@Nadavslist

@Nadavslist: A Comprehensive Compendium of Legal Answers, Public Advisories (and sometimes just sensible life advice for local and overseas Pakistanis)

Welcome to @Nadavslist, a valuable resource for legal queries compiled for the benefit of the general public in Pakistan and abroad. This compendium of answers is dedicated to the memory of our esteemed remote worker and Client-Care Manager between the period of 2016 to 2020, Nathan Nadav, who made significant contributions to our team during his tenure with us.He was known for his prompt and witty responses to current and potential clients contacting our website and over the years, he became the friendly face of our law firm with his exceptional communication skills.

Sadly, we lost Nathan during the Covid19 pandemic.

@Nadavslist is updated daily on the Josh and Mak International website, ensuring that you have access to the most up-to-date information and insights on various legal topics. Our goal is to provide clarity and guidance to individuals seeking answers to their legal questions.

With a diverse range of topics covered, @Nadavslist addresses the legal concerns of individuals from all walks of life. We invite you to explore @Nadavslist and discover the answers to common legal queries. If you can’t find any specific information you are looking for, please don’t hesitate to reach out to our team directly. We are here to assist you and provide further guidance.

Thank you for your continued support, and we hope that @Nadavslist serves as a valuable resource for all your legal inquiries.

September 2023: Admissibility of WhatsApp messages 

Question : Can WhatsApp messages be accepted in a court of law as evidence given that the messages are stored in the phone and can be fabricated? Please also give context of Pakistani case law.

Answer : Yes, WhatsApp messages have been accepted as evidence in various court cases in different parts of the world. However, the admissibility of WhatsApp messages as evidence depends on several factors, including their authenticity and how they are presented in court. Here are some key considerations:

• Authentication: To be accepted as evidence, WhatsApp messages must be properly authenticated. This means that the court needs to be reasonably sure that the messages were sent or received by the individuals claimed and have not been tampered with or fabricated. Courts often require additional evidence, such as metadata or testimony from the parties involved, to establish authenticity.
• Chain of Custody: It’s important to maintain a proper chain of custody for the digital evidence, including WhatsApp messages. This ensures that the messages have not been altered or tampered with between the time they were obtained and their presentation in court.
• Expert Testimony: In some cases, digital forensics experts may be called upon to testify about the authenticity and integrity of WhatsApp messages. Their expertise can help establish the credibility of the evidence.
• Consent and Privacy: The admissibility of WhatsApp messages may also be influenced by considerations of consent and privacy. Courts may assess whether the messages were obtained legally and whether any privacy laws or regulations were violated.
• Relevance: WhatsApp messages must be relevant to the case at hand to be admitted as evidence. They should have a direct bearing on the legal matter being litigated.
• Hearsay: In some jurisdictions, WhatsApp messages may be considered hearsay evidence. Whether they are admissible or not depends on the rules of evidence in the specific jurisdiction.
• Corroborating Evidence: Courts often consider whether there is other corroborating evidence to support the content of WhatsApp messages. Corroboration can strengthen the reliability of the evidence.

It is worth noting that the admissibility of digital messages, including those from WhatsApp, is an evolving area of law. Courts are increasingly dealing with cases involving digital evidence, and legal standards are adapting accordingly. Overall, while WhatsApp messages can be used as evidence in court, their admissibility depends on various factors, and they must meet the legal standards and requirements of the jurisdiction in which the case is being heard.

Pakistani Law and WhatsApp messages: In the context of Pakistan many recent cases provide valuable insights into the use of WhatsApp messages and their admissibility as evidence in Pakistani law, as well as the legal consequences associated with such evidence.

In the case of Mst. HAJIRA BIBI alias SEEMA vs. ABDUL QASEEM (Citation: 2023 SCMR 870), the prosecution presented voice messages from WhatsApp chats as evidence. However, it is noteworthy that the court found that the transcript of these messages did not constitute any offence. This emphasizes the importance of the content of WhatsApp messages when assessing their admissibility as evidence. The court ultimately acquitted the accused due to the lack of specific details regarding the conspiracy and the content of the messages.

In the case of FAKHAR ZAMAN vs. State (Citation: 2023 PCrLJ 496), the accused was alleged to have used his WhatsApp account to harass and blackmail a woman, which included displaying images and videos to harm her reputation and privacy. The court refused bail to the accused, highlighting the serious nature of the allegations. This case underscores that WhatsApp messages can be used as evidence in cases related to cyber stalking and harassment, and their content can have legal consequences.

The case of ROHAN AHMAD vs. State (Citation: 2022 SCMR 1511) involved the dissemination of religious beliefs through social media, including WhatsApp. The accused in this case was found to have publicly uploaded proscribed and blasphemous content through WhatsApp. The court refused bail to the accused, indicating that WhatsApp messages can be used to establish the dissemination of illegal content, including religious offences, and such evidence can lead to legal consequences.

In  ZAHEER AHMAD vs. State (Citation: 2022 SCMR 1477), the case centered around the propagation of Qadiani faith through social media, including WhatsApp. The accused was a WhatsApp group administrator where proscribed material was shared. The investigating officers conducted a detailed forensic analysis of cell phones, which revealed the accused’s involvement. The court refused bail, emphasizing that WhatsApp messages can serve as evidence in cases related to religious offences, and such evidence can lead to the denial of bail.

In the case of Syed WAQAS HASSAN RIZVI vs. State (Citation: 2022 MLD 975), WhatsApp messages played a role in a case involving criminal charges. However, the court noted that the messages reflected an unhappy and obsessive relationship between the lady and one of the accused persons. The court also considered the absence of narcotic or poisonous substances in the blood samples from the scene. It raised questions about the complainant’s motives and potential mala fide intentions. In this case, the court granted pre-arrest bail to the accused, suggesting that WhatsApp messages alone may not be sufficient to establish guilt, and other factors must be considered.

The case titled Competition Commission of Pakistan (Citation: 2022 CLD 152) involves allegations of deceptive marketing practices. WhatsApp messages were mentioned in the context of false and misleading information being disseminated through social media. The court emphasized the need for evidence to substantiate claims made in WhatsApp messages. It found that the complainant failed to conclusively prove that the deceptive WhatsApp groups were created and managed by the respondent. This case highlights the importance of providing strong evidence to support claims made in WhatsApp messages.

In ACTION AGAINST DISTRIBUTION OF DEVELOPMENT FUNDS TO MNAs/MPAs BY PRIME MINISTER (Citation: 2021 PLD 446), WhatsApp messages played a role in a constitutional petition before the Supreme Court. The case revolved around the distribution of development funds to legislators. One of the judges sought to place WhatsApp messages, received from an anonymous source, on record as evidence. However, the authenticity of the documents was questioned. The case demonstrates that WhatsApp messages, even if received anonymously, can become a part of legal proceedings and may need to be examined for their veracity.

In MUHAMMAD ISRAR vs. State (Citation: 2021 PLD 105), WhatsApp calls and video links were discussed in the context of recording evidence. The court noted that while courts are allowed to record evidence through video conferencing, there are challenges, including maintaining court decorum and supervision of witnesses. The case highlights the considerations and potential limitations associated with using WhatsApp and video links for evidence recording.

The case of MUHAMMAD USMAN vs. State (Citation: 2020 PCrLJ 705) involved the recovery of objectionable pictures through WhatsApp, leading to charges of blackmail and cheating by impersonation. The court emphasized that WhatsApp messages could be used as evidence to support allegations of blackmail and other offences. In this case, bail was denied to the accused due to the severity of the allegations and the evidence presented.

In Mir NISAR HASSNAIN RAMAL vs. State (Citation: 2018 PCrLJN 187), WhatsApp messages were mentioned in a case involving charges related to sedition and terrorism. The court considered the content of WhatsApp messages and the timing of the case’s submission. It also questioned the mala fide intentions of the prosecution. The case resulted in the grant of bail to the petitioner, highlighting that WhatsApp messages alone may not always lead to conviction, and other factors, including the intentions of the parties involved, must be considered.

In summary, these cases illustrate the varied roles that WhatsApp messages can play in legal proceedings in Pakistan. The admissibility and significance of such messages depend on the specific circumstances of each case and the supporting evidence available.

Observation Note (2) September 2023

Observation note (1): September 2023: The role of national law in protecting human rights is significant, as it serves as the primary mechanism for ensuring the rights and freedoms of individuals within a particular country. Here are the key aspects of the role of national law in human rights protection:

Legal Note: The Defence of BiPolar Disorder in Criminal Law Proceedings in Pakistan  (September 2023)

In recent Pakistani legal cases, we see that the issue of how the law views bipolar disorder in the context of criminal proceedings has been examined. These cases provide valuable insights into how the Pakistani criminal justice system approaches individuals with bipolar disorder.

The case of AKHTAR ZAMAN vs. State (2022 PCrLJ 1822) from the Peshawar High Court involved a defendant seeking bail on medical grounds, claiming to suffer from bipolar affective disorder. Notably, the accused’s mental health condition was not raised in the initial stages of the legal proceedings. It was only later, during the trial, that the accused claimed to have a mental ailment. Subsequent Medical Boards provided conflicting opinions on the defendant’s mental state. Given these contradictions and the accused’s criminal history, the court refused to grant bail on medical grounds, emphasizing the need for a clear diagnosis and consistency in such cases.

In Mst. RAHILA vs. NATIONAL ACCOUNTABILITY BUREAU (2019 PLD 96), the Karachi High Court dealt with a case where the petitioner asserted that her husband, who was facing trial under the National Accountability Ordinance, 1999, was of unsound mind due to bipolar affective disorder. However, the court found that the husband was not presently confined to a psychiatric hospital and was regularly attending trial proceedings. The court ruled that he was not of such an unsound mind that would prevent him from understanding the nature of the proceedings or making a defense. This case underscores the importance of evaluating the defendant’s current mental state during legal proceedings.

Another case, ABDUL GHAFFAR vs. State (2017 PLD 46), discussed the nature of bipolar disorder. It described bipolar disorder as a brain disorder causing unusual shifts in mood, energy, and activity levels. The court emphasized that a person suffering from bipolar disorder cannot be declared a person of unsound mind and noted that it is characterized by periods of depression and elevated mood. This decision highlights the need for a careful evaluation of mental health conditions in criminal cases.

In GHULAM MUSTAFA WASEEM vs. State (2013 PLD 643), the Lahore High Court considered a case where the accused, who claimed to suffer from bipolar affective disorder, sought bail on the grounds of unsound mind. The Medical Board’s examination revealed that the accused had bipolar affective disorder, and he was granted bail as per Section 466 of the Cr.P.C., which allows for release on bail for individuals with unsound minds.

Lastly, IRFAN UL HAQ vs. State (2012 PCrLJ 1328) dealt with an accused who moved an application under Section 466, Cr.P.C., for his release on the grounds of being of unsound mind due to bipolar affective disorder. The court observed that the accused had moments of soundness and rationality, as evidenced by his coherent statements during the trial. This case underscores the importance of assessing the defendant’s mental state at the time of the trial and considering medical opinions alongside the observations of the court.

In summary, these cases demonstrate that the Pakistani legal system takes a cautious approach when dealing with individuals claiming to have bipolar disorder. The courts emphasize the need for a thorough evaluation of the defendant’s current mental state, considering both medical assessments and the defendant’s behavior during legal proceedings. Consistency in the presentation of mental health issues and the impact on the defendant’s ability to understand and participate in legal proceedings are key factors in determining the outcome of such cases.

Archives from International General Queries on Drafting Contracts (published September 2023)

Limitation on liability for ‘Intentional or criminal misconduct or wilful violation of this Agreement.’

Q1: I have encountered a contractor request for a limitation on liability for “intentional or criminal misconduct or willful violation of this Agreement”? What is your view on this ?

A1: It is indeed a rare request, and generally, it would be considered inappropriate to include such an explicit limitation of liability in a contract. Whether such a limitation is enforceable would depend on the applicable law and jurisdiction. Under Dutch law, for instance, such a limitation might be null and void, especially if it goes against public order or good morals. In most cases, it’s not advisable to accept such a limitation, unless it pertains to an industry where there’s a fine line between expected behavior and performance, and the customer requires a specific behavior, shifting related risks and liabilities to that party. Even then, enforceability might remain a concern.

Follow up from Querent Q2: Is there a reasonable reason for a limitation of that nature that I’m just not seeing?

A2: One possible scenario where such a limitation could be used is as a preamble to a broader limitation of liability section. For instance, it might read, “Except for Intentional or Criminal Misconduct of Seller or willful violation of the agreement by Seller, Seller’s liability shall not exceed….” However, from a legal and business perspective, there is no reasonable reason to agree with such a request, and it can be deemed inappropriate. It’s essential to engage in negotiations when faced with such non-standard provisions, especially if they lack a strong justification.

Follow up from Josh and Mak International Q3: Have you asked them why they want this limitation?

A3: Indeed, we have inquired about their reasoning behind such requests. In most cases, such requests cannot be justified, neither legally nor from a business standpoint. They pose significant risks for the company, as they may discourage the counterparty from acting in compliance with the agreement. It’s crucial to firmly reject such requests, and it’s worth noting that many national laws may render such clauses unenforceable. For instance, Italian law prohibits the limitation of damages caused by gross negligence or willful misconduct.

Follow-up from Querant Q4: Are there alternative ways to address limitations on liability?

A4: Certainly, one alternative approach is to consider limitations on liability that focus on direct damages. For example, in a situation where a supplier fails to deliver, the limitation could cover the excess cost of re-procurement. However, in cases where a contractor starts work and then abandons it, you might need to account not only for re-procurement costs but also the expenses related to correcting any faulty work that was done. So, in some instances, you might require more comprehensive limitations on liability to safeguard your interests.

Follow up from Querent Q5: Are there specific scenarios where limitations on gross negligence or willful misconduct might be justified?

A5: In certain international oil joint operating agreements (JOA), limitations on gross negligence or willful misconduct may be tailored to apply only to senior supervisory personnel. This approach is often taken in regions where hiring local national personnel is mandated, even if their training is questionable. Additionally, some petroleum projects are located in areas with complex socio-political dynamics, where ethnic, tribal, or religious tensions can lead to safety concerns. In such cases, operators might opt for limited liability for accidents resulting from issues unrelated to safe operations, such as sabotage. However, it’s crucial to acknowledge that blanket limitations on gross negligence or willful misconduct may not be enforceable in many jurisdictions.

In conclusion, navigating limitations on liability, especially when it comes to intentional or criminal misconduct, requires a careful evaluation of legal, ethical, and business considerations. Such provisions should be approached with caution and thoroughly scrutinized to protect the interests of all parties involved.

Clause for specific performance in contracts for personal services, despite courts often being reluctant to enforce such clauses.

Q1: Does it make sense to include the clause of specific performance in contracts for personal services even though courts are reluctant in enforcing such a clause?

A1: Including a specific performance clause in contracts for personal services can be a complex decision and often depends on the jurisdiction and specific circumstances. Here are some insights:

• Consider Jurisdiction: In some jurisdictions, including such a clause may be deemed misleading and deceptive if it’s known to be unenforceable. It’s essential to understand the legal landscape in your jurisdiction.
• Courts’ Reluctance: Courts are generally reluctant to enforce specific performance for personal service contracts because they consider money damages as an adequate remedy. This is based on the principle that forcing an individual to perform personal services may not be practical or equitable.
• Alternative Approach: Instead of specific performance, you can consider contractual provisions that stipulate that only a specified individual or company can perform the work under the contract. This can help protect against subcontracting or assigning the work to someone else.
• Context Matters: The appropriateness of a specific performance clause can depend on the nature of the personal service. For example, it might make sense for hiring a high-profile entertainer like Beyoncé but may not be applicable to most personal service contracts.
• Equitable Remedy: In some legal systems like English law, specific performance is an equitable remedy. Courts may have the discretion to grant specific performance when damages wouldn’t provide an adequate remedy. This depends on the specifics of the case.
• Added Value: Consider whether the party you’re contracting with brings unique value to the performance that couldn’t be easily replaced. If their contribution is irreplaceable, a specific performance clause might be more justifiable.

In conclusion, the decision to include a specific performance clause in personal service contracts should be made carefully, taking into account the jurisdiction, the specific nature of the service, and the potential added value it brings to the contract. It’s also crucial to understand that the enforceability of such clauses can vary widely, and in some cases, damages may be the more practical solution.

