Pakistan as the global south’s arbitration capital

PAKISTAN has been trying to solve 21st-century commercial disputes with a colonial straitjacket since independence. The Arbitration Act of 1940 was designed for a world where the British Empire still ruled, where cross-border trade was a luxury and where “alternative dispute resolution” meant little more than a judge suggesting the parties talk it out. That world is long gone. Today, Dubai is under threat. The cranes that once defined its skyline now share space with military tensions. DIAC, once the crown jewel of Gulf arbitration, faces an uncertain future. Qatar’s impressive rise, built on Law No. 15/2021 and QICCA’s 2024 rule modernization, rests on a foundation of regional stability that no one can guarantee. The world’s merchants are quietly asking: Where do we go when the Gulf closes for business? Islamabad has an answer. But only if it kills the 1940 Act first. The Arbitration Bill of 2024, submitted to the Ministry of Law in May 2024, is the most significant legal document Pakistan which is need of the time. Based on the UNCITRAL Model Law, it would finally give Pakistan a framework that international investors recognize and trust. The Bill enshrines kompetenz-kompetenz, the principle that arbitrators decide their own jurisdiction, not courts. It limits judicial intervention to a handful of narrow grounds. It defines “public policy” for the first time, confining it to fraud, corruption, material breaches of natural justice, and violations of fundamental morality. But the Bill is not perfect, and pretending otherwise would cost us this historic opportunity. First, the interim relief regime is a disaster waiting to happen. Under Section 19(3), any interim measure ordered by an arbitral tribunal can be appealed to a court. This is a reckless departure from the Model Law, and it invites precisely the kind of judicial interference the Bill claims to reject. If a party can slow-walk arbitration by appealing every interim ruling, the entire process becomes as inef