Dispute Resolution

Dispute resolution law in Pakistan involves multiple mechanisms for resolving conflicts outside traditional court litigation. The legal framework includes mediation, arbitration, and conciliation, governed by various statutes and judicial precedents.

1. Arbitration

Arbitration in Pakistan is primarily governed by:

• The Arbitration Act, 1940: Provides the procedure for arbitration agreements, appointment of arbitrators, and enforcement of awards.
• Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011: Implements the New York Convention on the recognition and enforcement of foreign arbitral awards.

Key Features:

• Parties agree to appoint an arbitrator to settle disputes.
• Awards are binding and enforceable in courts.
• Limited scope for judicial intervention.

2. Mediation & Conciliation

Mediation and conciliation are informal dispute resolution processes where a neutral third party helps disputing parties reach a settlement.

• Code of Civil Procedure (CPC), 1908 (Section 89-A): Encourages courts to refer cases to Alternative Dispute Resolution (ADR).
• Small Claims and Minor Offences Courts Ordinance, 2002: Promotes mediation for minor disputes.
• Islamabad Consumer Protection Act, 1995 & Provincial Consumer Protection Laws: Encourage mediation in consumer disputes.

Key Features:

• Voluntary process.
• Less expensive and quicker than court litigation.
• The mediator facilitates communication but does not impose a decision.

3. Alternative Dispute Resolution (ADR)

ADR mechanisms are increasingly being encouraged, especially in commercial and business disputes.

• ADR Centers: Established under various chambers of commerce and legal bodies.
• Special Tribunals and Councils: Includes Banking Tribunals, Tax Tribunals, and Consumer Courts, which sometimes employ ADR methods.

4. Dispute Resolution in Special Sectors

• Banking Disputes: Governed by the Financial Institutions (Recovery of Finances) Ordinance, 2001.
• Construction & Commercial Disputes: Often resolved through arbitration clauses in contracts.
• Family Disputes: Local councils and family courts encourage mediation in divorce and custody cases.

5. Informal Dispute Resolution (Jirga & Panchayat)

In rural areas, traditional Jirgas (tribal councils) and Panchayats (village councils) are used for dispute resolution. However, their decisions are not legally binding unless recognized by courts.

Challenges in Dispute Resolution

• Delays in enforcement of arbitral awards.
• Judicial interference in arbitration.
• Lack of institutional support for mediation.
• Resistance to ADR due to lack of awareness.

Conclusion

Pakistan’s legal system provides multiple avenues for dispute resolution outside the courts. While arbitration and mediation are gaining traction, challenges remain in implementation and enforcement. Strengthening ADR mechanisms can reduce the burden on courts and promote efficient dispute resolution.