Difference between the “right of lien” and the “right of retention,”

Q1: Is there any difference between the “right of lien” and the “right of retention,” or are they synonymous?

A1: The “right of lien” and the “right of retention” are distinct legal principles, and they are not synonymous. Here’s a breakdown of the differences:

• Right of Lien: The right of lien typically involves a situation where a party retains possession of goods or property until a debt or payment is settled. This right is often statutory and can be applied unilaterally. For example, a garage might hold onto your car until you pay for the repairs. It’s usually a mechanism used to secure payment for services or work performed on the property.
• Right of Retention: The right of retention, on the other hand, pertains to withholding property or goods due to a contractual or legal entitlement. It’s not necessarily tied to possession but rather ownership. For instance, a seller may retain ownership of goods until the buyer has fully paid for them. This is often governed by contractual agreements or laws related to property rights.

It’s crucial to distinguish between these two concepts, as they have different legal implications and applications. In some cases, the right of retention may involve holding property or goods in possession, but it primarily concerns ownership and the conditions under which ownership is transferred.

Additionally, it’s important to be aware of the specific legal terminology and regulations in your jurisdiction, as the terminology and rules related to lien and retention can vary from one place to another. Careful drafting of contracts is essential to ensure that the rights and obligations of the parties involved are clearly defined and compliant with the relevant laws.

Q1: What is the difference between the “Right of lien” and the “Right of retention”?

A1: The “Right of lien” and the “Right of retention” are distinct legal principles. The main difference lies in control and ownership. A lien involves retaining possession of goods or property until a debt is paid, whereas retention concerns withholding ownership until certain conditions, often contractual, are met.

Q2: Can anyone exercise the right of lien and the right of retention?

A2: Generally, the right of lien is often applied by a creditor (such as a service provider) who retains control of goods or property until payment is received. In contrast, the right of retention may be exercised by owners who withhold ownership rights until specified conditions are fulfilled, whether by law or contract.

Q3: Are there ethical considerations related to the right of lien or retention?

A3: In some cases, ethical considerations come into play. For example, lawyers typically do not have the right of lien or retention over their client’s files for unpaid fees. They usually address unpaid fees through legal actions rather than withholding documents.

Q4: How can businesses protect their interests when drafting contracts involving these rights?

A4: Businesses can protect their interests by carefully drafting contracts. For instance, they can include lien-waiver clauses to prevent contractors from applying liens over their property. Additionally, they can incorporate clear language to ensure that goods subject to retention are recoverable in case of non-compliance or insolvency.

Q5: Do these rights have equivalents in different legal systems?

A5: Yes, these rights have equivalents in various legal systems. For instance, the right of lien in France is referred to as “droit de rétention,” where a seller can withhold goods until payment. The right of retention for certain privileged creditors, like tax debts or unpaid employees, is known as “droit de suite.” Contracts may also include a “clause de reserve de propriété” for ownership retention.

Q6: What happens if a right of retention is incorporated into a fixture or another product?

A6: If a right of retention is incorporated into another product or becomes part of a fixture, it may fail. To avoid this, it’s essential to include appropriate wording in contracts to ensure that the goods subject to retention remain recoverable in various scenarios.

Q7: Are there advantages to requiring upfront payment in contracts?

A7: Requiring upfront payment in contracts can be a better policy to avoid the complexities and potential disputes associated with liens and retentions. Many businesses, like criminal defense lawyers and contingent fee-based tort lawyers, often demand upfront payments or settlements to ensure they are compensated for their services without relying on these legal mechanisms.

Follow up question: legal implications when the seller no longer has possession of goods covered by the right of retention, especially concerning the recovery of money from the resale of these goods:

• Automatic Right to Recover Money: In many legal systems, when a seller has a valid right of retention over goods, and those goods are subsequently sold by the purchaser to a third party, the law often automatically vests in the seller the right to recover the money from the resale. This is typically a statutory provision that doesn’t require specific agency-type wording in the contract.
• Recovery from Third Party: You are correct in noting that the third party who purchased the goods from the initial purchaser is generally not obliged to return the goods to the seller. However, there’s an important caveat: if the third party bought the goods in bad faith, knowing that a retention right was attached to the goods at the time of resale, they may be subject to legal consequences.
• Fairness in Third-Party Transactions: The principle that the third party can keep the goods purchased from the initial purchaser unless they had knowledge of the retention right is rooted in fairness. It protects innocent third parties from unknowingly becoming entangled in disputes between the seller and the initial purchaser. If the third party had no reason to suspect that the goods were subject to a retention right, they are typically not required to return the goods.
• Legal Framework: The specifics of how these situations are handled can vary based on the legal framework of each jurisdiction. It’s essential for parties involved in such transactions to understand their rights and obligations under the relevant laws and contracts.

To conclude the law often provides sellers with the automatic right to recover money from the resale of goods subject to a right of retention. However, the return of the goods themselves from third parties is usually contingent on whether the third party purchased the goods in good faith or with knowledge of the retention right, which aims to strike a balance between protecting the seller’s interests and ensuring fairness in third-party transactions.

FAQs on Drafting Contracts: Contact Information for Notices

Q1: In business contracts, what is the better contact email address for notices: a personal name@company website, info@company website, or marketing@company website?

A1: The choice of contact email address for notices in business contracts depends on various factors. Here are some insights:

• Individual Name: Using a personal name (e.g., john@company.com) is often not recommended because people change positions or leave the company, leading to outdated contact information. It can also create uncertainty in the event of disputes.
• Info@ or Marketing@: Addresses like info@company.com or marketing@company.com may not be suitable for notices in contracts, as they are typically used for general inquiries or marketing purposes. They may not be regularly monitored for important contractual notifications.
• Consider the Notices Clause: Whether to include a notices clause at all should depend on the specific needs of the contract. In many cases, the day-to-day people involved in the contract can find each other without a formal notices clause. However, in complex contracts with multiple stakeholders, it may be prudent to include a notices clause.

Q2: Is it advisable to use a personal name for receiving legal notices in a contract?

A2: Using a personal name for receiving legal notices in a contract can be problematic because personnel may change roles or leave the company, rendering the contact information outdated. It’s often more practical to use a position or title, such as “General Counsel” or “Contract Manager,” as they are less likely to change frequently.

Q3: How can I ensure that legal notices are effectively sent and received in contracts?

A3: To ensure effective communication of legal notices, consider these approaches:

• Use a position or title (e.g., Contract Manager, General Counsel) rather than personal names.
• Include both a postal address for physical notices and a CC email address for electronic notifications.
• Specify in the contract the preferred mode of communication for legal notices (e.g., registered mail, email).
• Keep contact information up to date and regularly review and update the notices clause as needed.

Q4: When are legally effective notice provisions important in contracts?

A4: Legally effective notice provisions become crucial when parties have stopped communicating effectively or when a dispute arises. These provisions help ensure that critical information, such as breach notifications or contract termination, reaches the intended parties in a legally recognized manner. They become especially important if the matter proceeds to formal dispute resolution.

Q5: What is the role of a notices clause in a contract?

A5: A notices clause in a contract specifies how and where important communications and legal notices should be sent. It helps streamline communication between parties and ensures that contractual obligations and rights are upheld. When disputes arise or formal actions are required, the notices clause provides clarity on how notifications should be delivered, enhancing the contract’s enforceability.

Q&A on Drafting Contracts: CGL and Waiver of Workers’ Comp (WC) Immunity through Indemnity

Q1: In some U.S. states, employers can waive protection against employee lawsuits in case of work-related incidents covered by Workers’ Comp (WC) insurance. Does Commercial General Liability insurance (ISO Form CG 00 01 04 13) coverage get triggered when a WC claim against an Indemnified Party (such as a General Contractor or Client) by a Subcontractor’s employee is tendered back to the Subcontractor due to the Subcontractor’s duty to indemnify coupled with a waiver of WC immunity?

A1: Yes, the triggering of Commercial General Liability (CGL) insurance coverage depends on several factors:

• CGL Policy of Subcontractor (Sub): The CGL policy of the subcontractor may be triggered if it includes contractual liability coverage for parties indemnified by the sub, such as the general contractor (GC) and the client.
• Additional Insured (AI) Status: If the GC and client have AI status under the sub’s CGL policy, this status can provide coverage for claims made by the sub’s employee.
• Nature of the Claim: The claim made by the sub’s employee should not be considered a WC claim against the indemnitee (GC or client) unless the employee falls under specific legal categories like a borrowed servant or statutory employee of the indemnitee.
• Alternate Employer Endorsement: In some cases, the GC or client may require an alternate employer endorsement for the WC/EL (Employer’s Liability) policy, treating them as the payroll employer for scenarios involving subcontractors.

It’s important to note that the payment of employee claims by their employer is a matter of employment law and insurance, while CGL insurance may come into play when there are contractual indemnification obligations. However, CGL coverage may be subject to any contractually agreed-upon limits on liability.

Q2: Can a company waive carrying WC insurance, and what happens if they do?

A2: While companies can often choose whether or not to carry Workers’ Comp (WC) insurance, most states have laws that require employers to provide WC coverage for their employees. If a company were to waive WC insurance where allowed, injured employees would no longer be limited to filing claims under WC. In such cases, injured individuals may pursue personal injury lawsuits, and the company’s Commercial General Liability (CGL) insurance could come into play for coverage.

Q3: What happens if a subcontractor (SC) waives immunity under a Workers’ Comp law in an indemnification agreement with a client?

A3: If a subcontractor (SC) waives immunity under a Workers’ Comp law in an indemnification agreement with a client, it generally means that the SC agrees not to invoke WC immunity as a defense against claims arising from work-related injuries. If an SC’s employee gets injured and sues the client for passive negligence (e.g., failure to provide a safe work environment), and the client invokes the indemnification clause, the SC’s Commercial General Liability (CGL) coverage may be triggered, provided the subcontract qualifies as an “insured contract.” The CGL’s “Employer’s liability exclusion” would not apply in this scenario.

Q4: How does the additional insured (AI) status affect the coverage in such scenarios?

A4: Having additional insured (AI) status under the subcontractor’s CGL policy can be advantageous for the client. If the client is an AI, it may receive direct coverage under the subcontractor’s CGL policy for claims made by the subcontractor’s employee. AI status ensures that defense costs are covered over and above indemnity limits in the policy, providing an added layer of protection for the client.

Q5: Is there a limit on liability in contracts between a general contractor (GC) and a client that could affect the coverage under the subcontractor’s CGL policy?

A5: Yes, there may be a limit on liability specified in the contract between the general contractor (GC) and the client. This limit could affect the coverage provided under the subcontractor’s CGL policy. It’s essential for all parties involved to carefully review the contract terms and understand how they impact the insurance coverage and potential liability in case of claims.

In summary, understanding the complex interplay between Workers’ Comp immunity waivers, indemnification clauses, Commercial General Liability (CGL) insurance, and contractual obligations is essential when drafting contracts involving subcontractors and clients in the context of work-related injuries and claims. 

Q&A on Drafting Contracts: Understanding CGL “Insured Contract” and Indemnity

Q1: What does the term “Insured Contract” cover explicitly in a Commercial General Liability (CGL) policy?

A1: In a CGL policy, the term “Insured Contract” explicitly covers specific types of contracts and agreements. These include lease of premises, sidetrack agreements, easement or license agreements, indemnity to a municipality, and elevator maintenance agreements.

Q2: Can a CGL policy cover contracts pertaining to the named insured’s business under which they assume the tort liability of another party?

A2: Yes, a CGL policy can provide coverage for contracts pertaining to the named insured’s business under which they assume the tort liability of another party. This coverage is not limited to specific industries and can extend to various types of contracts where one party assumes the liability for another’s actions.

Q3: What is the significance of the phrase “arising out of” in the context of indemnity for death?

A3: The phrase “arising out of” is crucial in the context of indemnity for death. It implies that the indemnity extends to liabilities and claims that have a causal connection or relationship to the activity or contract in question. This means that indemnity can cover death-related claims if they can be traced back to the actions or events arising from the contract.

Q4: How common are activity-based indemnities in contracts, and what risks do they entail?

A4: Activity-based indemnities are not uncommon in contracts. These provisions may obligate one party to indemnify another for a wide range of activities or events. However, they can pose significant risks, especially if not carefully reviewed and negotiated. Indemnifying parties should be cautious, as such provisions may extend to situations where the other party’s negligence is involved.

Q5: How can the inclusion of another party as an additional insured (AI) impact indemnity clauses?

A5: Including another party as an additional insured (AI) on your insurance policy without limiting the AI’s status to liability assumed by you under the contract can impact indemnity clauses significantly. In such cases, the AI may bypass the indemnity clause and directly invoke the CGL policy of the named insured for claims, including those related to death. This has complex implications and may affect CGL policy terms, including potential cancellation or higher premiums.

Q6: Can indemnity cover incidents resulting in death, and what conditions should be met for such indemnity?

A6: Indemnity can cover incidents resulting in death under certain conditions. Generally, for such indemnity to be valid, the act during the performance of which the incident occurred should be lawful. Death injuries can be indemnified through insurance, as they typically don’t fall under exception categories, unlike limitations of liability.

Q7: Why is it important for lawyers and contract drafters to understand the scope and implications of indemnity clauses beyond negligence?

A7: Understanding the scope and implications of indemnity clauses beyond negligence is crucial because contracts can involve a wide range of liabilities and scenarios. Relying solely on indemnity for negligent acts may not adequately protect parties in complex business situations. I

Q&A on Drafting Contracts: Rescission in Power Purchase Agreements (PPAs)

Q1: What are the instances where a purchaser might seek to rescind a Power Purchase Agreement (PPA) due to a change in technology?

A1: Instances where a purchaser might consider rescinding a Power Purchase Agreement (PPA) due to a change in technology could include situations where the technology used in the PPA becomes obsolete or no longer economically viable for the purchaser. This can happen when advancements in technology render the original PPA terms disadvantageous for the purchaser.

Q2: Can a purchaser typically terminate a PPA without cause if their industry becomes obsolete, and they are unable to purchase the power specified in the agreement?

A2: In many cases, a PPA may not include a provision for the purchaser to terminate the agreement without cause. However, if the purchaser’s industry becomes obsolete, and they are unable to utilize the power specified in the agreement, they may be in a challenging situation. Negotiating with the supplier for an amicable settlement might be the best course of action before considering other options, such as bankruptcy.

Q3: What options does a purchaser have if they are unable to fulfill their obligations under a long-term PPA due to changes in technology or market conditions?

A3: If a purchaser finds themselves unable to fulfill their obligations under a long-term PPA due to changes in technology or market conditions, they should first review the terms of the agreement to see if there are any termination or renegotiation clauses that apply. If not, negotiating with the supplier for a possible resolution is a recommended step. In more extreme cases, filing for bankruptcy protection might be considered, but this should be a last resort.

Q4: What should be considered when drafting a Power Purchase Agreement to address the possibility of technological changes affecting the purchaser’s ability to fulfill the agreement?

A4: When drafting a Power Purchase Agreement, it’s essential to consider including clauses that address the possibility of technological changes affecting the purchaser’s ability to fulfill the agreement. This might involve specifying termination conditions or renegotiation mechanisms in case the technology becomes obsolete or economically unviable for the purchaser.

Q5: In the context of a PPA, what are some considerations for addressing potential changes in technology or industry obsolescence in the agreement?

A5: When addressing potential changes in technology or industry obsolescence in a PPA, it’s important to:

• Include termination or renegotiation clauses that account for these changes.
• Define the circumstances under which the purchaser can seek modifications to the agreement.
• Specify the process for negotiating changes, including dispute resolution mechanisms.
• Consider the financial implications for both parties in case of termination or modification.
• Ensure that the agreement provides flexibility to adapt to evolving technological and market conditions.

Q6: Can bankruptcy be a viable option for a purchaser stuck in a long-term PPA when their industry becomes obsolete?

A6: Bankruptcy can be a viable option for a purchaser stuck in a long-term PPA when their industry becomes obsolete. In such cases, filing for bankruptcy protection might help the purchaser address their contractual obligations, especially if they are unable to fulfill the PPA and negotiate a resolution with the supplier. However, bankruptcy should be considered carefully and as a last resort, as it has significant legal and financial implications.

Q&A on Contract Drafting Styles: Prescriptivist vs. Descriptivist

Q1: What are the key differences between prescriptivists and descriptivists in contract drafting?

