IN THE SUPREME COURT OF PAKISTAN

(Appellate Jurisdiction)

Present:
Mr. Justice Syed Mansoor Ali Shah
Mrs. Justice Ayesha A. Malik
Mr. Justice Aqeel Ahmed Abbasi

Civil Appeals Nos. 256 & 257 of 2024

and CMAs No. 3039 & 3042 of 2024.
(On appeal against the judgment dated 06.01.2024 passed by the
Lahore High Court, Lahore in RFA No. 43092 and 37623 of 2022)

M/s Mughals Pakistan (Pvt) Limited

….Appellant
(in both cases)

Versus

Employees Old Age Benefits Institution through its Director Law,

Lahore and others (In CA. 256/2024)

M/s Pakistan Real Estate Investment & Management Company (Pvt)

Ltd., (“PRIMACO”) and others (In CA. 257/2024)

….Respondents

For the Appellants: Mr. Ahmer Bilal Soofi, ASC

Syed Ali Imran, ASC
Sh. Mehmood Ahmed, AOR

For the Respondents: Salman Mansoor, ASC

Mian Shafqat Jan, ASC
Barrister Khurram Raza, ASC
Syed Rifaqat Hussain Shah, AOR
Sukhan Ilyas Malik, Dy. Dir. Law (EOBI)
Imran Shanwari, CEO PRIMACO

Assisted by: Umer A. Ranjha, Judicial Law Clerk

Date of hearing: 06.11.2024

…

ORDER

Syed Mansoor Ali Shah, J. – The brief facts giving rise to the
instant appeals are that M/s Mughals Pakistan (Pvt.) Limited
(“appellant”), a private limited construction company was engaged by
Employees Old Age Benefits Institution and its wholly owned
subsidiary, M/s Pakistan Real Estate Investment & Management
Company (Pvt.) Ltd., (collectively referred to as the “respondents”) for
Civil Appeals No.256 and 257 of 2024 2

a construction project. Following the initiation of the project, disputes

arose between the appellant and the respondents regarding the
extension of time and the encashment of Mobilization Advance
Guarantees. Subsequently, the appellant filed petitions under Section
20 of the Arbitration Act, 1940 (“Act”) alongwith an application under
Section 41 read along with Second Schedule to the Act, seeking
injunctive relief as well as invoking the remedy of arbitration before
the learned Civil Court, Lahore. Thereafter, a two-member arbitral
tribunal was constituted which, after hearing both the parties
unanimously passed the arbitral award which was made the Rule of
Court by the learned Civil Court vide its judgment and decree dated
18.05.2022, as provided under Sections 14 and 17 of the Act. An
appeal was filed against the said judgment by the respondents before
the Lahore High Court, Lahore which was allowed vide judgment dated
06.01.2024 and the unanimous arbitral award was rendered a nullity.
Hence, the instant appeal.

2. During the last hearing1, it was deemed appropriate by the

Court to suggest mediation of the dispute between the parties given
the nature of the dispute. The parties were given appropriate time to
seek instructions and explore the possibility of an out of court
settlement. Today, the respondents after initially expressing their
unease with out of court settlement or alternative dispute resolution
(“ADR”) finally agreed to resolve their dispute through mediation in
both the appeals. The respondents, however, reserved their right to
expand the scope of their dispute before the mediator, provided both
the parties mutually agree to such a change.

3. “The courts of this country should not be the places where

resolution of disputes begins. They should be the places where the
disputes end after alternative methods of resolving disputes have been
considered and tried.”2 It is significant to underline that there are
around 2.22 million (2,221,512) cases pending before all the courts in
Pakistan.3 Out of these, 0.35 million (347,173) cases are pending in
the Constitutional Courts (Supreme Court of Pakistan and the High
Courts) while the bulk of the pendency is in the District Courts which
constitutes 82% of these cases, translating into a backlog of 1.82

1
Order dated 09.10.2024.
2
Justice Sandra Day O’ Connor, Speech at the Minnesota Conference for Women in the Law, April 1985.
3
Judicial Statistics, 3rd Bi-Annual Report (January – June 2024), Law and Justice Commission of Pakistan <
http://www.ljcp.gov.pk/reports/3bar.pdf> accessed 19 November, 2024.
Civil Appeals No.256 and 257 of 2024 3

million (1,815,783) cases. This voluminous and chronic pendency

necessitates exploration of new and out-of-box dispute resolution
solutions. ADR is therefore the way head.

