Between Internationalization and Domestic Resistances: A Critical Overview of the Application of the Recognition and Enforcement Act, 2011, Pakistan

In recent decades, arbitration has become the tool of choice when it comes to the settling of international disputes of both commercial and investment nature. The advantages of arbitration are many, and well-known: among those, the (relative) freedom from the jurisdiction of local court systems which may be overburdened, pathologically slow, or unprepared to deal with complex international transactions. Under this perspective, an arbitration-friendly environment is considered a fundamental step in order to reassure foreign investors, and to entice them into bringing their economic initiatives into a country. Consequently, many developing and recently developed jurisdiction have rushed to improve their arbitration-related legislation, and have acceded to international covenants such as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the "New York Convention"). Yet, the legislator is not able to create an arbitration-friendly environment just by enacting new norms, no matter how progressive: in order to create the proper conditions for arbitration to flourish, there is the need of a complex and structure cooperation between all the stakeholders involved. In this regard, national courts still play a fundamental role. While arbitration aficionados like to promote the idea of the de-nationalization of arbitration, and while indeed arbitration operates – to a limited extent - in a semi-autonomous legal environment, some scholars have pointed out that this ideal tension towards delocalization is just a philosophical concept largely detached from reality. To put it in blunt terms, arbitration still needs the support of national laws, and of the State-established court system – for example, when it comes to enforcement. Pakistan is no exception to this complex dialectic: on the one hand, the country is implementing legislation to promote arbitration (with the primary purpose of attracting foreign investors); on the other, the court system seems to be unprepared to deal with the intricacies of international arbitration and adopted, in several instances, a pro-domestic bias. This research note intends to present to an international audience some of these cases. We feel that there is a scarcity of literature available on the reality of arbitration in Pakistan, and these short reflections are a first attempt to close the gap.