A1: Prescriptivists and descriptivists represent two different approaches to contract drafting. Prescriptivists prefer a more traditional and strict approach, favoring words like “shall” and seeking to eliminate ambiguity. Descriptivists, on the other hand, take a more descriptive and flexible approach, allowing for language that reflects the real-world understanding of the parties, even if it might be considered less precise.

Q2: Can you provide an example of a word or phrase often debated in contract drafting, such as “shall” or “and/or”?

A2: Certainly. “Shall” is a classic example. Prescriptivists argue that it should be used to indicate a mandatory obligation, while descriptivists might argue that it can lead to ambiguity and prefer using language that directly conveys the parties’ intentions, such as “must” for mandatory obligations.

“And/or” is another contentious phrase. Prescriptivists often discourage its use due to potential ambiguity, while descriptivists might argue that it can accurately reflect the parties’ intent in certain situations.

Q3: Why do certain ambiguous words and phrases persist in contract drafting, despite efforts to eliminate them?

A3: Ambiguous words and phrases persist in contract drafting because language is dynamic, and contracts must often reflect the evolving understanding of parties and courts. Additionally, some ambiguity is intentional, as parties may want flexibility or room for interpretation in certain clauses. While efforts are made to draft contracts with clarity, the complexities of transactions and the desire to account for various scenarios can lead to persistence of ambiguity.

Q4: Is there a specific type of contract where ambiguity is particularly persistent?

A4: Insurance contracts, such as Commercial General Liability (CGL) policies, are known for their persistence of ambiguity. These contracts often involve complex scenarios and a wide range of potential claims. As a result, they may use language that appears ambiguous to account for various contingencies, making them a unique challenge for both prescriptivists and descriptivists.

Q5: How does the choice of governing law impact contract drafting styles?

A5: The choice of governing law is crucial in contract drafting. Different jurisdictions have varying legal standards and interpretations of contract language. Drafters must have a solid understanding of the chosen governing law to ensure that the contract is enforceable and reflects the parties’ intentions. Knowledge of the applicable law helps in crafting language that aligns with legal principles and expectations in that jurisdiction.

Q&A on the Importance of Governing Law in Contract Drafting

Q1: Why is it crucial to understand the governing law when drafting contracts?

A1: Understanding the governing law is essential because it dictates how a contract will be interpreted and enforced. Different legal systems and jurisdictions have their own rules and standards for contract language. Failing to align the contract with the appropriate governing law can lead to disputes, unenforceable terms, or unintended consequences.

Q2: Can you provide an example of how the choice of governing law can impact contract drafting?

A2: Certainly. Let’s say you’re drafting a contract for an international transaction between parties from the United States and the United Kingdom. The choice of governing law (U.S. law vs. U.K. law) will determine how terms like “best endeavors” or “reasonable efforts” are interpreted. In the U.S., these terms may be considered similar, but in the U.K., they can have distinct meanings. Failing to use the appropriate term according to the chosen governing law could lead to misunderstandings and disputes.

Q3: What challenges can arise when drafting contracts that are subject to multiple jurisdictions?

A3: Drafting contracts subject to multiple jurisdictions can be complex. In such cases, it’s crucial to clearly specify which jurisdiction’s law governs different aspects of the contract. Failure to do so can result in conflicts between legal systems, making it challenging to determine which laws apply to specific clauses or disputes.

Q4: Are there instances where seemingly subtle distinctions in contract language can have significant effects?

A4: Yes, seemingly subtle distinctions in contract language can indeed have significant effects, especially in international transactions. For example, the use of different terms for the same concept, like “best endeavors” vs. “reasonable efforts,” can lead to varying interpretations and potential disputes. It’s essential to be aware of these nuances and ensure that the contract language aligns with the chosen governing law.

Q5: How can parties drafting international contracts navigate these differences in governing law effectively?

A5: Parties drafting international contracts should consult with legal experts who are knowledgeable about the governing law in both jurisdictions involved. Clear and precise language should be used to specify which jurisdiction’s law applies to different aspects of the contract. Additionally, parties should be aware of the potential differences in terminology and interpretation and strive for clarity to minimize the risk of disputes arising from these distinctions.

Q&A on the Principle of “It’s Always Been Done This Way” in Contract Drafting

Q1: What does the principle of “it’s always been done this way” mean in contract drafting?

A1: This principle essentially refers to the tendency to follow established practices and precedents in contract drafting. It suggests that certain terms, clauses, or language have become customary in contracts due to historical usage, and parties often include them because they are the accepted norm.

Q2: Are there any exceptions or limitations to this principle in contract drafting?

A2: Yes, there are a couple of exceptions to this principle. First, insurers may disapply this rule if there is a large claim involved. In such cases, the standard practices may be set aside to address the unique circumstances of a significant claim. Second, this principle always applies “unless the insurer says so,” meaning that insurance contracts may deviate from standard practices if explicitly stated in the policy.

Q3: How does the principle of “it’s always been done this way” relate to insurance contracts?

A3: In the context of insurance contracts, this principle is particularly relevant. Insurance policies often have standardized language and clauses that have evolved over time. Insurers and industry professionals typically adhere to these standards unless there are compelling reasons to deviate from them.

Q4: Can you provide an example of how this principle operates in insurance contracts?

A4: Certainly. Take the standard terrorism exclusion in insurance policies. This exclusion is widely used in the insurance industry and has been thoroughly reviewed and vetted by various experts and committees. It is considered the norm for excluding coverage related to acts of terrorism. However, as the nature of risks evolves, such as in the case of cyberattacks, there may be discussions about revising or adapting these standard clauses to address new challenges.

Q5: How does this principle apply to the evolving field of cyber insurance?

A5: In the field of cyber insurance, the principle of “it’s always been done this way” is being challenged due to the changing landscape of cyber risks. Traditional insurance clauses may not adequately cover all aspects of cyberattacks, leading to discussions about revising standard clauses to address property damage caused by cyber incidents, for example. This illustrates that even in well-established fields like insurance, contract language may need to evolve to reflect current realities.

Question on Power Purchase Agreements (PPAs) from the independent energy generator’s perspective in a developing country:

Q&A on Power Purchase Agreements (PPAs) in Developing Countries

Q1: What are the most common risks that an independent energy generator should identify, remove, or mitigate when reviewing a Power Purchase Agreement (PPA) in a developing country?

A1: Common risks to address in a PPA include:

• Commitment on available capacity or uptime.
• Termination clauses and obligations, especially in case of power outages.
• Fixed and variable pricing components.
• Liquidated damages and force majeure provisions.
• Independent testing of capacity.
• Termination for various reasons, including bankruptcy, default, or convenience.
• Scheduled outages, maintenance, and emergencies.
• Change of law or rates.
• Warranty, indemnity, insurance, and liability limits.
• Sovereign immunity waivers.

Q2: How can the risk of regular power outages in a developing country be fairly allocated between the seller and purchaser in a PPA?

A2: Fair allocation of power outage risk can involve:

• Clearly defining the responsibilities of both parties during outages.
• Ensuring that the PPA includes provisions for planned shutdowns, maintenance, and communication of expected outages.
• Allowing for flexibility in the agreement to accommodate unexpected outages or changes in the grid system.
• Establishing a dispute resolution mechanism to address disputes related to outages fairly.
• Consideration of minimum guaranteed take by the buyer and excusable delay clauses related to force majeure events.

Q3: What other critical considerations should be taken into account when negotiating a PPA in a developing country?

A3: Important considerations in negotiating a PPA include:

• Minimum guaranteed take by the buyer.
• Flexibility to sell power to third parties when necessary.
• Revision of pricing based on market trends.
• Pre-commissioning flexibility to sell capacity to third parties.
• Lender’s step-in rights in case of project financing.
• RoFR (Right of First Refusal) clauses.
• Mechanisms for addressing off-take failures by the buyer.

Q4: How can an independent energy generator protect its interests in case the buyer fails to off-take power as per the PPA?

A4: To protect their interests, the generator can include provisions that allow them to:

• Sell excess power to third parties.
• Impose fixed cost obligations on the buyer in case of non-off-take.
• Define lender’s step-in rights in case of financing.
• Address disputes related to off-take failures through dispute resolution mechanisms.

Q5: Are there any specific clauses or terms that should be carefully negotiated in a PPA in a developing country?

A5: Yes, specific clauses to pay attention to include those related to:

• Termination and exit strategies.
• Pricing and rate adjustments.
• Force majeure provisions.
• Insurance requirements and liability limits.
• Flexibility in selling power to third parties.
• Communication and response protocols during power outages.
• Rights of the lender in project financing scenarios.

These considerations can vary depending on the specific circumstances and the regulatory environment of the developing country in question.

 Enforcing regulations and applying them under a contract:

Q&A on Enforcing Regulations vs. Applying Them in Contracts

Q1: Is there a practical difference between enforcing regulations and applying them under a contract?

A1: Yes, there can be practical differences between these terms in a contract. Enforcing regulations typically implies taking active steps to ensure compliance with the regulations, which may involve monitoring, reporting, and penalizing violators. Applying regulations, on the other hand, might suggest a passive role in merely acknowledging and following the regulations without necessarily taking proactive steps to ensure compliance. The distinction can be significant when it comes to the obligations and liabilities of the parties involved.

Q2: When there are significant differences between potentially applicable laws, should contracts be explicit about regulatory compliance?

A2: Yes, it’s advisable to be explicit about regulatory compliance in contracts, especially when dealing with multinationals or complex regulatory environments. Explicit clauses can help ensure that both parties are on the same page regarding their obligations and responsibilities in adhering to various laws and regulations. This clarity can be crucial in avoiding disputes and facilitating smooth contract execution.

Q3: In a contract involving a government entity, should the government’s obligation to enforce regulations be specified as “enforce” or “enforce and apply”?

A3: The choice between “enforce” and “enforce and apply” may depend on the specific context and the desired level of commitment. “Enforce” typically implies taking action against violations, whereas “enforce and apply” could suggest a broader commitment to both ensuring compliance and actively implementing the regulations. It’s essential to clearly define these terms within the contract to avoid misinterpretation.

Q4: What legal implications might arise from using “enforce” vs. “apply” in a contract with a government entity?

A4: The legal implications can vary based on the interpretation of these terms and the regulatory framework in the jurisdiction. “Enforce” may imply a duty to actively penalize violators, while “apply” could be seen as a commitment to implementing the regulations without specifying enforcement measures. Careful drafting is crucial to ensure that the government’s obligations align with the desired outcomes and legal requirements.

Q5: Should contracts include a warranty for compliance with all applicable laws and regulations?

A5: Including a warranty for compliance with all applicable laws and regulations is a prudent practice. Such a warranty provides a separate cause of action for the contracting party if the counter-party fails to adhere to the regulations. However, in some cases, contractual provisions may not be sufficient, and external monitoring or regulatory checks may also be necessary to ensure compliance.

Q6: How much weight does a contractual provision hold when telling a regulator to create or enforce a law?

A6: The weight of a contractual provision in influencing a regulator’s actions can vary widely depending on the jurisdiction and the specific circumstances. In many cases, a contract alone may not be sufficient to compel a regulator to create or enforce a law. Regulatory authorities typically operate independently and are governed by their own legal frameworks and mandates. Contractual provisions may serve as agreements between private parties but may not directly bind government agencies to specific regulatory actions.

Q&A on Contracts Involving Government Discretion and Legislation

Q1: Can contracts obliging a government entity to exercise its discretion under legislation in a specific way be legally enforced?

A1: Contracts that obligate a government entity to exercise its discretion in a specific manner may not be legally enforceable in many jurisdictions. Government entities often have statutory discretion to make decisions based on circumstances, and binding them to a particular decision may contravene their legislative obligations. Such contracts may even risk being considered illegal or void as they attempt to dictate government actions.

Q2: How can parties address this issue in contracts involving government discretion?

A2: To address this issue, contracts can include clauses that do not directly dictate or warrant a specific government decision. Instead, these clauses can stipulate financial compensation to the non-government party or provide the option to terminate the contract if the government’s exercise of discretion deviates from what the parties originally expected when entering into the contract. This approach allows for flexibility while protecting the interests of both parties.

Q3: What is the purpose of including a compensation or termination clause in such contracts?

A3: The inclusion of a compensation or termination clause serves several purposes. First, it acknowledges the government’s statutory discretion and avoids creating a binding obligation to make specific decisions. Second, it provides a mechanism for the non-government party to seek redress or exit the contract if the government’s actions are inconsistent with their mutual expectations. This approach strikes a balance between respecting government discretion and protecting contractual interests.

Q4: Are similar legal principles applicable in other common law countries?

A4: Yes, similar legal principles are often applicable in other common law countries. These principles recognize the limits of contracts in attempting to control government discretion under legislation. Government entities in various jurisdictions typically have legal obligations to exercise their discretion impartially and in accordance with the law. Contracts that try to dictate specific government decisions may encounter legal challenges or be deemed unenforceable.

Q5: How should parties approach negotiations and drafting when government discretion is a key element of the contract?

A5: Parties involved in contracts where government discretion plays a significant role should approach negotiations and drafting with care. It’s essential to understand the limitations imposed by legislation on government actions. Rather than attempting to bind government decisions, focus on creating contractual mechanisms that protect the parties’ interests, such as compensation provisions or exit options if government discretion diverges from expectations.

Q6: Can government entities still be held accountable for their actions under such contracts?

A6: While government entities may have discretion in making decisions, they can still be held accountable under the terms of the contract. If the contract includes compensation or termination clauses for deviations from expected actions, the non-government party has legal recourse to seek remedies or exit the contract if necessary. These mechanisms help maintain a level of accountability while respecting government discretion.

Q&A on Important Points in Drafting Design and Build Contracts

Q1: Where can I find resources for drafting design and build contracts?

A1: You can start by obtaining a copy of the FIDIC Yellow Book, which is their standard Design-Build contract. It’s available for purchase and provides a comprehensive framework for such contracts. Additionally, there are many articles and textbooks on this topic, along with various standard forms like JCT and the Design-Build Institutes of America and Canada contracts. The choice of which resource to use depends on the project type, location, and parties’ risk tolerance.

Q2: What are some essential points to consider when drafting design and build contracts?

A2: When drafting design and build contracts, several key considerations are vital:

• Clearly define project specifications and scope of work.
• Ensure that any changes to the project are documented through written change orders.
• Address conflicts and inconsistencies that may arise between the legal, commercial, and technical components of the contract.
• Establish a robust design review process.
• Plan for the transition to the owner’s operation and maintenance.
• Collaborate closely between lawyers and engineers, especially when drafting performance guarantees.
• These considerations are crucial to the success of a design and build contract.

Q3: Are there differences between standard forms for building works and civil works in design and build contracts?

A3: Yes, there can be differences between standard forms for building works and civil works in design and build contracts. For civil works, contracts like FIDIC are commonly used, while JCT is often applied to building works. Another option is the NEC3 suite of contracts, which includes provisions for both types of projects. The choice depends on the specific project, its location, and whether it involves civil or building works.

Q4: Can you explain the role of collateral warranties in design and build contracts?

A4: Collateral warranties are commonly used in design and build contracts to transfer obligations and liabilities from subcontractors. In some cases, the main contractor may seek to impose similar obligations and liabilities upon each subcontractor as those it has with the client. However, this can lead to disproportionate obligations. An alternative approach is to use novation agreements. Each subcontractor, the main contractor, and the end-customer can enter into novation agreements for each contract. This approach simplifies the process of transferring rights and responsibilities and avoids creating imbalanced obligations among parties.

Q5: What is the significance of distinguishing between the Core Conditions and Works Documents in design and build contracts?

A5: In design and build contracts, distinguishing between the Core Conditions and Works Documents is crucial. The Core Conditions typically set out the general terms and conditions of the contract, while the Works Documents contain project-specific details, including design, specifications, and scope of work. This separation allows for flexibility and customization, ensuring that project-specific requirements are adequately addressed while maintaining a consistent framework for contract administration. It helps avoid conflicts and provides clarity on the overall contractual structure.

Q&A on Limitation of Liability and Indemnification in Contracts

Q1: Does the Limitation of Liability (LOL) also automatically cap the liability for indemnification under the same contract?

A1: The impact of a Limitation of Liability (LOL) clause on indemnification within the same contract depends on how the contract is drafted and the specific language used. Generally, if the LOL clause does not contain carve-outs or specific language exempting indemnities, it may apply to indemnification claims. However, it’s essential to carefully review the entire contract to understand how LOL interacts with other clauses.