4. Mediation is evolving as a powerful mechanism for conflict

resolution, bridging divides with creativity and fostering harmonious
solutions. It is a testament to the potential of dialogue over
confrontation. Mediation (and other mechanisms of ADR) can be
philosophically framed as essential tools to ensure access to justice in
a country where millions of cases are pending. This approach aligns
with a broader understanding of justice as being not only about
achieving outcomes but also about the process itself being fair,
efficient, and accessible. Traditional court system is adversarial and
often resource-intensive, leading to delays and alienation of
marginalized groups. Mediation embodies a collaborative model of
justice that prioritizes dialogue and empowerment, ensuring parties
are active participants in resolving their disputes. The sheer volume of
pending cases often renders justice delayed, and as the saying
goes, “Justice delayed is justice denied.” Mediation offers a timely and
context-sensitive resolution that addresses the substance of disputes
without being bogged down by procedural complexities.
Philosophically, mediation reflects the relational nature of human
beings. It prioritizes restoring relationships, preserving dignity, and
finding mutually beneficial solutions over the zero-sum outcomes of
litigation. Mediation accommodates the cultural, social, and economic
diversity of disputing parties. It aligns with justice as capability-
enhancing, allowing parties to exercise their agency and reach
solutions that reflect their lived realities. Mediation bridges modern
legal systems with indigenous practices, thereby strengthening
communal harmony while maintaining legal validity.

5. 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.
Mediation, as a faster and cost-effective alternative, satisfies this
fundamental aspect of justice. Mediation respects the autonomy of the
parties by giving them control over the process and outcome, unlike
litigation, where outcomes are imposed by judges. Litigants have the
right to avoid the adversarial consequences of litigation, such as
financial strain, emotional distress, and reputational harm. Mediation
Civil Appeals No.256 and 257 of 2024 4

provides a non-confrontational environment that mitigates these risks.

Procedural justice emphasizes the fairness of the process, and
mediation upholds this by ensuring participation, neutrality, and
respect – core elements of a fair process. In contexts where economic
inequalities limit access to legal representation, mediation ensures
that the justice system remains accessible to the underprivileged.
Many societies have strong traditions of community-led dispute
resolution. Mediation builds on these traditions, ensuring justice
remains culturally relevant. “Mediation is at the heart of access to
justice. Courts must embrace it as an essential tool for efficient and
humane dispute resolution.”4 In conclusion, mediation is not merely
an alternative to litigation but a complementary and necessary
component of the justice system.

6. The reasons which make mediation a compelling choice for an

appropriate avenue to resolve disputes efficiently and effectively, inter
alia, include: (i) Cost-effectiveness; mediation incurs lower legal fees
and expenses due to shorter and less formal processes; (ii) Time
efficiency; resolutions can often be reached much faster through
mediation than through court proceedings, which can take years to
conclude, (iii) Flexibility; the procedures in mediation are flexible,
allowing parties to tailor the specific processes to their specific needs,
including choosing their mediator and deciding the rules for the
proceedings, (iv) Confidentiality; unlike trials in courts which are
generally public, mediation processes are private. This confidentiality
can be crucial for preserving personal relationships, protecting trade
secrets or avoiding negative publicity, (v) Preservation of relationships;
mediation encourages cooperation and communication, which can
help maintain or even improve relationships between parties, a key
consideration in business context or family disputes, (vi) Control over
the outcome; parties have more control over the resolution as they are
directly involved in negotiating the settlement, (vii) Expertise; parties
have choose an expert in the filed relevant to their dispute to act as
the mediator, which can lead to more informed decisions and (viii)
Reduced hostility; mediation tends to be less adversarial than court
litigation, which can reduce tensions and hostility between parties.

