Islamabad High Court prioritizes domestic law over foreign decrees in landmark ruling

The Islamabad High Court (IHC) has ruled that foreign court decrees must be assessed against Pakistani legal standards before enforcement, emphasizing a balance between international comity and domestic legal protections. This decision came as Justice Raja Inaam Ameen Minhas dismissed a petition seeking to enforce a money decree issued by a Dubai court against two Pakistani businessmen, Latif Hakeem and another individual. The Dubai decree, initially obtained in October 2021, was subsequently upheld by higher Dubai courts but was set aside by the IHC. The court found that the Dubai courts had improperly relied on criminal findings to determine civil liability, which is contrary to Pakistani jurisprudence where civil and criminal proceedings are distinct. Justice Minhas stressed that Pakistani courts must independently verify foreign judgments for compliance with local jurisdiction, natural justice, fraud, public policy, and domestic law. The ruling invoked Section 13 of the Civil Procedure Code, stating that if any of its exceptions apply, a foreign judgment loses its conclusiveness and cannot be enforced. Specifically, the court identified exceptions under Section 13(c) and (f), relating to the refusal to recognize Pakistani law or claims founded on its breach, and also cited Article 10-A of the Constitution guaranteeing a fair trial. The case involved a commercial dispute between Samsung Gulf Electronics FZE and its former distributors, Greentalk FZE and Mobile Sales & Distribution (MS&D), who claimed Samsung owed them approximately $26.6 million in unpaid reimbursements. Samsung, however, alleged the distributors owed them about $21 million. Despite arbitration agreements that had previously restrained Samsung's court actions, the company secured the Dubai decree, which the IHC has now refused to enforce.