Q2: Are there specific carve-outs that should be considered in the LOL clause regarding indemnification?

A2: Yes, it’s common to include carve-outs in the LOL clause to exclude certain liabilities from the limitation. These carve-outs should be explicit and tailored to the specific needs of the parties. For example, carve-outs may be necessary for indemnities related to intellectual property rights infringement, breaches of confidentiality, or specific warranties. The goal is to ensure that these indemnities are not subject to the caps imposed by the LOL clause.

Q3: How should LOL and indemnification clauses be drafted to avoid ambiguity?

A3: To avoid ambiguity and ensure that LOL and indemnification clauses operate as intended, the contract should clearly state whether indemnities are subject to LOL caps or not. For example, the contract can expressly mention that certain indemnities are exempt from LOL limitations. Clarity in language and precise drafting is essential to avoid disputes and legal uncertainties.

Q4: Can you provide an example of a well-drafted LOL clause with carve-outs for indemnification?

A4: Certainly, here’s an example of a well-drafted LOL clause with carve-outs for indemnification:

“The total aggregate liability of Party A under this contract, including any attorney fees and litigation or arbitration expenses, is limited to the amount of compensation actually paid by Party B to Party A under this Contract, including any change order or amendment. This limitation does not apply to indemnity for § X for infringement of intellectual property rights and § Y for breach of confidentiality and use restriction. [optional: and § Z for damage or injury arising from breach of warranty].”

This clause explicitly carves out certain indemnities from the LOL limitations, providing clarity and ensuring that these indemnities remain uncapped.

Q5: Are there any legal constraints or mandatory laws that affect the limitation of liabilities in contracts?

A5: Yes, legal constraints may apply, depending on the jurisdiction and the nature of the contract. For example, in the UK, the Unfair Contract Terms Act restricts the ability to limit liabilities for death, personal injury caused by negligence, or fraud. Other specific exceptions may also exist, such as those related to title under sales of goods legislation. These constraints can apply regardless of the choice of law and are often added as additional carve-outs in LOL clauses to comply with mandatory laws.

Q&A on Survival of Contract Rights and Limitation Laws

Q1: In the UK, when would the audit rights in the cited case be cut off, as the 6-year statute only deals with breach?

A1: The termination of a contract doesn’t automatically cut off audit rights or other non-breach-related rights. Audit rights and other contractual provisions can continue to exist beyond the termination of the contract unless the contract itself specifies otherwise or unless there are legal constraints in place. The 6-year statute of limitations typically applies to breach of contract claims but doesn’t necessarily affect other contractual rights that survive termination.

Q2: Are there specific criteria for determining which contract rights should survive, absent an express survival clause?

A2: Without an express survival clause, the criteria for determining which contract rights should survive termination can be complex and may depend on the nature of the contract, the applicable law, and the intentions of the parties. Generally, rights related to future obligations, options, and performance guarantees may be more likely to survive. However, it’s advisable to include explicit survival clauses in contracts to avoid ambiguity and ensure that specific rights continue to exist after termination.

Q3: How does the Limitation Act or statutes of limitations affect the survival of contract rights?

A3: Statutes of limitations, such as the Limitation Act in the UK, primarily govern the time within which parties can bring legal actions for breach of contract or other claims. These statutes don’t automatically impact the survival of contract rights but can limit the period during which claims related to those rights can be pursued. Contractual rights, including those that survive termination, can continue to exist within the limitations imposed by the relevant statute of limitations.

Q4: Are there specific contract rights that should always be considered for survival clauses?

A4: While the inclusion of survival clauses should be tailored to the specific contract and the parties’ intentions, certain rights are commonly considered for inclusion in survival clauses. These may include obligations related to confidentiality, limitations of liability (LOL), accrued rights, dispute resolution, and any rights that are intended to extend beyond the termination of the contract. The key is to clearly define which rights survive in the contract language.

Q5: How does the choice of law and jurisdiction clause in a contract affect the survival of rights?

A5: Choice of law and jurisdiction clauses typically determine which laws and courts will govern any disputes arising from the contract. These clauses themselves often survive termination to ensure that disputes related to the contract are resolved according to the agreed-upon terms. However, the choice of law and jurisdiction clause is separate from the survival of specific contract rights, which may be addressed through explicit survival clauses in the contract language.

Q&A on Indemnification Clauses in Supply Contracts

Q1: The indemnification clauses in supply contracts can be very wide in scope and expose the indemnitor to significant financial liability, including remote consequential damages and expenses. What are your thoughts on the following requirements for indemnification, specifically for breach?

A1: Indemnification clauses in supply contracts can vary widely in scope and impact. The language used in these clauses is critical. Here are some considerations:

• Intentional Act or Omission: Indemnifying for any intentional act or omission by the supplier is an extremely broad requirement. It essentially means the supplier would have to indemnify the buyer for any deliberate action or inaction, regardless of the consequences or fault. This can be excessive and may warrant negotiation.
• Performance of Work: Requiring indemnification for any liability arising from or connected with the performance of work under the agreement is also very expansive. It essentially makes the supplier responsible for any legal claims related to the work, regardless of fault. This should be carefully reviewed and potentially negotiated to limit its scope.
• Breach of Obligations: Indemnifying for any breach of obligations under the agreement is ambiguous. It’s important to clarify whether this means indemnifying for damages or injuries caused by the breach, which would align with the typical use of indemnification clauses.

Ultimately, these requirements should be scrutinized in the context of the specific contract and the parties’ intentions. It’s common practice to negotiate and tailor indemnification clauses to ensure they are fair and reasonable for both parties.

Q2: Can you provide more insight into the types of indemnities, such as promise-based, fault-based, activity-based, and control-based, and how they might impact contract negotiations?

A2: Certainly, different types of indemnities can have varying impacts on contract negotiations:

• Promise-Based Indemnity: This type of indemnity typically arises when one party commits to indemnify the other party for specific actions or outcomes, regardless of fault. It can be quite favorable for the indemnitee but may be challenging for the indemnitor, as it doesn’t consider fault or negligence.
• Fault-Based Indemnity: In contrast, fault-based indemnities are more focused on indemnifying for damages caused by a party’s fault, such as negligence or intentional misconduct. They provide a degree of fairness and accountability based on fault.
• Activity-Based Indemnity: Activity-based indemnities pertain to indemnifying for specific activities or work performed under the contract. These can be broad or narrow in scope, depending on the contract language. They are often used in construction and project contracts.
• Control-Based Indemnity: Control-based indemnities come into play when one party wants to indemnify the other for events or outcomes they have control over. For example, a landlord may require a tenant to indemnify them for damage to the leased property caused by the tenant’s actions.

The impact on contract negotiations depends on the industry, risk tolerance, and the parties’ relative bargaining power. Some industries, like construction and oil, may have a history of using extensive indemnities. However, it’s essential for parties to assess the fairness and reasonableness of the indemnities and negotiate as needed to protect their interests.

Q3: Can you explain the significance of carve-outs within indemnification clauses?

A3: Carve-outs in indemnification clauses are essential for limiting the scope of indemnity obligations. They specify exceptions to what the indemnitor is required to cover. Here’s why they’re significant:

• Scope Control: Carve-outs help both parties control the extent of indemnification. They clarify that certain types of claims or losses are not subject to indemnity, which prevents overreaching indemnity requirements.
• Fairness: Carve-outs ensure fairness by excluding specific scenarios or liabilities that shouldn’t be the responsibility of the indemnitor. This helps balance the interests of both parties.
• Risk Allocation: Parties can use carve-outs to allocate risk appropriately. For example, if a specific risk should be borne by the indemnitor, it can be carved out from the limitations or exclusions.
• Clarity: Including carve-outs makes the indemnification clause clearer and more specific. It reduces ambiguity and the potential for disputes regarding the scope of indemnity.

Carve-outs are a valuable tool for tailoring indemnification clauses to suit the unique circumstances of each contract. Parties should negotiate and include them thoughtfully to ensure that the indemnity obligations align with their intentions and risk-sharing preferences.

Q&A on Outsourcing Models and Liability Limitations in NDA Agreements

Q1: The traditional single outsourcing model seems to be evolving into multi-vendor outsourcing managed by a service integrator or managing contractor. Is this trend becoming too complex for most businesses to manage effectively, and are government agencies shifting away from PFI and PPP towards simpler micro-outsourcing models?

A1: The shift towards multi-vendor outsourcing managed by service integrators or managing contractors has indeed become more prevalent in recent years. While this approach can offer greater flexibility and specialization, it also introduces complexities in managing multiple vendors and ensuring seamless coordination. Whether it becomes too complex to manage depends on the organization’s capacity for effective vendor management and the specific industry and context.

As for government agencies, many have recognized the challenges associated with large-scale PFI (Private Finance Initiative) and PPP (Public-Private Partnership) projects, such as cost overruns and delays. Some are exploring alternative models like micro-outsourcing or smaller, more manageable contracts to reduce risk and improve efficiency. However, the trend can vary from country to country and even within different sectors.

Q2: I’ve come across an extended limitation of liability clause in an NDA agreement for the first time. It states that neither party shall be liable to the other for any indirect, consequential, special, incidental, exemplary, and punitive damages. What does this clause mean, and how might it affect the parties involved?

A2: The extended limitation of liability clause you’ve encountered is designed to restrict the types of damages that one party can seek from the other in case of a breach or other legal dispute. Here’s what it means:

• Indirect and Consequential Damages: These refer to damages that are not the direct result of a breach but are incurred as a consequence of the breach. For example, lost profits due to a contract breach.
• Special and Exemplary Damages: Special damages are specific and quantifiable losses resulting from a breach. Exemplary damages, also known as punitive damages, are intended to punish the breaching party for wrongdoing.
• Incidental Damages: These are minor damages that arise directly from a breach, such as the cost of returning a defective product.

The clause essentially limits the types of damages that can be sought to direct damages, which are the immediate and foreseeable losses resulting directly from the breach. This limitation can protect both parties from excessive liability in case of a dispute.

However, it’s crucial for parties to carefully review and negotiate such clauses, especially in more complex agreements. The extent to which these limitations apply can vary, and parties may want to tailor them to their specific needs or consider exceptions for certain types of breaches or misconduct.

Q&A on Liquidated Damages in NDA Agreements

Q1: Is there a need for a liquidated damages clause in NDA (Non-Disclosure Agreement) agreements, and how dangerous is it to have this clause in an NDA?

A1: The inclusion of a liquidated damages clause in an NDA is a matter of negotiation and risk assessment between the parties involved. Here are some considerations:

• Need for Liquidated Damages: Liquidated damages clauses can serve as a pre-agreed remedy for a specific type of breach, such as unauthorized disclosure of confidential information. They simplify the process of determining damages in case of a breach, as the amount is predetermined.
• Pros of Liquidated Damages:
  • Certainty: It provides a clear and predetermined amount as compensation in case of a breach, which can be beneficial for both parties by eliminating disputes over the extent of damages.
  • Deterrence: It can discourage the breaching party from violating the NDA, knowing the exact financial consequences.
• Cons of Liquidated Damages:
  • Cap on Liability: Liquidated damages can limit the potential recovery for the injured party. In some cases, actual damages may exceed the predetermined amount, but the injured party is restricted to claiming only the liquidated amount.
  • Subject to Challenge: In some jurisdictions, liquidated damages clauses may be challenged as being excessive or unreasonable, leading to potential legal disputes.

Q2: Is there a danger in including a liquidated damages clause in an NDA?

A2: Including a liquidated damages clause in an NDA can be both beneficial and potentially risky, depending on the circumstances. The danger lies in how the clause is structured and enforced:

• Overly Restrictive: If the liquidated damages amount is set too low and does not reasonably reflect the potential harm caused by a breach, it may be considered unenforceable or challenged in court.
• Loss of Flexibility: Having a liquidated damages clause may limit the ability to pursue other legal remedies or claim actual damages that exceed the predetermined amount.
• Mutual or Unilateral: Whether the liquidated damages clause is mutual (applies to both parties) or unilateral (applies to one party) can impact the balance of power and fairness in the NDA.
• Jurisdictional Differences: The enforceability of liquidated damages clauses can vary by jurisdiction, so it’s essential to consider local laws when drafting or enforcing an NDA.

In summary, the inclusion of a liquidated damages clause in an NDA should be carefully considered and tailored to the specific needs and risks of the parties involved. Legal advice and negotiation may be necessary to strike the right balance between providing certainty and protecting the parties’ interests.

Q&A on Analyzing Payment Delays for Extension of Time (EOT) in Projects

Q1: In a project, if there are consistent delays in the release of payment by the Employer, how can the Contractor analyze or claim an Extension of Time (EOT) with respect to the delay in payment release?

A1: Analyzing and claiming an Extension of Time (EOT) due to consistent delays in payment release by the Employer can be a complex process. While there is no well-settled formula for calculating this, here are steps and considerations that can help the Contractor:

• Contract Review: Begin by thoroughly reviewing the project contract. Look for any clauses related to payment terms, delays, and EOT provisions. The contract may contain specific provisions that address delays in payment and their impact on the project schedule.
• Document Delays: Keep detailed records of payment delays, including the dates on which payments were due and when they were actually received. Also, document any communication with the Employer regarding payment delays.
• Analyze Impact: Assess how payment delays have affected the project. This may include looking at the cascading effects on performance, such as resource allocation, worker morale, and productivity. Consider whether there were any work stoppages or slowdowns directly attributable to payment issues.
• Review Suspension Clauses: Check if the contract includes clauses that allow the Contractor to suspend work in case of extended payment delays. If such clauses exist and were invoked, calculate the duration of work suspension.
• Consult Legal Counsel: Seek legal advice to understand the contractual obligations and rights related to payment delays and EOT. Legal counsel can help interpret contract language and navigate dispute resolution processes.
• Communicate with the Employer: Clearly communicate the impact of payment delays to the Employer. Present your analysis, including evidence of how these delays have affected the project timeline. Request an EOT based on the documented delays and their consequences.
• Negotiate: Be prepared to negotiate with the Employer regarding the EOT claim. It’s essential to engage in constructive discussions and potentially reach a mutually agreeable solution.

Remember that the success of an EOT claim due to payment delays depends on the specific contract terms and the ability to demonstrate a direct causal link between the delays in payment and project delays. Legal advice and clear communication with the Employer are often crucial in resolving such disputes effectively.

Q&A on Acquisition and Assignment in Contracts

Q1: In our contracts, we typically included a clause allowing assignment between entities within our group of companies. Now that our holding company has been acquired through a direct stock purchase, do we need to get the client’s consent and send an assignment notice?

A1: The need for client consent and sending an assignment notice in the case of an acquisition can depend on the specific contract and its provisions. Here are some considerations:

• Change of Control vs. Assignment: Determine whether the contract contains a “Change of Control” provision or clause. In many cases, a change in control (acquisition) is treated differently from an assignment. If there’s a Change of Control provision, it may address the procedure or requirements related to such changes.
• Review Contract Language: Carefully review the contract language related to assignment, change of control, or transfer of interests. Look for any specific requirements, restrictions, or obligations imposed by the contract.
• Consent Requirements: If the contract explicitly requires client consent for assignment or change of control, you should seek that consent. However, if the contract is silent on this matter or only addresses assignment and not change of control, you may not need to obtain client consent.
• Notice of Change of Control: Even if client consent is not required, sending a notice of change of control can be a prudent step. It informs the client of the change in ownership and provides transparency about the new structure. This can help maintain a good working relationship.
• Consult Legal Counsel: It’s advisable to consult with legal counsel who specializes in contract law and mergers and acquisitions. They can provide specific guidance based on the contract terms and applicable laws.
• Consider the Impact: Consider the potential impact of the acquisition on the contract. Some contracts may allow the other party to terminate the agreement in case of a change of control. Understanding these consequences is essential.

In summary, the need for client consent and sending an assignment notice depends on the contract terms and whether it explicitly addresses change of control. Legal counsel can help you navigate the specific requirements and implications of the acquisition in relation to your contracts

Q&A on Maintenance Obligations in a Sales and Purchase Agreement (SPA)

Q1: If there’s a clause in a SPA stating that the company will be responsible for the maintenance of the product sold, and there’s no termination clause in the agreement, do I have the right to withdraw from this maintenance service, or will this be considered a breach?

