Alternate Dispute Resolution

2025 PLD 582 SUPREME-COURT Judicial Precedent

Alternate Dispute ResolutionMediationArtificial Intelligence (AI), use ofPrinciple

AI lacks ability to feel emotional tenor, to de-escalate tension between parties, or to recognize the power of silence in a negotiation

AI also cannot build trust across the table through empathy, qualities essential to successful mediation

This is where human mediators continue to hold the advantage

AI may be able to streamline many facets of legal practice, it cannot replicate deeply human process of mediation, where the emphasis is on understanding, negotiating, and resolving conflicts through human interaction

Mediation is emerging as the future power player in dispute resolution.

2025 CLD 1807 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 89-A & O. X, R. 1-BAlternate Dispute ResolutionMediation/arbitration, referral toCourt, powers ofScope

Before making a reference to arbitration, it would be worthwhile to refer the dispute to mediation; even if the parties can settle a part of their dispute, that will still save their time and costs in arbitration

Parties are, generally, not averse to mediation as long as a time-line is fixed

The benefits of mediation, out of the other modes of alternate dispute resolution and especially for businesses, are many

Courts are urged to exhibit a pro-settlement and a pro-mediation bias

Therefore, in the present case , in exercise of powers under S. 89-A read with O. X, R. 1-B, C.P.C., the dispute between the parties arising under the contracts-in-question was referred for mediation to the Mediator i.e. Musaliha International Center for Arbitration and Dispute Resolution (MICADR)

Suit was disposed of accordingly.

2024 PTD 1571 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss.54 & 134A [as amended by Finance (Amendment) Act, 2024]Sales Tax Act (VII of 1990), S. 47AAlternate Dispute ResolutionState-owned enterprise

Petitioner / Trading Corporation of Pakistan was aggrieved of recovery notices issued by Income Tax Authorities without constituting Alternative Dispute Resolution Committees

Validity

Inland Revenue Officials realized that certain amendments had been carried out in Income Tax Ordinance, 2001, as well as other Federal fiscal laws, whereby, State Owned Enterprises were required to apply to Federal Board of Revenue for constitution of Alternate Dispute Resolution Committee (ADRC) for the resolution of any dispute

Officials of Inland Revenue were under obligation to withdraw any and all pending litigations

Inland Revenue authorities were directed to withdraw all recovery notices issued to State Owned Enterprises under tax laws as there was no other legal remedy available to them except applying for constitution of Alternative Dispute Resolution Committee

Constitutional petition was disposed of accordingly.

2024 PTD 1507 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss.54 & 134A [as amended by the Finance (Amendment) Act, 2024]State-Owned Enterprises (Governance and Operations) Act (VII of 2023), Ss. 2 (e)(ii) & 3Rules of Business, 1973, R. 8 (2)Inter Division ProcedureAlternate Dispute ResolutionState-owned enterpriseTax exemption, dispute of

Petitioner / Civil Aviation Authority claimed that it was exempted from levy of income tax and that it was not obliged to follow Alternate Dispute Resolution

Validity

Petitioner was an authority generating its revenue from selling services on a commercial basis, therefore, provision of S. 2(e)(ii) of State-Owned Enterprises (Governance and Operations) Act, 2023 was fully attracted

Petitioner / Authority was being run on a commercial basis and was controlled or managed by Federal Government

Petitioner / Authority was covered by State-Owned enterprises (Governance and Operations) Act, 2023

Internal mechanism under S.134A of Income Tax Ordinance, 2001, was evolved for quick disposal of tax disputes between State-Owned Enterprises and Federal Board of Revenue, as in any such disputes, it was, in fact, the Federal Government who was the ultimate loser, by way of litigation costs besides delay in settlement of such disputes from Courts of law

High Court declined to exercise its discretion under Art. 199 of the Constitution so as to adjudicate the matter on merits

High Court directed petitioner / Authority to either avail Alternate Dispute Resolution mechanism under S. 134A of Income Tax Ordinance, 2001 or under R. 8(2) of Rules of Business, 1973 and if at all the issue was not resolved by way of such two alternate mechanisms and petitioner / Authority remained aggrieved, then the petitioner / Authority was at liberty to seek remedy as could be available under the law

High Court directed Federal Board of Revenue to form Committee in terms of S.134A(3) of Income Tax Ordinance, 2001, in case petitioner / Authority would opt for Alternate Dispute Resolution in terms of S.134A of Income Tax Ordinance, 2001

High Court directed Inland Revenue authorities to halt recovery proceedings under S. 134A (7) of Income Tax Ordinance, 2001, as soon as a Committee was notified

Constitutional petition was disposed of accordingly.

2024 CLD 1518 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 2 (e)(ii) & 3Rules of Business, 1973, R. 8(2)Income Tax Ordinance (XLIX of 2001), Ss.54 & 134A [as amended by the Finance (Amendment) Act, 2024]Inter Division ProcedureAlternate Dispute ResolutionState-owned enterpriseTax exemption, dispute of

Petitioner / Civil Aviation Authority claimed that it was exempted from levy of income tax and that it was not obliged to follow Alternate Dispute Resolution

Validity

Petitioner was an authority generating its revenue from selling services on a commercial basis, therefore, provision of S. 2(e)(ii) of State-Owned Enterprises (Governance and Operations) Act, 2023 was fully attracted

Petitioner / Authority was being run on a commercial basis and was controlled or managed by Federal Government