4
Chief Justice Sundaresh Menon’s speech titled “International Mediation and the Role of Courts” at the Supreme
Court of Indonesia, November 2023.
Civil Appeals No.256 and 257 of 2024 5

7. It needs to be reiterated that “an ounce of mediation is worth a

pound of arbitration and a ton of litigation.”5 Our courts, more
recently, have encouraged ADR.6 The courts should not only
encourage “mediating more and litigating less7” but also exhibit a pro-
mediation bias which connotes a pre-disposition within the legal
system for resolution of disputes through mediation rather than
through litigation or other forms of dispute resolution. Such bias does
not favor one party over another but rather prioritizes mediation as the
preferred method of dispute resolution. It is grounded in the belief that
settlements are generally more efficient and satisfactory for all parties
involved compared to outcomes determined by a court.8 Mediation
offers the best chance of a solution where both parties leave with
dignity and satisfaction, as opposed to the all-or-nothing results of
litigation.

8. The introduction of a robust legal landscape i.e., The Alternate

Dispute Resolution Act, 2017 (“2017 Act”) and the provincial
legislations9 in each respective province allows courts to exercise this
pro-mediation bias. These laws accord the courts the power to refer a
case to ADR with the consent of the parties. Similarly, ADR has been
defined very broadly ‘as a process in which parties’ resort to resolving
a dispute other than by adjudication by courts and includes, but is
not limited to, arbitration, mediation, conciliation and neutral
evaluation.’ The 2017 Act alongwith the Balochistan Alternate Dispute
Resolution Act, 2022 separately define mediation ‘as a process in
which a mediator facilitates dispute resolution by encouraging
communication and negotiation between the parties, in order for them
to arrive at a mutually satisfactory agreement.’10 Similarly, the Code of
Civil Procedure (Sindh Amendment) Act, 2018 offers the most holistic
definition of mediation by defining it as ‘a process which is conducted
confidentially in which a neutral person (mediator) actively assists
5
Words of Joseph Grynbaum, an international mediator.
6
Taisei Corporation v. A.M. Construction, 2024 SCMR 640; Commissioner Inland Revenue v. RYK Mills, 2023
SCMR 1856; National Highway Authority v. Sambu Construction, 2023 SCMR 1103; Orient Power Company v.
Sui Northern Gas, 2021 SCMR 1728; Federation of Pakistan v. Attock Petroleum, 2007 SCMR 1095; Waqas
Yaqub v. Adeel Yaqub, 2024 CLD 990; Faisal Zafar v. Siraj-ud-Din, 2024 CLD 1; Fiaz Hussain Minhas v. SECP,
C.O. No. 75025/2022 (unreported); Netherlands Financierings v. Morgah Valley, 2024 CLD 685; Strategic Plans v.
Punjab Revenue Authority, PLD 2024 Lahore 545; Sohail Nisar v. Nadeem Nisar, 2024 LHC 1435; Messrs Alstom
Power v. Pakistan Water, PLD 2007 Lahore 581; Shehzad Arshad v. Pervez Arshad, 2024 CLD 1121; Focus
Entertainment v. Television Media, 2021 CLD 885; Asif S. Sajan v. Rehan Associates, PLD 2012 Sindh 388;
Messrs U.I.G v. Muhammad Imran Qureshi, 2011 CLC 758; Miss Memoona Zainab Kazmi v. Additional District
Judge, 2023 CLC 207; Imperial Electric Company v. Zhongzing Telecom Pakistan, 2019 CLD 609.
7
Cowl v. Plymouth City Council [2001] EWCA Civ 1935 (per Lord Woolf LCJ).
8
Province of Punjab v. Haroon Construction Company, 2024 SCMR 947.
9
The Punjab Alternate Dispute Resolution Act, 2019; The Balochistan Alternate Dispute Resolution Act, 2022;
The Khyber Pakhtunkhwa Alternate Dispute Resolution Act, 2020; Code of Civil Procedure (Sindh Amendment)
Act, 2018.
10
Section 2(i), The Balochistan Alternate Dispute Resolution Act, 2022 and Section 2(i), The Alternative Dispute
Resolution Act, 2017.
Civil Appeals No.256 and 257 of 2024 6