A1: The answer depends on various factors, including the governing law and the specific circumstances of the contract. Here are some considerations:

• Governing Law: The rules governing contract termination can vary by jurisdiction. In English law, for example, the concept of repudiatory breach is relevant. If the breach deprives the other party of the whole or substantially the whole benefit of the contract, it might be considered repudiatory. However, this can be very fact-specific.
• Termination Without a Termination Clause: In many jurisdictions, you can terminate a contract without a termination clause by providing reasonable notice. The reasonableness of the notice period may depend on the nature of the contract, the products or services involved, and industry practices.
• Purpose of the Contract: Consider whether the purpose of the contract can still be achieved without the maintenance services. If the product can be maintained by other providers or if it’s essential for the ongoing use of the product, termination without a valid reason might constitute a breach.
• Costs and Performance: Ensure that the agreement specifies the terms and costs of maintenance. If the maintenance is subject to costs, these should be clearly defined in the contract. The maintenance should also be performed in line with ordinary business practices.
• Performance Guarantees: Contracts may include performance guarantees or security, such as a guarantee that can be encashed in case of a breach. These provisions can provide additional protection.

In summary, while a termination clause would have been ideal for clarity, you may still have the right to withdraw from maintenance services with reasonable notice, depending on the circumstances and applicable law. However, it’s essential to consider the contract’s purpose, industry practices, and any performance guarantees or obligations defined in the agreement. Consulting with legal counsel experienced in contract law in your jurisdiction is advisable for a precise assessment.

Q&A on Drafting Investment Agreements for the Receiver of Investment

Q1: What are the key points that we have to remember in drafting an investment agreement when we are acting for the receiver of the investment?

A1: When drafting an investment agreement on behalf of the receiver of the investment, there are several crucial points to consider:

• Clarify the Nature of the Transaction: Clearly specify in the agreement whether the transaction involves a loan or an investment. Loans must be repaid, while investments typically do not require repayment. This distinction is especially important when family members are involved to avoid future disputes.
• Investor Protections: Recognize that investors, especially venture capitalists (VCs) and private equity firms (PE), are typically savvy and seek various protections. They often secure liquidation rights and exit options, such as put options or mechanisms that force the promoters to find a buyer for a secondary sale. Understanding the investor’s perspective on exits and returns is crucial.
• Hybrid Instruments: Be aware that investors might use hybrid instruments or equity-linked quasi-debt instruments. These instruments offer investors an upside if the company performs well while also securing some form of repayment or exit option. However, this approach can vary based on whether the investor has a short-term or long-term interest in the company.
• Dispute Resolution: Consider the dispute resolution mechanism in the agreement. Ensure that it is efficient and effective in resolving potential disputes between the receiver and the investor. Common methods include arbitration, mediation, or specific clauses addressing deadlock situations.
• Resource Allocation: Recognize that until the investment funds have actually been received and are in the bank, there may be uncertainties. Therefore, avoid resource-intensive obligations for the receiver until the funds are secured. Be cautious about making commitments that rely on the investment until it is confirmed.
• Reverse Termination Fee: In the context of terminating the contract before closing, especially at the investor’s request, consider the use of a reverse termination fee. This fee can provide compensation to the target company if the investor seeks termination prior to closing. However, be prepared to address issues such as material adverse changes or unsatisfactory fulfillment of condition precedent clauses that may lead to disputes and potential litigation.

These key points can help guide the drafting of an investment agreement when representing the receiver, ensuring clarity, investor protection, and effective dispute resolution mechanisms are in place. Additionally, seeking legal counsel experienced in investment agreements and financing transactions is advisable to navigate complex negotiations and ensure the receiver’s interests are safeguarded.

Q&A on Common Law and Non-Monetary Consideration for Shares

Q1: Under the common law, it appears that where a company enters into a contract to take property, services, or other consideration not possessing an obvious money value in payment for its shares, the value placed by the parties on such consideration will be accepted by the Court. The Court will only examine the adequacy of the non-monetary consideration for the shares if there is an action to set aside the contract, taking into account matters such as whether the consideration is illusory or not equivalent to the stated value of the shares. Is a company free to contract to sell its shares for past non-monetary consideration (in the absence of specific legislation allowing past consideration as good/adequate/sufficient consideration for shares issued)?

A1: Under common law principles, a company is generally free to contract to sell its shares in exchange for non-monetary consideration, which may include property, services, or other forms of value that do not possess an obvious money value. The common law allows parties to determine the value of such non-monetary consideration, and the Court typically accepts the value assigned by the parties.

However, it’s important to note that past consideration is generally not considered valid consideration in contract law. Past consideration refers to actions or services performed before the contract was formed. In many jurisdictions, including under common law principles, past consideration is not considered adequate or sufficient consideration to support a contract.

In the scenario described, if the consideration being offered for the shares is based on past non-monetary efforts or services, it may not be considered valid consideration unless specific legislation in the jurisdiction allows for past consideration as adequate. To ensure the legality and enforceability of such a contract, it is advisable to consult with legal counsel who can provide guidance based on the specific laws and regulations applicable in the relevant jurisdiction.

In summary, while common law generally allows for the exchange of shares for non-monetary consideration, past consideration may not be considered valid unless there is specific legislation permitting it. Legal advice should be sought to ensure compliance with applicable laws and regulations.

Q&A on Contract Negotiation Strategies

Q1: Any tips on addressing contract negotiation strategies that you recommend?

A1: Negotiating contracts effectively is a crucial skill in business. Here are some tips and strategies to consider when approaching contract negotiations:

• Preparation is Key: Thoroughly understand the contract terms, your goals, and potential concessions you’re willing to make. Know your counterparty’s motivations and priorities as well.
• Set Clear Objectives: Define your objectives clearly before entering negotiations. Know what you want to achieve and where you’re willing to compromise.
• Establish Trust: Building trust with your counterpart is essential. Be transparent, honest, and respectful throughout the negotiation process.
• Active Listening: Listen carefully to the other party’s concerns and interests. Understanding their perspective can help find mutually beneficial solutions.
• Be Patient: Negotiations can take time. Avoid rushing the process, and be prepared for back-and-forth discussions.
• Focus on Interests, Not Positions: Instead of sticking to fixed positions, focus on underlying interests. This can lead to creative solutions that satisfy both parties.
• Leverage Legal Expertise: If you have a legal team, involve them early in the process. They can provide legal insights and help draft favorable terms.
• Use Silence Effectively: Don’t be afraid of silence during negotiations. Sometimes, the other party will fill the silence with concessions or additional information.
• Manage Emotional Responses: Stay composed and avoid reacting emotionally to counteroffers. Keep your focus on the overall goals.
• Document Everything: Ensure that all agreements and concessions are documented clearly within the contract to avoid misunderstandings later.
• Prepare for Deadlocks: Discuss in advance how to handle situations where an agreement can’t be reached. Consider mediation or alternative dispute resolution methods.
• Cultural Sensitivity: If negotiating internationally, be aware of cultural differences in negotiation styles and customs. Cultural intelligence can help bridge gaps.
• Keep a Win-Win Perspective: Aim for mutually beneficial outcomes whenever possible. Building positive long-term relationships can lead to future opportunities.
• Know When to Walk Away: Sometimes, it’s best to walk away from a deal that doesn’t align with your objectives or is too one-sided.
• Post-Negotiation Follow-Up: After an agreement is reached, ensure that both parties understand their obligations and monitor contract compliance.

Remember that negotiation is an ongoing process, and flexibility is often key to successful outcomes. Adapt your strategies as needed to achieve the best results for your organization.

Q&A on Contract Clauses and EU Trade Regulations

Q1: Can a manufacturer tie its distributor in a contract to prevent the distributor from exporting to or importing from an EU country outside their designated geographical remit? Wouldn’t this violate the EU principle of free parallel trade?

A1: In the EU, restrictions on parallel trade can be a complex issue. Such restrictions should be carefully reviewed to ensure they comply with EU competition law. Here are some considerations:

• Market Share Thresholds: If the manufacturer’s market share is below certain thresholds, restrictions on parallel trade may be more permissible. However, even in such cases, the restrictions should not go beyond what is necessary to protect legitimate business interests.
• Exclusivity and Designated Distributors: Prohibiting the distributor from selling to exclusive distributors in other countries may be more acceptable under competition law.
• Business Approach: Consider addressing parallel trade issues as a business concern rather than a legal one. Building a cooperative relationship with your distributor and discussing these concerns openly can often be more effective.
• Contract Duration: Avoid automatic renewal clauses in contracts. Make renewals mutual and subject to agreement at the end of each contract period.
• Antitrust Guidelines: Familiarize yourself with the EU Commission’s guidelines on vertical restraints, which provide guidance on competition law compliance.
• Threats and Penalties: Avoid any implied threats or penalties related to observance of price levels. Such practices can be considered anti-competitive.
• Legal Counsel: Given the complexity of EU competition law, it’s advisable to seek legal counsel with expertise in this area to ensure compliance.

Remember that the EU’s single market principle is fundamental, and restrictions on parallel trade should be carefully crafted and analyzed to avoid violating EU competition law.

Q&A on Negotiating SaaS Agreements

Q1: How many hours does it actually take to negotiate a medium to large-scale SaaS agreement for a corporate enterprise to completion?

A1: Negotiating a SaaS agreement’s duration can vary based on several factors, such as the complexity of the deal, the parties involved, and their negotiation skills. Here’s an estimate for two scenarios:

Scenario 1: Buyer contracting for services using vendor paper:

• Estimated time: 15–20 hours
• Factors impacting duration: Vendor size, flexibility in contract policies, negotiator skill, and priority.
• Key issues: License restrictions, security breach indemnity, liability cap, insurance, warranty/disclaimer, termination terms, assignment restrictions, fault grid for mission-critical software, and change orders.

Scenario 2: Same as Scenario 1, but contract starts on Buyer’s paper:

• Estimated time: 20–35 hours
• Factors impacting duration: Customizing buyer’s form, size of the vendor/buyer, flexibility in policies, skill of negotiators, and priority.
• Similar key issues as Scenario 1 but with added complexity due to customizing the buyer’s form to fit specific software, hosting, and service modules.

These estimates include time spent redlining, meetings with clients, negotiations with the vendor, and updating contract management systems. Keep in mind that these are rough estimates, and the actual time may vary based on unique circumstances and the level of detail involved in negotiations.

Q&A on Negotiating SaaS Agreements – Part 2

Q1: What happens alongside our SAAS agreement is that we need to fill in extensive questionnaires addressing security, hosting, technical support, etc. Is there a more standardized approach to these?

A1: It’s common to encounter extensive questionnaires in SaaS agreements, and while they may vary slightly, they often cover similar topics. To streamline this process and save time, adopting a more industry-standard approach to these questionnaires could be helpful. Creating a standardized set of responses or templates for common questions can expedite the process and ensure consistency in your responses.

Q2: Does your version of the agreement include a cap on vendor liability? If so, does the client indemnify the vendor for liability above the cap? Is data breach insurance required for “sensitive data”?

A2: Yes, many SaaS agreements include a liability cap on the vendor’s liability. Whether the client indemnifies the vendor for liability above the cap depends on the specific terms negotiated. Data breach insurance requirements, especially for “sensitive data,” can also vary and should be outlined clearly in the agreement. These aspects often require negotiation and can impact the overall duration of the agreement.

Q3: How long negotiations take can depend on the involvement of parties and when legal counsel becomes engaged. What’s the best approach to ensure smooth negotiations?

A3: Involving both sales and legal teams from the outset of negotiations is advisable. Establishing clear term sheets in plain language to outline commercial and contract terms, reflecting company policy, before drafting can help align expectations and reduce delays. Early collaboration and communication between teams can prevent misunderstandings and expedite the negotiation process.

Q&A on Contract Clauses Limiting Liability and Damages

Q1: If a contract has a clause that limits liability and another clause allowing the seeking of damages, can a party still be exposed to paying damages exceeding the contract amount?

A1: The language in such clauses can be critical. In your example, there is a potential conflict between the two clauses. The first clause limits X’s liability to the monies paid by Y under the contract. The second clause allows Y to seek “appropriate damages.” This ambiguity could lead to misinterpretation. To clarify, you might revise the second clause to explicitly state the scope and limitations of damages, ensuring it aligns with the intent of the parties.

Q2: From Y’s perspective, can the limit on X’s liability be clarified to ensure it’s based on compensation payable under the contract, not necessarily the amount actually paid by Y?

A2: Yes, you can clarify the limit on X’s liability by specifying that it’s based on the compensation payable under the contract, regardless of whether Y has actually paid that amount to X. This helps protect Y’s rights and ensures that X’s liability is not reduced simply because Y hasn’t made payments due to X’s non-performance.

Q3: How can the second clause be revised to better express the intention of seeking damages without imposing mandatory damages?

A3: To express the intention of seeking damages without imposing mandatory damages, you can rephrase the second clause. For example: “Y may seek damages, subject to proof, in the event of X’s breach or threatened breach. Such damages shall be limited to direct losses incurred by Y and shall be subject to determination by a court of law.” This revision clarifies that damages are not mandatory but may be sought if certain conditions, such as a breach, are met.

Q&A on Contract Law and Limitation of Liability

Q1: Which law applies to your contract, and is it considered a cross-border contract? Additionally, what specific outcome are you seeking by considering the second sentence, and are there legal limits to how much you can limit liability?

A1: The applicable law for your contract is Indian law, and it’s a domestic contract. Considering the second sentence might be necessary due to specific instructions, but it’s important to draft it carefully to avoid ambiguity or conflicts with the first sentence. Legal limits to the limitation of liability often depend on factors such as reasonableness and the specific facts of the contract.

Q2: Is there a reason to distinguish between monetary damages and damages for the threat of a breach in your contract?

A2: Distinguishing between monetary damages and damages for the threat of a breach can be important for clarity and precision in your contract. Monetary damages typically refer to compensation for actual losses suffered, while damages for the threat of a breach might relate to potential future losses or harm caused by a breach. This distinction helps define the scope of damages more clearly.

Q3: What are the potential consequences of a poorly drafted and conflicting limitation of liability clause?

A3: A poorly drafted and conflicting limitation of liability clause can lead to ambiguity and disputes regarding the extent of liability. It may result in increased legal fees and costs to resolve conflicts. To avoid such issues, it’s advisable to draft limitation of liability clauses clearly and coherently from the outset, considering the specific legal requirements and objectives of the parties involved.

Q&A on Dealing with Language Differences in Cross-Border Contracts

Q1: In cross-border contracts involving parties without a common language, what are the common approaches to addressing this issue?

A1: In cross-border contracts involving parties with different languages, several approaches can be taken:

• Use Chinese or English only (though English-only is less common in China).
• Use Chinese only with a “reference” translation to English.
• Use English only with a “reference” translation to Chinese.
• Provide both Chinese and English versions of the same contract as a single document or set of documents.

The choice depends on the preferences and requirements of the parties involved.

Q2: How does certification of a translation affect the contract when there are language differences, and what if the certified translation is manifestly incorrect?

A2: Certification of a translation can provide some level of assurance regarding accuracy. However, if a certified translation is manifestly incorrect, it may still pose problems. Certification shifts the risk but may not be sufficient when dealing with languages that others may not understand well. In such cases, precision and clarity in drafting the contract in the primary language is crucial.

Q3: How do you handle situations where reference translations are provided but may not be given adequate attention or where translation precision is critical for legal concepts?

A3: Providing reference translations can be a helpful compromise, but it’s essential to ensure that both versions of the contract are treated with equal importance. In practice, reference translations may receive less attention, especially when there are complex technical or legal terms involved. In such cases, it’s advisable to draft the contract in the primary language with utmost precision and clarity, as translation may not capture the full legal nuances.

Q4: Are there any legal implications or considerations when determining the language of the contract, especially in arbitration clauses or when parties are from different legal systems?

A4: Yes, there are legal implications to consider, particularly when it comes to arbitration clauses. The choice of language can impact the conduct of arbitration proceedings and the enforceability of arbitral awards. It’s essential to define the language of arbitration clearly in the contract. Additionally, parties from different legal systems may have different interpretations of legal terms, which should be addressed to avoid misunderstandings or disputes.

Q&A on Dealing with Language Differences and Local Authorities in Contracts (1)

Q1: How can translations impact contracts when local authorities require a local language version, and what are the potential consequences of unclear translations?

