THE 2025 Pakistan International Disputes Weekend (PIDW) is the third in the series of such conferences organized over the last three years.
It is an essential step towards becoming a credible, efficient and neutral place for arbitration, with Pakistan establishing itself as the seat. The geopolitical situation, particularly following Operation Bunyan Al Marsoos, provides us with an opportunity to position ourselves as the regional and South Asian seat of arbitration, which is essential in the context of the national objectives set and being executed through SIFC.
This important event brought together policymakers, legal experts, arbitrators, judges and engineers from Asia, Europe and Africa to talk about how arbitration can help the economy grow, encourage cooperation between regions and find long-term solutions to problems. The message was clear: if the country wants to attract foreign investors and become part of the global business community, it needs to build its own arbitration system and follow modern standards of international law.
The current arbitration system in Pakistan, which is based on the 1940 Arbitration Act, does not meet international expectations. The Act is historic, but it was designed for domestic use and lacks the flexibility and transparency needed for international business disputes. Pakistan has to tailor and develop the legal system of arbitration, aligning itself with the UNCITRAL Model Law on International Commercial Arbitration and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This will align us with the universally acceptable model law, which most countries are familiar with and it will also build investors’ confidence. To make Pakistan a credible seat for arbitration, like Singapore and Dubai, we will have to adapt the UNCITRAL standards and its law and be fully aligned with the Model Law. It can only be achieved by limiting judicial intervention, preparing clear rules for arbitration, protecting party autonomy and establishing a better enforcement mechanism.
The UNCITRAL Model Law encourages consistency and predictability. We need to not only adapt these measures but also practice them credibly to ensure gaining the confidence of the Global South specifically and of the world in general. It is also essential to make clear the difference between the “seat” and “venue” of arbitration. This was a topic of much debate during PIDW’s panel on whether Islamabad could be a regional arbitration seat. The seat determines which laws will apply to the arbitration, while the venue may be chosen for practical reasons. To make Islamabad the legal seat of arbitration, foreign investors need to be sure that the courts are independent and that there are strong ways to enforce the law.
Pakistan needs to make changes to its laws and also improve its institutions. Modern arbitration relies not only on legal frameworks but also on institutions that facilitate proceedings effectively. The Global South Arbitration Alliance (GSAA), proposed during the conference, is an excellent measure to showcase how the regions can work in harmony to develop a common legal framework and an ecosystem of arbitration. The GSAA aims to develop a shared pool of knowledge, establish a legal basis, encourage exchange programs and maintain a pool of arbitrators working across borders. It should also ensure the sharing of best practices to be better aligned with each other. It will also facilitate the BRI initiatives as China is expanding its BRI projects in the region.
By working with GSAA’s goals, Pakistan can get more talented people, build a regional brand and share information with other developing economies like Nepal, Uzbekistan and Armenia. CIArb Pakistan and Mian Sheraz are leading this group effort to make Pakistan an arbitration hub in the Global South. It is essential to ensure that we are fair and consistent to gain investors’ confidence. To ensure that Investor-State Dispute Settlement (ISDS) works, we need to ensure that the arbitrator selection process is open and transparent. There should be a separate system for handling cases and contracts should include ADR clauses and a transparent dispute resolution process, with the stages explained clearly.
Islamabad has the potential to become a regional arbitration centre because of its location and its good name. Pakistan is in the middle of South Asia, Central Asia and the Middle East. This gives it the chance to help settle not only business disputes but also inter-organizational and interstate disputes in the region. But this needs a lot of legal and physical support from all stakeholders. Pakistan should also promote itself globally by using forums to showcase its reforms and by positioning Islamabad as a more affordable alternative to London, Singapore or Dubai.
So, the growth of Pakistan’s arbitration ecosystem is not just a legal luxury; it is also an economic necessity to fulfill the dream of large-scale investment steered by SIFC. Countries that don’t adapt to the global trend towards decentralized dispute resolution risk being left out of high-value cross-border deals. By accepting changes to arbitration, Pakistan not only strengthens its legal identity but also secures its place in the global economy. With the right institutions and trained professionals, a modern arbitration system can make the country a magnet for foreign investment and a model for the Global South. By putting into action the spirit of the GSAA and the promises made at PIDW’25, Pakistan can go from being a participant to a leader, where arbitration is not only practiced but also proudly hosted, showing justice, efficiency and sovereignty.
—The writer is a International Law expert with a rich experience in negotiation, mediation and Alternate Dispute Resolution.
