"ARBITRATION - PAKISTANof inconvenience, except when the agreement is null and void as per the provisions of section4(2) of REFA. The case ofTravel Automation also clarifies the same as stated in the abovecase; also it states that the provisions of section 34 AA are not applicable to the matters thatare governed by REFA.Thus, after a brief discussion on certain important case laws in relation to implementation ofthe foreign award as per the provisions of NY convention, the next chapter of dissertationexplains the different challenges or pitfalls in international arbitration in Pakistan and certainrecommendations made by scholars for improving the conditions of arbitration under thisconvention.CHAPTER III: CHALLENGES / PITFALLS AND RECOMMENDATIONSThe current section under dissertation explains the different challenges and pitfalls the GOPhas faced in implementing the NY Convention and the international arbitration. Also itexplains recommendations for overcoming these challenges to develop the position ofarbitration and enforcement of foreign award under the NY convention in Pakistan.III.I CHALLENGES / PITFALLSBeing one of the prime signatories of the NY convention to enhance its position ininternational arbitration Pakistan faces certain drawbacks which act as either challenges or aspitfalls in the legislations of Pakistan in enforcing the foreign arbitral award. Thesechallenges at a large scale have been endorsed from the position of Pakistan on aninternational arbitration frame but we would be discussing it from the enforcement of foreignaward under NY convention perspective. Below are certain areas where Pakistan has toimprove for implementing the foreign award in the nation and enhance its position globally:o Modernizing the concept of Lex Arbitri: Page 46 ARBITRATION - PAKISTANThe most important category of laws that play a vital role in the arbitration proceedingis from the initial stage of validity of the arbitration agreement till the substantialoutcome of the agreement. The procedure followed is very important because theprocedural law must be framed in a way that it would ensure uninterrupted course ofaction in arbitration, but the sad part is that the CPC that has been enforced inPakistan misses these core points which are very essential for development of modernarbitration laws such as confidentiality and privacy of arbitral proceedings, tribunalpowers to decide on jurisdiction, the tribunals lack of power to grant interimmeasures, etc. Lack of developed procedural code do effect the position of Pakistan ininternational arbitration globally, it may even reflect unfriendly image of the nationfor international jurisdiction and also confuse the courts by providing a wide range ofdiscretions while deciding on a case.Prominent flaws that have been observed in the existing arbitral law in Pakistan are:? Non-existence of the principle of competence-competence which givesthe arbitral tribunal the power to decide its jurisdiction and existence ofsuch powers prove to be a big step for achieving independence in thefactors of arbitration and should be incorporated into nation?sarbitration law.? Judicial intervention during the process of arbitration is one of thechallenges under the Pakistan law, because even though the arbitrationtribunal is given the power to grant interim measures on arguable basis,under many instances there has been more importance given to judicialintervention.? Lack of provisions against the independence and impartiality of thearbitrators irrespective of the fact that such challenges are made Page 47 ARBITRATION - PAKISTAN92 frequently in Pakistan. It is advisable that clear provisions onimpartiality and independence of arbitrate be included in the statutorylaws of the nation.? The tribunals lack of power to award interest to the parties over theprinciple amount. Even though under certain circumstances where thetribunal keeps the power to award interest it is only when there isspecification of the same in the contract. Also, the Act does notprovide any proper clarification regarding this concept, yet it has beenheld by courts that interim measures may not be provided undernumber of cases relating to arbitration.?The doctrine ofamiable compositeur or ex aequo et bono where eventhough the parties authorize the arbitrator to decide the award it isarguable whether the decision would constitute to be an award or as anexpert decision.o Arbitrational Institute establishment:There have been many efforts made by the GOP to establish an arbitration institute inPakistan as per the style and patterns of the London Court of InternationalArbitration, named as the Alternative Dispute Resolution Center (ADRC) in Lahore.But on a sad note this institute had to shut down due to the poor performance of the93 institution.Additional many other institutions of arbitration have been established in Pakistan toovercome the failure of ADRC such as the Chamber of Commerce and Industry