A1: Local authorities often require contracts to be in the local language for official purposes. In such cases, it’s crucial to ensure that the translation is accurate and clear. Unclear translations can lead to adverse consequences, especially in tax and foreign clauses. Local authorities may construe and form opinions based on the local language version, which could result in misunderstandings or disputes.

Q2: Is it realistic to expect 100% accuracy in translations of lengthy contracts, and what challenges are involved in translating legal documents?

A2: Achieving 100% accuracy in translations of lengthy contracts can be challenging. Translating legal documents requires precision and clarity, and it’s often a complex process. Typically, it involves at least two translators—a general translator and an attorney. It’s not cost-effective for an attorney to do the entire translation, but it’s crucial for an attorney who is a native speaker to review and approve the final version of the contract. Translating technical exhibits and drawings can be particularly challenging and should be approached with caution.

Q3: What are the considerations when including clauses that address conflicts between different language versions of a contract, especially in cross-border agreements?

A3: In cross-border agreements where language differences exist, it’s essential to address potential conflicts between language versions. The choice of clause can depend on various factors:

I. If dispute resolution takes place outside mainland China or allows English as the language for arbitration in China, a clause stating that the English version prevails can be suitable.

II. If the contract must be submitted to Chinese authorities for legal effect, a clause stating the prevailing version might not be accepted during registration. This applies to Chinese employment contracts as well.

III. In scenarios neither I nor II, it might be wiser to state that “in case of a conflict between the two versions, the Chinese version will prevail.” This ensures that parties have control over the translation presented to a Chinese court if a dispute arises over the English version’s meaning.

Each approach has its considerations, and the choice should align with the specific circumstances of the contract and jurisdiction.

Q&A on Dealing with Language Differences and Local Authorities in Contracts (2) 

Q1: When local authorities require a local language version of a contract, how can this impact the interpretation of tax and foreign clauses, and what precautions should be taken?

A1: Local authorities often insist on contracts being in the local language, and this can have implications for the interpretation of clauses, especially those related to tax and foreign matters. To avoid misunderstandings or adverse consequences, it’s crucial to ensure that translations are clear and accurate. Careful attention should be given to translating clauses that are likely to be scrutinized by local authorities.

Q2: Is it feasible to expect 100% accuracy in translating lengthy contracts, and what challenges arise when translating legal documents?

A2: Achieving 100% accuracy in translating lengthy contracts can be challenging. Legal document translation requires precision and clarity. Typically, two translators are involved—a general translator and an attorney. While it’s not cost-effective for an attorney to perform the entire translation, it is essential for an attorney who is a native speaker to review and approve the final version of any contract. Translating technical exhibits and drawings can be particularly challenging and may not be advisable in some cases.

Q3: In cross-border agreements with language differences, what are the considerations for including clauses addressing conflicts between different language versions?

A3: In cross-border agreements, addressing conflicts between different language versions is essential. The choice of clause depends on various factors:

I. If dispute resolution occurs outside of mainland China or allows English as the language for arbitration in a Chinese arbitral tribunal, a clause stating that the English version prevails can be suitable.

II. If the contract must be submitted to Chinese authorities for legal effect, the above clause may be denied registration. This applies to Chinese employment contracts as well.

III. In scenarios not falling into categories I or II, it may make more sense to state that “in case of a conflict between the two versions, the Chinese version will prevail.” This allows parties to have control over the translation presented to a Chinese court if disputes arise over the English version’s meaning. While it requires extra work during drafting, it provides more certainty than relying on a local translator.

The choice of clause should align with the specific circumstances and jurisdiction of the contract.

Q&A on Including Indemnity and Damages Clauses in Contracts

Q1: In a contract that includes an indemnity clause, what’s the relevance of having a separate clause for damages?

A1: Including both an indemnity clause and a separate damages clause in a contract can serve distinct purposes:

• Liability Cap: In some contracts, particularly those governed by specific laws like Russian law, damages might be regulated by law. In such cases, it can be beneficial to stipulate a liability cap or limitation of liability in a separate damages clause.
• Liquidated Damages: A damages clause can specify liquidated damages, providing predetermined compensation for particular breaches. This helps avoid disputes over the quantum of damages.
• Clarity and Precision: Separating the two clauses allows for clarity and precision in outlining what constitutes indemnifiable losses and what falls under the damages clause.
• Defense and Attorney Fees: Including a damages clause can address important issues like attorney fees and defense obligations, which may be crucial in legal disputes.

Having both clauses is not illegal and can provide a more comprehensive approach to addressing breaches and their consequences. It offers flexibility in determining compensation and can help minimize disputes.

Q2: Are there any legal restrictions or requirements when including both indemnity and damages clauses in a contract?

A2: There are no legal restrictions against including both indemnity and damages clauses in a contract. In fact, having both can be advantageous in addressing different aspects of potential breaches and their consequences. However, it’s essential to draft these clauses clearly and precisely to avoid ambiguity and disputes. Additionally, you should consider the governing law of the contract, as some jurisdictions may have specific rules or limitations regarding damages and indemnity.

Q3: How do indemnity and damages clauses differ in practice, and how can they impact compensation for breaches of contract?

A3: Indemnity and damages clauses serve different functions:

• Indemnity Clause: An indemnity clause is like an assurance that one party will take responsibility for compensating the other party for losses arising from specific events or breaches. It often provides broader coverage and can extend to third-party claims. Indemnity doesn’t require the injured party to prove the exact quantum of damages, making it a powerful mechanism for compensation.
• Damages Clause: A damages clause specifies predetermined compensation for particular breaches, such as liquidated damages. It requires the injured party to demonstrate the breach and quantify the damages suffered. Damages clauses can be more specific but may require a party to prove their losses in case of a breach.

The choice between these clauses depends on the parties’ preferences, the specific contract, and the governing law. While indemnity can provide more comprehensive coverage and potentially higher compensation, damages clauses can offer clarity and specificity in compensation terms. Ultimately, both have their place in contract drafting, depending on the parties’ goals and the contract’s context.

Q&A on Understanding Contract Language

Q1: I want to improve my understanding of contract language, but I’m not sure where to start. Any suggestions for learning or getting better at comprehending contract language?

A1: Understanding contract language can be a valuable skill. Here are some suggestions to help you get started:

• Legal Training: Consider taking a basic legal course or workshop focused on contract law. Many universities and online platforms offer courses that cover contract terminology and principles.
• In-House Legal Support: If your organization has an in-house legal department, reach out to them for guidance and training. They can provide tailored insights into contract language specific to your industry and company.
• Online Resources: There are numerous online resources, blogs, and articles that break down contract language and explain common clauses. Look for reputable sources that provide practical explanations.
• Legal Dictionary: Invest in a legal dictionary or use online legal dictionaries to look up terms and phrases you encounter in contracts. Understanding the definitions is essential.
• Contract Templates: Examine contract templates relevant to your industry. Compare them to see common language and clauses used in similar agreements.
• Seek Guidance: Don’t hesitate to ask colleagues or mentors who have experience in contract negotiation and drafting. They can provide real-world insights and explanations.
• Practice: Practice makes perfect. As you review contracts, take notes, and create summaries of key terms and clauses. This can help reinforce your understanding.
• Stay Updated: Contract law evolves, so stay updated on legal developments and changes in industry standards.

Remember that contract language can vary by jurisdiction and industry, so it’s essential to tailor your learning to your specific needs and context.

Q2: How can understanding contract language benefit my role, particularly in negotiations and contract management?

A2: Understanding contract language can offer several benefits in your role:

• Effective Negotiation: When you understand contract language, you can negotiate with more confidence. You’ll recognize key terms and potential pitfalls, allowing you to advocate for favorable terms.
• Risk Mitigation: Comprehending contract language helps you identify and mitigate risks. You can spot clauses that may expose your organization to liability and work to address them during negotiations.
• Contract Management: In contract management, understanding the language allows you to monitor compliance, track deadlines, and ensure that all parties fulfill their obligations as outlined in the contract.
• Cost Savings: By spotting ambiguities or unfavorable terms early in the negotiation process, you can avoid costly disputes or legal actions down the road.
• Faster Decision-Making: Familiarity with contract language enables you to review and assess agreements more efficiently, reducing the time it takes to finalize contracts.
• Enhanced Communication: You can communicate more effectively with legal teams, clients, and stakeholders when discussing contract-related matters.

Overall, improving your understanding of contract language can enhance your negotiation skills, reduce legal risks, and contribute to successful contract management in your role.

Q&A on Contract Language Interpretation

Q1: When dealing with contract language, particularly in insurance contracts, what is the significance of the term “deliberate” in the context of a carve-out to an exclusion clause?

A1: The term “deliberate” in the context of an exclusion clause, especially in insurance contracts, is significant because it determines the threshold for a breach that can trigger certain consequences, such as avoiding a payment liability. The interpretation of “deliberate” can vary, and it’s essential to understand its precise meaning in the specific contract.

• Strict Liability: If “deliberate” is interpreted as requiring solely intentional behavior, regardless of the actor’s belief or intent, it implies a form of strict liability. In this case, even unintentional but deliberate (purposeful) non-disclosure or actions could trigger the exclusion clause.
• Intentional Non-Disclosure: If “deliberate” is understood as intentional non-disclosure, it may not necessarily require dishonest intent. It implies that the actor’s intent to withhold information intentionally, even without dishonesty, could fall within the carve-out, resulting in no payment liability.

The exact interpretation depends on the contract’s wording and the applicable legal principles. Courts often analyze the specific language and context of the contract to determine the meaning of terms like “deliberate.” It’s crucial to consult legal experts or carefully review contract provisions to understand their implications fully.

Q2: In the context of insurance contracts, does “deliberate” necessarily imply dishonest intent, or can it also cover intentional actions without dishonesty?

A2: The interpretation of “deliberate” in insurance contracts can vary, and it may not always imply dishonest intent. It depends on the specific contract wording and the legal principles applicable in the jurisdiction. Here are two possible interpretations:

• Strict Liability: In some cases, “deliberate” may be interpreted as requiring solely intentional behavior, irrespective of the actor’s belief or intent. In this strict interpretation, dishonesty may not be a necessary element. Even an intentional but honest mistake or omission could be considered “deliberate” and trigger the exclusion clause.
• Intentional Non-Disclosure: Alternatively, “deliberate” might be understood as intentional non-disclosure, which may not necessarily involve dishonesty. This interpretation implies that the actor’s intent to withhold information intentionally, even without dishonesty, could fall within the carve-out, resulting in no payment liability.

The exact meaning of “deliberate” should be determined based on the contract’s specific language, the applicable legal framework, and any relevant court decisions. To avoid ambiguity and potential disputes, it’s advisable to seek legal counsel and clarify the intended meaning of such terms during contract negotiations.

Q3: How do insurance contracts balance the concept of “deliberate” non-disclosure with the principle of utmost good faith?

A3: Insurance contracts are founded on the principle of utmost good faith, also known as uberrimae fidei. This principle places a high duty of disclosure on both the insured party and the insurer. When it comes to balancing “deliberate” non-disclosure with this principle, several factors come into play:

• Duty to Disclose: Under the principle of utmost good faith, both parties have a duty to disclose all material information that could impact the insurance contract. Failure to do so could void the contract or affect its terms.
• Interpretation of “Deliberate”: The interpretation of “deliberate” in the context of non-disclosure can vary. If “deliberate” is interpreted strictly as intentional behavior, it could encompass both dishonest and non-dishonest intent. However, if it requires dishonesty, it may align better with the principle of good faith.
• Contract Wording: The specific wording of the insurance contract plays a crucial role. If the contract explicitly defines “deliberate” and its consequences, it provides clarity regarding the parties’ obligations and liabilities.
• Legal Framework: The applicable legal framework and court decisions in the jurisdiction can influence how “deliberate” non-disclosure is interpreted and whether it aligns with the principle of utmost good faith.

Balancing these factors requires careful drafting of insurance contracts, clear definitions of terms, and adherence to legal standards. Legal experts can help navigate these complexities and ensure that insurance contracts are consistent with the principle of utmost good faith while addressing issues of “deliberate” non-disclosure.

Q&A on Ambiguities in Contract Language

Q1: In contract language, what is the significance of the term “wilful default,” and how does it relate to liability caps and termination of contracts?

A1: The term “wilful default” in contract language often relates to the behavior or actions of one party (let’s call them “X”) in the context of contract termination. The significance of “wilful default” can vary, but it generally involves determining whether X’s actions in terminating the contract were morally blameworthy, deliberate, or in good faith.

• Economic Breach Theory: Sometimes, “wilful default” may not be solely about moral blameworthiness but also consider the economic aspect. For instance, if X terminates a contract because it’s economically advantageous to do so, it might be seen as a “wilful default” even if it’s not morally blameworthy.
• Liability Cap: Contracts often include liability caps that limit the amount of damages or liability a party can incur. “Wilful default” may sit outside of this liability cap, meaning that if X’s behavior is determined to be a “wilful default,” they could be held liable beyond the cap.

Q2: Why do some contracts, particularly in the insurance industry, contain ambiguities related to terms like “wilful default,” and why are they not promptly corrected?

A3: The presence of ambiguities in contracts, including terms like “wilful default,” can be attributed to several factors:

• Complexity: Contracts, especially in industries like insurance, can be highly complex and involve various parties, regulations, and risks. Ambiguities may unintentionally arise due to the complexity of the subject matter and the drafting process.
• Evolution of Language: Language evolves over time, and terms may acquire new meanings or interpretations. What was clear when a contract was drafted might become ambiguous or open to different interpretations later.
• Lack of Clarity: Drafting a contract without ambiguities requires meticulous attention to detail, legal expertise, and a deep understanding of the industry. Not all contract drafters may possess these qualities, leading to ambiguities.
• Legal Precedents: Ambiguities may persist in contracts because legal precedents and court decisions sometimes clarify the meaning of ambiguous terms. Parties may rely on these precedents rather than revising the contract.

While many parties would prefer to avoid ambiguities, fixing them often requires careful revision and negotiation, which can be time-consuming and complex. Additionally, some parties may choose to rely on legal interpretations and precedents rather than addressing ambiguities proactively.

Q&A on the Validity of Term Sheets and Scanned Contracts

Q1: Is there any jurisdiction in which a Term Sheet or a scanned copy of a Contract is not valid and unenforceable in the courts?

A1: The enforceability of a Term Sheet or a scanned copy of a Contract generally depends on the jurisdiction and the specific circumstances. Here are some key points:

• Consensus is Essential: In many jurisdictions, the enforceability of a contract, regardless of its form (including scanned copies), hinges on the existence of consensus or agreement between the parties on all essential provisions. The absence of consensus on essential terms may render the contract unenforceable.
• Formality Requirements: Some jurisdictions may have specific formality requirements for certain types of contracts. For example, contracts related to real property or shares might require a formal deed, while others can be in writing or even oral. The failure to meet these formality requirements could affect enforceability.
• Signature Validity: In some jurisdictions, the validity of signatures on scanned copies may be challenged. Some require all signatures to be original, while others accept electronic signatures in accordance with electronic signature laws.
• Intent Matters: The intent of the parties when drafting a document like a Term Sheet is crucial. If the Term Sheet clearly states that it is not intended to create binding obligations and merely serves as a guideline for a future contract, it may not be considered a binding contract itself.
• Evidence vs. Originals: In legal proceedings, scanned copies may be used as evidence, but there could be a requirement to produce the original or a certified copy during the proceedings, especially if the validity of the scanned copy is challenged.
• Legal Capacity: Parties to a contract must have the legal capacity to enter into it. If one of the parties lacks legal capacity (e.g., is a minor or mentally incapacitated), the contract may be deemed invalid.
• Jurisdiction-Specific Rules: Specific rules and requirements regarding the validity and enforceability of contracts can vary widely from one jurisdiction to another. It’s essential to consult legal experts familiar with the laws of the relevant jurisdiction.

In summary, the enforceability of a Term Sheet or scanned copy of a Contract is influenced by various factors, including the jurisdiction, the intent of the parties, formality requirements, and the specific content of the document. It’s advisable to seek legal advice to ensure compliance with applicable laws and to clarify the enforceability of such documents in a particular jurisdiction.

Q&A on Drafting Legal Agreements

Q1: What are your thoughts on the statement “Draft for an ordinary reader, not for a mythical judge who might someday review the document.” Especially in the context of drafting legal agreements, particularly agreements where all the parties are commercial entities. 