Petitioner / Authority was covered by State- Owned enterprises (Governance and Operations) Act, 2023

Internal mechanism under S.134A of Income Tax Ordinance, 2001, was evolved for quick disposal of tax disputes between State-Owned Enterprises and Federal Board of Revenue, as in any such disputes, it was, in fact, the Federal Government who was the ultimate loser, by way of litigation costs besides delay in settlement of such disputes from Courts of law

High Court declined to exercise its discretion under Art. 199 of the Constitution so as to adjudicate the matter on merits

High Court directed petitioner / Authority to either avail Alternate Dispute Resolution mechanism under S. 134A of Income Tax Ordinance, 2001 or under R. 8(2) of Rules of Business, 1973 and if at all the issue was not resolved by way of such two alternate mechanisms and petitioner / Authority remained aggrieved, then the petitioner / Authority was at liberty to seek remedy as could be available under the law

High Court directed Federal Board of Revenue to form Committee in terms of S.134A(3) of Income Tax Ordinance, 2001, in case petitioner / Authority would opt for Alternate Dispute Resolution in terms of S.134A of Income Tax Ordinance, 2001

High Court directed Inland Revenue authorities to halt recovery proceedings under S.134A(7) of Income Tax Ordinance, 2001, as soon as a Committee was notified

Constitutional petition was disposed of accordingly.

2022 CLC 142 PESHAWAR-HIGH-COURT Judicial Precedent

S.3Constitution of Pakistan, Art.199Constitutional petitionVires of lawAlternate Dispute ResolutionObject, purpose and scope

Petitioner assailed Khyber Pakhtunkhwa Alternate Dispute Resolution Act, 2020, on the plea that the same was ultra vires the Constitution

Validity

Provincial Government was competent to legislate on the subject and there was no mala fide on the part of the Legislature to pass the law

Apart from providing inexpensive and expeditious justice to litigants, there were further advantages of Alternate Dispute Resolution System, which included direct engagement of parties in the process than what was usually done in the Courts of law

Parties before Saliseen were in better position to explain their stance in their own languages, accents and styles to the Saliseen who also knew well the customs and traditions prevailing the area, who could discuss the issue holistically and try to put an end to a lis once for all without adverting to technicalities

Constitutional petition was dismissed, in circumstances.

2022 PTD 1097 ISLAMABAD Judicial Precedent

Ss.54, 124 & 134AAlternate dispute resolutionRecovery notice

Plea raised by petitioner company was that all orders passed by various forums had to be taken into account before initiating recovery proceedings

Validity

Liability to pay tax was relatable to assessment order or an order passed under any other provision

Liability of tax due, once created, had to be discharged immediately unless it was stayed or allowed to be paid in a particular manner e.g. in installments

Provision of S.124 of Income Tax Ordinance, 2001, did not have an overriding effect nor contemplated that all orders passed by competent forums had to be dealt with together so that a consolidated order was passed to determine total tax profile liability of taxpayer

Authorities were at liberty to proceed in accordance with law pursuant to issuance of recovery notice in question

Petitioner company was entitled to apply to competent authority to allow payment of outstanding amount in installments

Constitutional petition was dismissed, in circumstances.

2021 CLC 1206 PESHAWAR-HIGH-COURT Judicial Precedent

S.89-A & O.XII, R.6Alternate Dispute ResolutionCompromise between the partiesScope and effect

Civil laws dealt with properties (either moveable or immoveable) and rights in which, at each and every stage, parties could enter into a compromise/settlement and Courts had vast powers to decide the lis on the basis of settlement, so arrived between the parties

Only exception to a compromise could be that the same might not be made with ill-will or connivance between the parties, so that a third party should not suffer or his right might not be adversely affected

Compromise was the best solution for removal of differences and it was always appreciated by the Courts of law, for which certain specific provisions were also inserted in the Civil Procedure Code, 1908, such as Alternate Dispute Resolution (ADR), conferencing and reconciliation; and that was the reason the provisions of O.XII, R.6, C.P.C, were made part of the statute.

2021 CLD 885 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 89-A & O. X, R. 1BAlternate dispute resolutionScope

Plaintiff filed suit for declaration, permanent injunction, infringement of copyright, delivering up, rendition of accounts and damages

Along with the suit, plaintiff filed an application under S. 89-A, C.P.C. praying that the dispute between the parties be referred to mediation in terms of the agreement executed between the parties

Validity

Said application was disposed of and a Mediator was appointed by the Court with consent of the parties

Petition under O. X, R. 1B(vi), C.P.C. was submitted by the Mediator wherein he had stated that the parties executed a settlement agreement, original whereof was attached to the petition

At the foot of the settlement agreement, there was a certificate by the Mediator certifying that the parties had entered into the said agreement voluntarily

Mediator as well as the counsel for the parties requested that as all the disputes had been resolved by the parties through the said agreement, present suit be decreed in terms thereof

Suit was decreed in terms of the settlement agreement arrived at by the parties.

2015 MLD 746 ISLAMABAD Judicial Precedent

S.17ArbitrationAlternate Dispute ResolutionScopeRecent trend is to minimize interference by courts, when parties have voluntarily chosen a forum of their own choiceCourts can interfere to the extent as provided in Arbitration Act, 1940

Expeditious and inexpensive Dispute Resolution is the life blood for vibrant economy and inevitable for economic growth and progress

Courts have a crucial role to play in ensuring that commitments made between the parties are honoured and implemented

Duty of courts is to promote certainty by enforcing binding commitments made by parties.