The Counsel


By: Isfandyar Ali Khan

Alternate Dispute Resolution (ADR) in Pakistan: Pakistani society is well aware of traditional form of dispute settlement which is commonly referred to as “Jirga” or “Panchiayat”. Jirgas and Panchiayats have been playing their role in resolution of disputes in rural areas of the country and have been entertaining various matters, including land and financial disputes. For commercial dispute resolution in urban settings, trade associations, chambers of commerce have been providing internal mechanisms for settlement of disputes however their efforts has not contained parties taking disputes to courts. Even with an Arbitration Act, Pakistan was not able to institutionalize the Arbitration mechanisms and Arbitration did not flourish the way it was intended. Due to lack of institutionalized ADR mechanisms in the country and other factors, Pakistani courts are said to have a backlogging of approximately 1.4 million cases. According to IFC-World Bank “Doing Business” Report 2011, contract enforcement in Karachi, Pakistan, for example is estimated to take 976 days over a process which has 47 procedures. Due to delays in resolution of disputes in courts, ADR mechanisms were required which could facilitate the SME’s and the business community resolve their disputes and reduce time and expenses of dispute settlement.

Commercial Mediation in Pakistan: Commercial mediation has largely been practiced informally by businesses and traders. However, there has been a strong need for introducing commercial mediation in an institutionalized fashion. Pakistan for example, had no ADR or mediation centre prior to 2007 where disputes may have been referred. There were no accredited mediators and SME’s and businesses had no understanding of mediation process through which they could resolve disputes.

Business assets blocked in disputes between contracting parties can affect small and medium size businesses and even harm their business relationship with their clients and business partners if these disputes are not resolved in timely fashion. Arbitration process in Pakistan is lengthy and mediation has recently been given due consideration by stakeholders for quick resolution of disputes.

IFC ADR Project:
International Finance Corporation (IFC), private sector arm of the World Bank Group, has been keen to private sector development in Pakistan and poverty alleviation for economic prosperity through number of initiatives including ADR and mediation. It is generally accepted that with quick and efficient mechanisms for dispute resolution, private sector will be able to resolve disputes without relying on formal litigation process which has been lengthy and in a number of respects does not support private sector. IFC therefore intervened to establish Alternate Dispute Resolution mechanisms in structured fashion and in light of similar initiatives introduced IFC’s ADR Project had the objective of setting up a mediation centre in Karachi on pilot basis as Karachi is not only the financial hub for the country, but it also has strong SME presence needing affordable alternate dispute resolution mechanisms. The project’s components included operationalizing a mediation centre, training of mediators, master trainers and judges, development of case referrals for mediations and enforcement systems for mediation settlements, mediation curriculum in law faculties and business schools, awareness raising for private sector, chamber of commerce, trade and business associations and law reforms in field of ADR/mediation.

KCDR Operations: Karachi Centre for Dispute Resolution (KCDR) was established as first mediation centre in Karachi, Pakistan in 2007. KCDR since its establishment has been providing following services as a not-for-profit registered society:

Mediation Services: KCDR receives cases from Courts and parties directly. Cases pending adjudication before courts may be referred under section 89-A of Civil Procedure Code 1908 or parties may wish to submit their interest for mediation and request for case to be referred to KCDR for mediation.

KCDR has signed a Memorandum of Understanding with Karachi Chamber of Commerce and Industry, representative body for the business community in Karachi, Pakistan for collaborative efforts in field of ADR.

KCDR has dedicated staff who when receive a request for mediation follow a procedure and invite parties for mediation. Subject to consent of parties, an accredited mediator registered at KCDR is engaged to provide mediation services. KCDR has accredited mediators trained by Centre for Effective Dispute Resolution, London, U.K and who belong to diverse professions, including legal. This help parties to seek an accredited mediator who may have expertise in a particular area of dispute such as banking, real estate, accounts, etc.

With affordable fee for mediation services, KCDR make its efforts to provide mediation services as its intention is to popularize mediation and reduce case backlog in courts.

Training Services: KCDR’s master trainers have been delivering trainings to lawyers, judges, and employees in corporate sector since 2008. These trainings have become popular and provide opportunity to KCDR promote mediation concept among various professions.

Conference Facilities: KCDR’s premises are used from time to time for holding Arbitrations. KCDR is member of Asia Pacific Regional Arbitration Group (APRAG).

KCDR Corporate Membership Guild: KCDR has launched a corporate membership scheme which has so far attracted over 40 businesses and other concerns that have either opted to join KCDR as its life or annual members. These corporate members receive number of benefits subject to their membership type.

KCDR provides stakeholders in justice, legal and business sectors an opportunity to take advantage of ADR processes. With high volume of cases pending in courts, other cities in Pakistan are also required to have ADR/mediation centres where disputes may be referred for dispute settlement and ADR/mediation centres are expected to be launched in Lahore soon.

For mediation to flourish in Pakistan, section 89-A of Civil Procedure Code 1908 which outlines litigation procedure for disputes of civil nature including breach of contracts is in dire need of amendment. Although there is mention of case referral for mediations, it still needs to be amended in order to elaborate on number of aspects required for a comprehensive procedure for managing the mediation process. With required amendments, businesses will be able to benefit from litigation procedure that can facilitate dispute settlement through mediation.

The Bar Councils and Bar Associations in Pakistan are required to take interest in promotion of mediation among the legal profession. Lawyers in number of countries have been convinced that mediation brings number of opportunities to their professional growth and they can assist clients in resolution of disputes in shortest time possible.

Isfandyar Ali Khan is currently associated with International Finance Corporation, private sector arm of the World Bank Group where he is managing Alternate Dispute Resolution Projects. He has experience of serving in not-for profit sector and United Nations Development Program in Pakistan and abroad. He was called to the Bar by The Honourable Society of Lincoln's Inn, London and read for the Bar Vocational Course at Inns of Court School of Law, The City University, London. He read for his LL.B (Hons.) Degree at The University of Hull, U.K. He is Member of The Chartered Institute of Arbitrators, London and is Accredited Mediator from Centre for Effective Dispute Resolution, London. He has also attended commercial mediation training at The Academy of Experts, London.