A1: The statement encourages plain and clear drafting, but there are nuances to consider in the context of legal agreements:

• Plain and Clear Drafting: The principle of drafting for an ordinary reader promotes clarity and avoids ambiguity in contracts. A contract that is readily understandable to the parties involved is less likely to lead to disputes.
• Natural and Ordinary Meaning: Courts generally interpret contracts based on the natural and ordinary meaning of the language used. If the drafting is clear, it may not need to be placed before a judge.
• Understanding by Industry Professionals: In certain industries like construction, contracts are not just legal documents but also serve as practical guides for professionals implementing the contract. Therefore, industry professionals need to understand the contract’s provisions, and clear drafting facilitates this.
• Consideration of Judges: While drafting for clarity is essential, it’s also important to consider how a judge might interpret the contract in case of a dispute. Judges may apply legal principles to resolve issues, and contracts should align with these principles.
• Definition of “Ordinary Reader”: The “ordinary reader” in legal contexts may not be an entirely uninformed person but rather a reasonable person with the background knowledge that the parties would reasonably have had at the time of the contract. This definition may vary depending on the legal jurisdiction.
• Complex Contracts: In some commercial contracts, especially complex ones, the drafting may need to cater to the understanding of industry professionals, lawyers, and judges. In such cases, plain language should still be used whenever possible to enhance comprehension.

In summary, drafting for an ordinary reader is a valuable guideline, but the context of the agreement, the industry involved, and the potential for legal disputes should all be considered. Balancing clarity with legal precision is the key to effective contract drafting.

Q&A on Drafting Contracts for Non-Disclosure Agreements (NDAs)

Q1: European/Swiss SME suppliers find that their standard NDA templates are often heavily edited when doing business in the U.S. SMEs want to streamline this process by providing a “minimum requirements list” instead of a full NDA template to potential U.S. customers. What insights can you offer on this issue?

A1: NDAs can indeed be a complex and potentially problematic area, especially when dealing with international parties. To streamline the process and provide a minimum requirements list for NDAs with U.S. customers, consider the following:

• Clear Definition of Confidential Information: Ensure the NDA includes a specific and clear definition of what constitutes Confidential Information. This definition should leave no room for ambiguity.
• Limited Term for Disclosures: Define the period during which Confidential Information will be shared. It should be clear when the confidentiality obligation begins and ends.
• Expiration of Confidentiality: Specify the duration for which the parties are obligated to keep the Confidential Information secret. This can vary based on the nature of the information and the needs of the parties.
• Exceptions to Disclosure Restrictions: Include a provision outlining exceptions to the disclosure restrictions. There is usually a standard list of acceptable exceptions that most parties can agree upon.
• Exclusions for Legal Disclosure: Address situations where Confidential Information may need to be disclosed for legal or regulatory reasons. This should be clear to both parties.
• Destruction of Confidential Information: Detail the process for the destruction or return of Confidential Information once the NDA’s term expires. Allow for reasonable retention of some Confidential Information for internal compliance purposes.
• Dispute Resolution Venue: Clearly define the venue for resolving disputes related to the NDA, such as the choice of jurisdiction or arbitration provisions.

By providing this minimum requirements list, you can offer a framework for NDAs that is concise, yet covers essential elements to protect both parties’ interests. However, keep in mind that legal requirements and industry practices can vary, so it’s advisable to consult with legal counsel familiar with U.S. contract law for specific situations.

Q2: What are some key considerations when drafting a contract for asset management in the Netherlands? I have experience with Nordic and German law, but I’m looking for insights into Dutch law. Is it more similar to French or German law?

A2: When drafting a contract for asset management in the Netherlands, here are some key considerations:

• Choice of Law: Determine the governing law of the contract. Dutch law is a civil law system, similar to French law. However, it’s also influenced by EU law and has unique aspects. You may want to consult with a Dutch legal expert to decide whether to adopt Dutch law or another jurisdiction.
• Regulatory Compliance: Ensure compliance with Dutch financial regulations and licensing requirements if the asset management involves financial services. The Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB) regulate financial activities.
• Contractual Clauses: Include standard contractual clauses, such as rights and obligations of parties, fee structures, performance benchmarks, and dispute resolution mechanisms. Dutch contracts often follow a civil law tradition with detailed provisions.
• Confidentiality and Data Protection: Address confidentiality and data protection requirements, as the Netherlands has specific data protection regulations (GDPR). Ensure that you handle personal data in compliance with EU and Dutch privacy laws.
• Dispute Resolution: Determine the preferred method for resolving disputes, which can include litigation in Dutch courts or alternative dispute resolution methods like arbitration.
• Termination and Exit Strategies: Clearly outline termination procedures and exit strategies, including notice periods and consequences of termination for both parties.
• Language: Dutch is the official language, but many business contracts are drafted in English. Ensure that the language of the contract is clear and unambiguous.
• Tax Considerations: Consider tax implications related to asset management in the Netherlands, including withholding tax on income, VAT, and other tax obligations.

It’s important to work with a legal expert who specializes in Dutch law or has expertise in international contract law to draft a contract tailored to your specific asset management arrangement. Dutch law shares some similarities with both French and German law but also has its unique characteristics, so understanding the nuances is essential.

Q&A on Drafting Force Majeure Clauses

Q1: Is there a specific format for drafting a standard Force Majeure clause?

A1: While there isn’t a one-size-fits-all format for Force Majeure clauses, they should be tailored to the specific situation, location, and industry. However, there are common elements to consider when drafting such a clause:

• Definition of Force Majeure: Start with a clear definition of what constitutes a Force Majeure event. This definition should be broad enough to encompass unforeseeable events beyond the parties’ control.
• List of Force Majeure Events: Enumerate the types of events that qualify as Force Majeure events. Include a non-exhaustive list to cover a range of possibilities but avoid overly specific examples.
• Exclusions: Specify what should not be considered a Force Majeure event. This helps prevent the clause from being invoked in situations that the parties want to exclude.
• Consequences: Detail the consequences of a Force Majeure event, such as granting time extensions for performance but typically not additional costs.
• Mitigation: State that both parties have a duty to mitigate the impact of a Force Majeure event to the extent possible.
• Payment Obligations: Clarify that payment obligations remain in effect even during a Force Majeure event unless expressly stated otherwise.
• Prolonged Force Majeure: Address prolonged Force Majeure events by including a backstop date that allows either party to terminate or suspend the contract if the event persists beyond a specified timeframe.

Remember that Force Majeure clauses should be location and industry-specific. Consider the local conditions, potential risks, and any unique aspects of the transaction. Additionally, the wording of the clause can vary based on the negotiation power of the parties involved. Consulting with legal experts is advisable to ensure the clause aligns with your specific needs and potential risks.

Q&A on the Difference Between Gross Negligence and Plain Negligence

Q1: What is the difference between gross negligence and plain negligence?

A1: The difference between gross negligence and plain negligence lies in the degree of fault and carelessness involved in a person’s actions or omissions. Here’s an explanation with examples:

Plain Negligence: Plain negligence refers to a failure to exercise reasonable care or caution that a prudent person would under similar circumstances. It involves inadvertent mistakes, carelessness, or a lack of proper judgment. For instance, if someone accidentally leaves their keys inside a locked car, it would be considered plain negligence.

Gross Negligence: Gross negligence, on the other hand, is a higher degree of negligence characterized by a conscious or reckless disregard for the safety and well-being of others. It involves a more extreme level of carelessness and indifference. An example of gross negligence would be if someone intentionally parked their car without applying the handbrake on an inclined driveway, fully aware of the potential risks, and a serious accident occurs as a result.

In summary, while plain negligence is the failure to meet the standard of care expected of a reasonable person, gross negligence involves a level of recklessness or intentional misconduct that goes beyond ordinary negligence. The distinction between the two can have legal implications, particularly in cases involving liability and damages.

Q&A on Drafting Contracts for Affiliate Relationships

Q1: We often sign agreements with procurement companies, but we end up delivering services to their affiliates. How can we mitigate this risk and ensure the affiliate complies with the agreement?

A1: To mitigate this risk, you can include specific provisions in your agreements. Here are some considerations:

• Affiliate Liability: State that when you deliver services to an affiliate, the contracting entity remains responsible and liable for the performance of its obligations under the agreement. This means the contracting entity is accountable for any acts, omissions, or breaches by the affiliate.
• Obligation Procurement: Include a clause where the contracting entity must ensure that the affiliate complies with the terms of the agreement. This emphasizes their responsibility for the affiliate’s compliance.

Q2: Many group companies require their affiliates to have the benefit of the agreement and the ability to enforce it. How can we address this, especially concerning the “benefit language”?

A2: To address this issue, consider the following steps:

• Reject Benefit Language: You can outright reject the inclusion of “benefit language” in your agreements. This ensures that only the contracting entity is party to the agreement.
• Enforcement Rights: Specify that the contracting entity has the right to enforce the agreement on behalf of its affiliates. However, make it clear that the contracting entity remains responsible and liable for its obligations under the agreement and for any actions or breaches by the affiliate.
• Compliance Obligation: State that the contracting entity must procure that its affiliate complies with all the terms of the agreement.
• Loss Recovery: Include a provision allowing the contracting entity to recover losses on behalf of an affiliate as if they were its own losses.
• No Double Recovery: In any legal proceedings initiated on behalf of the affiliate(s), specify that there should be no double recovery, ensuring clarity in case of claims.

These measures can help you address the concerns raised by group companies while still maintaining control and minimizing risks in your agreements.

Q&A on Assignment Clauses and Third-Party Enforcement

Q1: In Sweden, we often use “Assignment clauses” in contracts, but can they be enforced against third parties when one party wants to sell the invoice to a bank, for example?

A1: The enforceability of assignment clauses can vary depending on the jurisdiction. Here’s some information from different countries:

• France: French law has seen conflicting decisions. One ruling prioritized the privity of contract rule, suggesting that a bank purchasing accounts receivable may not be bound by the assignment prohibition. (Cass. com, 21 novembre 2000). However, another decision allowed the assigned party to invoke the contractual restrictions against the assignee (Cass. Com, 22 octobre 2002).
• France (Updated): The French Commercial Code now prohibits clauses preventing a creditor from assigning their claim to a third party (Code de Commerce L-442-6). This generally favors the assignee, who is not obliged to check if the assignor is allowed to assign the claim.
• Sweden: In Sweden, assignment clauses are recognized as valid between the parties but may not necessarily be enforceable against third parties. Specific Swedish legal references would be needed to provide more details.
• India: In India, the nature of the transaction and the terms of the contract matter. Absolute transfers may not be bound by assignment clauses, but conditional transfers could be. However, this depends on the specifics of the contract.
• Japan: Japanese law allows assignment of rights to third parties unless prohibited in the contract. Non-assignment clauses are generally valid. The contract is valid only between the parties, and third parties cannot claim rights under it.
• United States: In some U.S. jurisdictions, unless a contract specifies novation, the assigning party remains secondarily responsible. This allows you to hold the assignor secondarily responsible if the assignee fails to perform.

Enforceability can vary significantly, so it’s essential to consider the specific jurisdiction and contract terms when dealing with assignment clauses and third-party involvement.

Q2: In jurisdictions that prevent assignment, does the concept of novation exist?

A2: In many jurisdictions, including the United States, the concept of novation exists. Novation occurs when the parties to a contract agree to substitute one party with another, effectively releasing the original party from all obligations. Novation is typically used when both parties agree to transfer all rights and obligations to a third party, essentially creating a new contract.

Novation can be a useful tool when dealing with assignment clauses, as it provides a clear mechanism for transferring responsibilities and liabilities to a third party. However, novation typically requires the consent of all parties involved, and the contract often explicitly states that novation is occurring. It’s crucial to understand the legal requirements and implications of novation in your specific jurisdiction and contract situation.

Q&A on Managing Contracts with Subsidiaries and Affiliates

Q1: How do you (as a company manage contracts with subsidiaries and affiliates, considering liability, separate agreements, and local laws?

A1: Managing contracts with subsidiaries and affiliates involves several considerations:

• Separate Agreements: Depending on the situation, it may be prudent to have separate agreements with subsidiaries or affiliates. This allows you to isolate risks and liabilities. For example, if one subsidiary fails to meet its obligations, only its agreement is at risk of termination.
• Liability Protection: To protect against the potential liabilities of subsidiaries or affiliates, consider the following:
  • Parent Company Guarantee: Ensure the parent company provides a guarantee for the subsidiary’s obligations. This gives you recourse to the parent company’s resources.
  • Financial Security: Require financial securities, such as bank guarantees or letters of credit, from subsidiaries or affiliates to cover potential breaches or defaults.
  • Indemnification: Include subsidiaries and affiliates as indemnities in the contract to hold them responsible for their actions.
• Choice of Law and Jurisdiction: Specify the applicable law and jurisdiction in the contracts. Ensure these terms comply with local laws in the jurisdictions where subsidiaries or affiliates operate.
• Inter-Company Contracts: If services are provided by subsidiaries or affiliates, have inter-company contracts in place with agreed charges. This is crucial, especially for services that are challenging to quantify.
• Parental Guarantee: If the parent company has partial ownership, a parental guarantee should provide you with rights to the full amount stated in case of a breach. Ensure that the parent company indeed has the financial capacity to fulfill the guarantee.
• Assess Financial Health: Regularly assess the financial health of subsidiaries and affiliates to gauge their ability to fulfill contract obligations.
• Risk Mitigation: Be proactive in identifying and mitigating risks rather than waiting for disasters to occur.

Remember that the approach can vary depending on the specific subject matter of the contract and the jurisdiction in which subsidiaries and affiliates operate.

Q2: What should you do if a subsidiary fails to meet its contractual obligations with a supplier, and the supplier is starting the termination process?

A2: If a subsidiary is at risk of not meeting its contractual obligations with a supplier, and termination is looming, consider the following actions:

• Assess the Situation: Carefully assess the reasons for the subsidiary’s failure to meet obligations. Determine if it’s a temporary issue or a systemic problem.
• Parent Company Guarantee: If a parent company guarantee is in place, notify the parent company of the situation. They may need to step in to fulfill the subsidiary’s obligations to prevent termination.
• Negotiation: Engage in negotiations with the supplier to find a solution that satisfies their concerns and keeps the contract intact. This could involve financial compensation, revised timelines, or other mutually agreeable terms.
• Payment: If necessary, consider making the payment on behalf of the subsidiary to the supplier to prevent termination. You can then seek reimbursement from the subsidiary or parent company based on the contractual arrangements.
• Review Contract Terms: Evaluate the contract terms and obligations to ensure they are fair and realistic, and adjust them if necessary to prevent future breaches.
• Prevent Future Issues: Take steps to prevent similar issues in the future, such as improving communication, monitoring subsidiary performance, and addressing root causes.

Remember that every situation is unique, and the appropriate course of action may vary based on the specific circumstances and contractual arrangements.

Q&A on Defining Losses in Limitation of Liability Clauses

Q1: How can losses be defined in limitation of liability clauses?

A1: Defining losses in limitation of liability clauses is essential for clarifying the scope of damages that can be claimed in case of a breach or dispute. Here are some considerations:

• Direct vs. Consequential Losses: Clearly distinguish between direct losses and consequential losses. Direct losses are typically the immediate and foreseeable damages that directly result from a breach. Consequential losses, on the other hand, are indirect or remote damages that result from the breach but are not the immediate consequence.
• Natural, Probable, and Reasonably Foreseeable: In many jurisdictions, damages are limited to those that are a natural, probable, and reasonably foreseeable consequence of the breach. This inherent limit excludes damages that are too remote or speculative.
• Specific Categories: If the contract involves specific categories of damages, such as loss of profits or property damage, explicitly mention these categories and whether they are considered direct or consequential.
• Exclusions: Specify any excluded damages explicitly. For example, you may want to exclude remote or speculative damages, emotional distress, or punitive damages.
• Indemnity and Caps: Consider using financial caps on damages or indemnity provisions to provide additional clarity on liability limits. These can help avoid disputes over the extent of liability.
• Jurisdiction-Specific Considerations: Be aware of jurisdictional quirks and legal limitations on limiting or excluding certain types of damages. In some jurisdictions, personal injury or serious property damage may not be subject to limitations.
• Attention to Special Provisions: If there are unique or special aspects of the contract that may affect the scope of damages, ensure these are explicitly addressed in the limitation of liability clause.