ofKarachi that attracts over 3 cases a year on an average since its formation in the year1959. The rules governing this institute has been contained and attached to the bylaws92Pakistan Steel Mills Corporation v. Messers Mustafa Sons (Pvt.) Limited, PLD 2003 Supreme Court 30193Uzair Karamat Bhandari, Feisal Hussain Naqvi, Iftikharuddin Riaz, Ch. 20 Pakistan; Asia Arbitration Handbook, Michael J. Moser andJohn Choong (ed.), Oxford University Press, 2011 Page 48 ARBITRATION - PAKISTANand articles of association under association of chamber. The Federation of PakistanChambers of Commerce and Industry under the rules of commercial arbitrationtribunal such that it resolves disputes between the local parties, local parties andforeign parties, but even with latest rules printed in July 1964, still there is no increase94 in the number of cases dealt by these institutions.The reason behind this failure is the lack of provocative incentives by the nation toforeign parties to encourage them t resolve their commercial disputes through thisinstitution under the developed system for exercising their will and autonomy, alsothere is no record publically of inviting the International organizations such as ICC,95 ICDR for creating venues to international arbitration in the country.o Enforcing the foreign arbitral award:This concept of enforcing foreign award under the provisions of AA-APC relationshipand under the provisions of REAO ordinance REFA and AIDA acts have been clearlydiscussed under chapter 2 of the dissertation thus stating that the nation has madeprovisions for enhancing the position of international arbitration in Pakistan. But thereare certain loopholes in that enactment that have left it to the discretion of the court tomake decisions as per provisions and the circumstances of the agreement and case.Additionally, many authors in their research have observed that the lawyers in somecases of international arbitration have not been helpful nor have provided requiredassistance to the courts for resolving the disputes relating to international arbitration.The courts mainly give decisions in these cases based on the information availablebefore them but not by appointing amicus curiae where it would be helpful in seekingproper and clear brief on the international matters in these arbitration cases. But it isvery essential that the court inquisitively seek briefs about the laws relating to94Mahomed J. Jaffer with the assistance of Mr. Sarmad J. Osmany, National Report – Pakistan; The website of the Institution does notprovide any information about any subsequent version of rules. http://fpcci.org.pk/95Ibid Page 49 ARBITRATION - PAKISTANinternational arbitration before making decisions such that harmony is maintained inthe international arbitration process and the court should also pass the awards based96 on the international arbitration regime.o Providing training facilities to students and lawyers:One of the pitfalls of Pakistan law and the challenge faced by international arbitrationin the nation is the lack of proper training facility to lawyers and students in Pakistan.The lawyers and students do not have complete knowledge on the briefs of arbitrationprocess for resolving commercial disputes. There has been no additional efforts takenfor developing the arbitration process in the country and give opportunity to all thelawyers and students such that gain expertise in this subject. The authorities who haveto take the responsibility in this regard are being inattentive in this regard. This97 situation in Pakistan had been criticized by Gordan Jaynes in his journal stating thatthe International Development Law Organization (IDLO) which has been trying bestin offering an helping hand to GOP for developing the international arbitration for thepast 20 years and also around 60 lawyers are members of the IDLO?s alumni and theydid have the option to share their knowledge by training the students and lawyers inthe country with their knowledge. Additionally, this organization also provides distantlearning courses to all interested to seek arbitration knowledge. Queen?s university inLondon had also been offering these distant courses for offering knowledge on98 international arbitration but Pakistan has not been keeping itself away from takingthese advantages of the international arrangements. Thus, the challenge faced by thenation in implementing the NY convention can be presumed to be the lack of propertraining and knowledge on the updates of the international arbitration proceedings.96Taisei Corporation v. A.M. Construction Co. (Pvt.) Ltd., PLD 2012 Lahore 45597Jaynes Gordon, International Arbitration in Pakistan A Janusian Perspective, Journal of international Arbitration, Kluwer LawInternational, 2004, Volume 21| Issue 1+ 83 -8998Source: http://www.idlo.int/english/WhatWeDo/elearning/Pages/default.aspx;http://www.law.qmul.ac.uk/postgraduate/distancelearning/diploma_arbitration/index.htmlPage 50 "