parties in working towards a negotiated agreement of a dispute or

difference, with the parties in ultimate control of the decision to settle
the terms of the resolution, the mediator having no decision-making
power or authority to impose solutions on the parties or force
settlement between the parties.’11 To ensure inexpensive and
expeditious justice by means of an alternate dispute resolution
system, these legislations also provide for referral of cases to ADR
centers. Further, various other laws12 also encourage the use of out of
court settlement, in particular mediation. More recently, the ADR
Mediation Accreditation (Eligibility) Rules, 202313 which provide for
the eligibility requirements for any such center providing mediation
services and Mediation Practice Direction (Civil) Rules, 202314 which
provide for the practice to be followed by the courts in cases involving
mediation, have been notified. Therefore, by using this legal framework
as a means to foster a pro-mediation bias, courts, in particular the
District Courts can contribute to a more harmonious and efficient
dispute resolution landscape, where parties are empowered to resolve
conflicts collaboratively and constructively. Encouraging mediation
aligns with the broader goals of justice systems worldwide: to resolve
disputes in a manner that is fair, efficient, and conducive to the long-
term well-being of all parties involved.

9. In actualizing the true spirit of these legislations, various

mediation centers15 including the Islamabad High Court-Annexed
Mediation Center have been introduced, marking a significant
initiative to reduce case backlog and prioritize mediation for dispute
resolution. This idea of a court-annexed mediation through judges is
highly encouraged and should extend to all Provinces as it will
increase the likelihood of a settlement because litigating parties
respect both the bench and the mantle of the judge. At the same time,
private centers are also encouraged to adopt mediation as an efficient
means to foster timely access to justice to all.

11
Section 89-A(1), Code of Civil Procedure, 1908 (as amended by the Code of Civil Procedure (Sindh
Amendment) Act, 2018.
12
Section 134-A, Income Tax Ordinance, 2001; Sections 276-78, Companies Act, 2017; Section 195-C, Customs
Act, 1969 and Section 47-A, Sales Tax Act, 1990.
13
Mediation Accreditation (Eligibility) Rules, 2023 notified on 21.02.2023 by the Islamabad High Court.
14
Mediation Practice Direction (Civil) Rules, 2023 notified on 25.10.2023 by the Islamabad High Court.
15
Musaliha International Center for Arbitration and Dispute Resolution (notified on 11.04.2023 by the Ministry of
Law and Justice); International Dispute Resolution Institute (notified on 13.09.2023 by the Ministry of Law and
Justice); International Center for Appropriate Dispute Resolution and Prevention (notified on 13.09.2023 by the
Ministry of Law and Justice); Indus Mediation and Dispute Resolution Center (notified on 13.06.2024 by the
Ministry of Law and Justice) and IBA ADR International Center (notified by the High Court of Sindh in 2020).
Civil Appeals No.256 and 257 of 2024 7

10. From a global perspective, the value of mediation as a method of

amicably resolving disputes has been recognized in various
international legal instruments including the United Nations
Convention on International Settlement Agreements Resulting from
Mediation, known as, the “Singapore Convention on Mediation”,
(“Singapore Convention”).16 The Convention provides a uniform and
efficient framework for the recognition and enforcement of mediated
settlement agreements that resolve international, commercial disputes
– akin to the framework that the 1958 New York Convention provides
for arbitral awards. To date, the Convention has 57 signatories, while
only 12 states have ratified the same. To promote efficiency and align
with the principle that ‘in the future, it is likely that the traditional
trial will be the exception rather than the rule’17 it is recommended
that Pakistan becomes a signatory to the Convention. This will not
only reduce the alarming backlog statistics through enhancing faster
access to justice but will also serve as a turning point towards a
comprehensive and profound transformation of the legal and judicial
system.

11. In view of the aforesaid, these appeals are disposed of as being

sent out for mediation. In case mediation or any other mode of ADR is
unsuccessful, the parties may approach this Court and apply for the
refixation of these appeals. These appeals are, therefore consigned to
the record.

12. Copy of this Order be dispatched to the Attorney-General for

Pakistan for considering the recommendation in paragraph 7 of this
Order regarding the ratification of the Singapore Convention with the
relevant quarters.

Judge

Judge

Judge
Islamabad,
06 November 2024
Approved for reporting
Iqbal

16
Adopted on 20 December 2018 by the UN General Assembly and opened for signature on 07 August, 2019.
17
Lord Woolf, Harry, Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System in
England and Wales’ HMSO, July 1996.