDA Section 7 Page 43 ARBITRATION - PAKISTAN88 arbitrating parties. The certain provisions relating to the enforcement of such award underAIDA are:? Section 2 defines award in pursuant to the provisions under the ICSID conventionwhich is inclusive of the fact that any decision of interpreting , reversing or annullingthe award, additionally the cost of the award,? Section 3 explains about the registration of award in pursuant to Article 49 of ICSID,Registration of award gives the parties the right to register their award in the High Court, andthus decision registered in such court is considered to be final, but the loophole here is that inpursuant Article 53 of ICSID any award registered with the court by the contracting states isconsidered as if it were the final judgment in the state [Emphasis added], but AIDA missesthe word „final? under its provisions in section 4 due to which there are chances ofchallenging the decision of High Court in Supreme Court as it is the apex court in Pakistan.In addition this loophole is also substantiated by the absence of the correspondent provisionof Section 9 in AIDA due to which the NY convention has the ability to override the89 provisions of REFA if these to statues are incompatible.After discussing the impact of NY convention in Pakistan we further discuss in brief differentcase studies reflecting the impact of convention in Pakistan. II.IV CASE STUDY The current section would be discussing case laws based on the above given provisions underREFA and AIDA in pursuance to NY and ICSID Convention. Being one the signatories ofthe NY convention it is mandate that the court of Pakistan is obliged to enforce the foreign88AIDA section 3(1)89 Same as note 17, p. no. 44 & 45 Page 44 ARBITRATION - PAKISTANaward under this convention. The trend to enforce foreign award is moderate based on theratio of enforcement.We begin the discussion with the Metropolitan Steel Case, which has been decided in linewith the provisions of Article II (2) of NY Convention. As per the facts of the case it can beobserved that the current case has been decided by SHC in preview with a case where one ofthe parties to the contract contended that the said difference did not fall under the provisionsof the arbitration agreement and that the dispute cannot be resolved through arbitration. But,SHC observed that as per the provisions of REFA ordinance, the said difference does fallunder the provisions of the arbitration clause and it has to be resolved through the mechanismof arbitration. This judgment implied that the courts in Pakistan will also consider the90 severability of the provisions under the main agreement of arbitration.The other important cases in this stream are the Hasan Ali and Lithuanium Airline Cases,where SHC clarifies that it is mandatory rule to refer disputes to arbitration as per theprovisions under Article (II) (3) which states that any party to the agreement can refer theirdisputes to arbitration by making an application to the court and unless the court feels that theagreement is null and void it has to refer the case to arbitration. Additional emphasis is madeto this article by section 4(2) of REFA which repeats this provision and includes the word91 „shall? such that the court must refer the dispute to arbitration on mandatory basis.In addition to the above cases the other case laws that explain the circumstances when theforeign agreement and award have been implemented under REFA in pursuance to theprovisions of NY convention are the Far Eastern Impex Case where the court?s has beendeprived of its discretionary power in implementing the arbitration agreement even in cases90 Metropolitan Steel Corporation Ltd. v. Macsteel International U.K. Ltd (2006 PLD Karachi 664)91Messrs Hasan Ali Rice Export Co. v. Flame Maritime Ltdand another (2004 CLD Karachi 334), para (c); Lithuanian Airlines v. BhojaAirlines (2004 CLC Karachi 544) Page 45 "