Abstract:
In contrast to the conventional method of litigation, one of the most advanced and effective potential dispute resolution methods for resolving commercial conflicts among the contracting parties are arbitration. Because it is quick and flexible, parties may avoid the drawn-out process of litigation, which is why it is favoured around the globe. International or foreign arbitration seeks to give parties involved in cross-border commercial transactions an impartial forum for dispute resolution. Arbitration's widespread acceptance and legal enforceability are key factors as well. Unfortunately, Pakistan's ability to properly implement international arbitral awards is underdeveloped, making it challenging for Pakistan to draw in foreign direct investment. Due to poor regulation and a lack of compliance with international standards, foreign arbitral awards are not adequately recognized and enforced. The ambiguity of court precedents is another key factor in their inapplicability. In the past, inconsistent and ambiguous rulings have led to the incorrect implementation of foreign awards in Pakistan. The efficiency of arbitration is being impacted by the inadequate number of distinct and institutional forums and procedures to begin, conduct, or finish the arbitration. The sole requirements of the foreign investor are that the provisions of the contract or agreement be respected and that the arbitration agreement and ruling be enforceable. Sadly, these prerequisites are not satisfied here, and as a result, Pakistan suffers from a severe shortage of international investment. Only two laws in Pakistan address arbitration and even those are ambiguous and unreliable. Pakistan has historically suffered substantial losses as a result of foreign arbitral awards that are not enforceable, weak national and international arbitration regulations, and incompetent structuring of transnational agreements and arbitration contracts. Numerous examples, including those involving Hitachi, HUBCO, and Reko Diq, show that Pakistan has borne mass losses and has had to make considerable compensations. The current study provides a comprehensive analysis of both local and international arbitration as well as Pakistan's utilization of foreign arbitral awards. The study describes local arbitration in Pakistan as well as international arbitration, including its procedures, decisions, and execution. The research also identifies the weaknesses that make it difficult to deal with fundamental issues like applying foreign arbitral awards at the local scale in accordance with international practise. For evaluating and analyzing the data, the current study uses analytical and descriptive methodologies. The key sources for the literature studies for this study are the applicable legislation, conventions, international treaties, regulatory frameworks, case laws, and legal authorities.
