Mediation

In Mughals, a construction company, entered into a project with EOBI and its subsidiary PRIMACO, leading to disputes over extension of time and encashment of guarantees. The contractor invoked the Arbitration Act, 1940, and a two-member arbitral tribunal passed a unanimous award in its favor, which the Civil Court made the Rule of Court. The Lahore High Court set aside the award, rendering it a nullity. On appeal, the Supreme Court suggested mediation.

Held: The Supreme Court referred both appeals to ADR while encouraging a pro-mediation approach across courts. The Court recognized mediation as a fundamental right, especially in an overburdened justice system, emphasizing its potential to democratize access to justice and restore party autonomy in conflict resolution. The Court linked mediation to constitutional guarantees of access to justice (Art. 9, 10A, 37(d)), procedural fairness, and human dignity, framing it as central to a modern, humane justice system. It recommended that Pakistan ratify the Singapore Convention on Mediation, aligning domestic practice with international norms, and directed the Attorney General to pursue this with relevant stakeholders.

Selected Passages:
“Mediation is not merely an alternative to litigation but a complementary and necessary component of the justice system… It prioritizes restoring relationships, preserving dignity, and finding mutually beneficial solutions over the zero-sum outcomes of litigation.

Mediation must be increasingly seen as a right of the parties within the litigation process. Access to justice includes the right to have disputes resolved in a timely and efficient manner

The courts should not only encourage mediating more and litigating less but also exhibit a pro-mediation bias which connotes a predisposition within the legal system for resolution of disputes through mediation rather than through litigation.

It is significant to underline that there are around 2.22 million cases pending before all the courts in Pakistan… This voluminous and chronic pendency necessitates exploration of new and out-of-box dispute resolution solutions. ADR is therefore the way ahead

To promote efficiency and align with the principle that in the future, the traditional trial will be the exception rather than the rule, it is recommended that Pakistan becomes a signatory to the Singapore Convention on Mediation.”