Remember that clear and precise drafting is crucial to avoid misunderstandings and disputes over the scope of damages that can be claimed. However, keep in mind that overly complex or sophisticated drafting may not always be effective and could be challenged on public policy grounds in some jurisdictions.

Q&A on Drafting Contracts and Liability for High-Risk Work

Q1: How can contractors protect themselves when undertaking high-risk work, such as performing hot cutover in a live refinery?

A1: Contractors can protect themselves in high-risk situations by negotiating clear contract terms and indemnities. In scenarios like performing hot cutover in a live refinery, where potential catastrophic consequences exist, indemnification clauses can be crucial. The refinery owner may indemnify the contractor for any damages, injuries, or pollution resulting from the work. This shifts the liability from the contractor to the owner, making it feasible for the contractor to undertake the work.

Q2: Is there a difference in how liability for damages is handled in different legal systems, such as China or India?

A2: Yes, liability for damages can vary significantly between different legal systems. In some jurisdictions, like China, liability provisions may produce draconian results, holding contractors strictly liable for damages even in high-risk scenarios. In India, the law generally allows for direct damages caused by a breach, while indirect or consequential damages are not allowed, except in specific circumstances. It’s essential to consider the legal framework and consult with legal experts when drafting contracts in different jurisdictions.

Q3: What is the role of liquidated damages in contracts, and how do they differ from general caps on liability?

A3: Liquidated damages are predetermined amounts specified in a contract that parties agree to pay in case of a breach. They serve as a pre-established measure of damages and can simplify the process of assessing and proving losses in case of a breach. General caps on liability, on the other hand, limit the overall liability of the parties but may not specify the exact amount. Both can be useful in contracts, depending on the circumstances and the types of risks involved.

Q4: What’s the benefit of clearly defining risks in a contract rather than relying on a general liability cap?

A4: Clearly defining risks in a contract provides greater transparency and specificity regarding the types of risks that parties are willing to accept. It allows parties to allocate responsibility for specific risks and ensures that both parties understand their obligations and potential liabilities. While general liability caps provide an upper limit on overall liability, defining risks explicitly can help avoid disputes and ensure that each party bears the appropriate responsibility for identified risks.

Q5: In India, how are damages typically handled when they are not predetermined or liquidated?

A5:As far as we know about Indian law, when damages are not predetermined or liquidated, they can be challenging to assess and prove. Typically, Indian law allows for the recovery of direct damages that result directly from a breach of contract. Indirect or consequential damages are generally not awarded unless specific circumstances apply. The burden of proving damages may be on the party seeking compensation, and courts will assess the damages based on the evidence presented.

Q&A on Drafting Contracts: Time of the Essence and Liquidated Damages

Q1: Is there a conflict between the “Time is of the Essence” provision and a “Liquidated Damages” clause for late delivery of goods when both are stipulated in the contract?

A1: There isn’t necessarily a conflict between a “Time is of the Essence” (TOE) provision and a “Liquidated Damages” (LD) clause in a contract. These two provisions serve different purposes.

• TOE Clause: It emphasizes the importance of adhering to the agreed-upon schedule and makes timely performance a fundamental aspect of the contract. It typically implies that any delay in performance is considered a material breach, allowing the innocent party to terminate the contract if the timeline is not met.
• LD Clause: This clause sets out predetermined damages that a party must pay if they fail to meet the agreed-upon deadlines. LDs are designed to compensate the innocent party for losses incurred due to the delay.

In practice, the presence of both clauses serves to ensure that time is indeed of the essence, but the LD clause provides a specific remedy for delays. The LDs act as a form of compensation while TOE reinforces the importance of meeting deadlines.

Q2: Can an LD clause be considered the exclusive remedy for a specific breach, or can other remedies still be pursued?

A2: An LD clause can indeed be structured as the exclusive remedy for a specific breach, such as late delivery of goods. When properly drafted, it can limit the remedies available to the innocent party solely to the liquidated damages specified in the contract. However, the exclusivity of the LDs depends on the language and intent of the clause.

It’s essential to make it clear within the contract that LDs are the sole and exclusive remedy for a particular type of breach, leaving no room for additional remedies, including common law claims. Poorly drafted clauses that do not specify exclusivity may leave room for other remedies to be pursued.

Q3: Are there circumstances where LDs and other remedies can coexist in a contract?

A3: LDs and other remedies can coexist in a contract, but it’s crucial to define how they interact to avoid ambiguity or conflicts. The contract should explicitly outline:

• Which types of breaches or defaults trigger LDs.
• The specific amount of LDs for each type of breach.
• Whether LDs are the exclusive remedy for those breaches.
• Any other remedies available for different types of breaches.

By clearly delineating the role of LDs and other remedies in the contract, parties can effectively manage their rights and obligations in case of a breach.

Q4: How can a “Time is of the Essence” clause and an LD clause work together effectively in a contract?

A4: “Time is of the Essence” (TOE) and an LD clause can work together effectively by reinforcing the importance of meeting deadlines and providing a remedy for delays. Here’s how they can complement each other:

• TOE Clause: Emphasizes the critical nature of timely performance, making it clear that any delay is a material breach. This encourages both parties to prioritize meeting deadlines.
• LD Clause: Specifies the predetermined damages that the party responsible for a delay must pay. It serves as a financial incentive to prevent delays and compensates the innocent party if delays occur.

Together, these clauses create a framework where parties are motivated to meet deadlines, and if they fail to do so, there’s a clear mechanism for compensation. The TOE clause sets the expectation, while the LD clause provides a quantifiable remedy in case of a breach.

Q5: How can LDs be structured to progressively reduce as work progresses, and what happens if they are exhausted before the end of the maximum time?

A5: LDs can be structured to progressively reduce as work progresses by calculating them based on the remaining work or time. This approach encourages contractors to expedite their work and meet milestones.

If LDs are exhausted before the end of the maximum time, it typically means that the contractor’s performance is significantly delayed and poor. In such cases, the contract may have provisions for other remedies, such as termination, and may also address the liquidation of performance bonds or guarantees. Exhaustion of LDs serves as a signal that the delay is severe, and other contractual mechanisms come into play to protect the interests of the innocent party.

Q&A on Drafting Contracts: Signatures and Authorization

Q1: Are there any legal consequences if a party to a contract discovers that the other party’s signature is not the authorized signatory, and is it necessary for every party to sign every page, or are initials enough?

A1: The legal consequences can vary depending on the jurisdiction and the specific circumstances. Here are some general considerations:

• Signature Authority: It’s essential to ensure that the person signing the contract on behalf of a company or organization has the proper authority to do so. If an unauthorized signatory signs a contract, the contract might be voidable or unenforceable, especially if the other party was unaware of the lack of authority.
• Ratification: In some cases, a contract signed by an unauthorized person may be ratified by the company or organization if they later acknowledge and accept the contract’s terms. However, ratification isn’t guaranteed and may depend on various factors.
• Verification: To avoid disputes, it’s common practice to request proof of the signatory’s authority, such as a copy of a resolution passed by the company’s board of directors authorizing the signing party to enter into the contract.
• Initials vs. Full Signatures: While initialing every page can be a practical way to confirm that the entire document has been reviewed, the most critical aspect is the full signature on the final page where the contract’s terms are accepted. Initials on other pages may serve as an additional form of confirmation but are not a substitute for the final signature.

It’s crucial to consult with legal counsel and follow the specific legal requirements and practices in your jurisdiction when dealing with signature authorization in contracts.

Q2: How can the authorization of signatories be ensured in contracts?

A2: Ensuring the authorization of signatories in contracts can be done through several measures:

• Authorizing Resolutions: Require the party signing on behalf of an organization to provide a certified copy of a resolution passed by the organization’s board of directors or governing body authorizing that person to sign the contract.
• Certificate of Non-Revocation: Include a provision in the contract where the signatory certifies that their authority to sign has not been revoked or altered in any way.
• Official Stamps or Seals: In some jurisdictions, official company stamps or seals are used in conjunction with signatures to signify authorization. Ensure that the stamp or seal is registered and legitimate.
• Confirmation of Identity: Verify the identity of the signatory through appropriate identification documents, especially if there is any doubt about their authority.
• Legal Review: Have legal counsel review the contract to ensure that the signatory has the proper authority and that the contract is legally sound.
• Notary Public: Consider having the contract notarized, which provides an additional level of verification of the signatory’s identity and authority.

Ultimately, the specific measures taken may vary based on legal requirements and industry practices in your jurisdiction. Consulting with legal experts is advisable to ensure proper authorization in contracts.

Q&A on Drafting Contracts: Drop Dead Date Provision in Lease Agreement

Q1: Does anyone have any suggestions on wording for a drop dead date provision to be included in a lease agreement as the last possible date on which the Landlord shall complete its construction works and deliver the premises to the Tenant for starting business?

A1: Crafting a drop dead date provision in a lease agreement requires careful consideration of the specific circumstances and the desired remedies for potential delays. Here are some suggestions for wording:

• Definition of Drop Dead Date: “The ‘Drop Dead Date’ shall mean [insert specific date], which shall be the final date by which the Landlord shall complete all construction works and deliver the premises to the Tenant in accordance with this lease agreement.”
• Remedies for Delay: Specify the remedies available to the Tenant in case of a delay, such as:
  • Liquidated Damages: “In the event the Landlord fails to meet the Drop Dead Date, the Landlord shall pay to the Tenant liquidated damages in the amount of [insert specific amount] for each day of delay beyond the Drop Dead Date, not to exceed a total of [insert maximum amount].”
  • Right to Terminate: “If the Landlord fails to meet the Drop Dead Date, the Tenant shall have the right to terminate this lease agreement with immediate effect upon written notice to the Landlord.”
• Tenant’s Rights: Consider including provisions regarding the Tenant’s rights during the construction phase, such as the ability to make tenant improvements, subject to Landlord’s approval, with costs reimbursed by the Landlord.
• Force Majeure: Address whether the Landlord may be excused from delays due to force majeure events beyond their control, but clearly define what constitutes a force majeure event.
• Tenant’s Costs: Specify whether the Landlord is responsible for any costs incurred by the Tenant, such as hotel accommodation, storage, or commuting expenses, in case of delay.
• Tenant’s Right to Extend: If Tenant’s actions or approvals are necessary for completion, include a clause allowing the Tenant to grant reasonable extensions to the Drop Dead Date if the Tenant’s actions cause delays.
• Default Remedies: Include language about default remedies in case the Landlord fails to pay liquidated damages or address delays appropriately.

Remember that the specific wording and details should align with the legal requirements and practices in your jurisdiction. Consulting with legal counsel is advisable to ensure the provision is comprehensive and enforceable.

Q&A on Drafting Contracts: Neutral Choice of Law and Jurisdiction

Q1: What factors do you consider while deciding a neutral choice of law (governing laws) and jurisdiction? And the reason for the same?

A1: The choice of law and jurisdiction in a contract is a crucial decision that depends on various factors. Here are considerations and reasons for selecting a neutral choice:

• Enforceability: One of the primary factors is the enforceability of decisions in the chosen jurisdiction. Parties often opt for jurisdictions that are signatories to international conventions like the New York Convention on Arbitration to ensure enforceability worldwide.
• Legal System: The legal system, whether common law or civil law, can significantly impact how disputes are resolved and how contracts are interpreted. Consider which legal system aligns best with the contract’s nature.
• Neutrality: Neutrality refers to selecting a jurisdiction that is not the domicile of either party to avoid home court advantages. This fosters fairness and impartiality in dispute resolution.
• Language: The language of the chosen jurisdiction should be practical for contract interpretation and dispute resolution. Multilingual jurisdictions may offer advantages.
• Experience: Jurisdictions with well-developed bodies of contract law and experienced judges or arbitrators provide predictability and reliability in contract enforcement.
• Costs: Consider the costs associated with litigation or arbitration in the chosen jurisdiction. Some jurisdictions may be more cost-effective than others.
• Conventions and Treaties: Analyze whether the chosen jurisdiction is a party to international conventions and treaties that affect contract enforcement, such as the Hague Convention on Choice of Court Agreements.
• Cultural Alignment: Parties may prefer jurisdictions that align culturally or economically with their business operations to facilitate understanding and compliance.
• Security of Transactions: Assess the legal infrastructure and stability of the chosen jurisdiction to ensure security and protection of contractual rights.
• Practicality: Consider the practical aspects of litigation or arbitration in the chosen jurisdiction, such as the availability of experienced legal counsel and ease of travel.

The choice of law and jurisdiction should be made carefully, taking into account these factors to ensure a fair, efficient, and enforceable contract. Consulting with legal experts with knowledge of international contract law is advisable to make an informed decision.

Q&A on Drafting Contracts: Limitation of Liability and Consequential Damages

Q1: How do you draft a limitation of liability clause to avoid having to pay for loss of profits as a result of breach? Also, can a party claim a refund of the purchase price plus interest as well as loss of profit? Is that not a double penalty? However, I find the difference between direct and consequential damages is not so straightforward. Is there a way to draft a clause that limits damages to direct losses only, or will the court still interpret the clause based on the facts despite what we draft?

A1: Drafting a limitation of liability clause to exclude liability for loss of profits or other consequential damages requires careful consideration of language and specific terms. Here are some points to consider:

• Clear Language: Use clear and unambiguous language in the clause to specify the types of damages that are excluded. State explicitly that consequential damages, including loss of profits, are not recoverable.
• Enumerate Categories: Enumerate specific categories of damages that are excluded, such as indirect, consequential, incidental, special, or punitive damages.
• Define Direct Damages: Define “direct damages” in the contract to make it clear what is meant by this term and that it is the only category of damages recoverable.
• Reasonableness: Ensure that the limitation of liability clause is reasonable and not overly broad. Some jurisdictions may require reasonableness to uphold such clauses.
• Negotiation: Discuss the clause with the other party during contract negotiations to reach a mutual understanding and agreement on the scope of liability.
• Mitigation: Consider including a clause that requires both parties to take reasonable steps to mitigate damages in case of a breach.

Regarding the claim for a refund of the purchase price plus interest and loss of profit, this can be seen as a double penalty. To address this, you can include a provision that limits damages to the greater of either the purchase price or direct losses incurred. This would prevent the double recovery of the purchase price plus profit.

However, it’s important to note that the interpretation of such clauses can depend on the specific facts of each case, and courts may consider whether the parties reasonably foresaw such damages. Consulting with legal experts and having clear, well-drafted clauses is essential to minimize the risk of disputes and ensure the enforceability of the limitations of liability.

Q&A on Contract Interpretation: “Price Modification Clause”

Q1: I would like to receive your feedback on the interpretation of the following sentence: “the price agreed upon can be modified by both parties.” According to your interpretation, does this mean that the price can be modified unilaterally by each party or that it needs the agreement of both parties together for modification?

A1: The interpretation of this sentence can vary depending on the specific contract language and the legal principles in play. Here are some responses from legal professionals:

• Consent of Both Parties: Many responders interpret this sentence to mean that the price can only be modified with the mutual agreement of both parties. They emphasize that any modification should be jointly agreed upon.
• Ambiguity: Some note that the sentence is ambiguous and lacks clarity, which can lead to different interpretations. They suggest that it’s better to explicitly state whether unilateral modifications are allowed.
• Contract Completion: Others point out that an agreement should first allow for the fixation of a price. If the price is not fixed or there’s no indication of how to fix it, the agreement may not be complete. Therefore, they interpret it as requiring mutual agreement for any price modification.
• Clarity in Wording: Suggestions are made to improve the clarity of the clause by explicitly stating, “the contract price may be modified at any point by consent of both parties.”
• Unilateral Modification: Some responders caution against unilateral modifications, emphasizing that once a contract is signed, neither party should be allowed to unilaterally change terms, including the price, without the other party’s consent.
• Contract as a Whole: It’s highlighted that the interpretation should consider the entire contract rather than just an isolated sentence.

Ultimately, while the preferred interpretation is that price modifications require the agreement of both parties, the lack of clarity in the sentence may lead to differing viewpoints, making it essential to draft contracts with precision and clarity to avoid disputes.

Q&A on Fixing Breach Notification Terms in International Contracts

Q1: We (a company in Uk) have a clause specifying a fixed term for notifying a breach of the contract, such as fifteen business days. However, the contract involves product distribution in twelve Arabian countries. How should we handle this, considering national, regional, and local holidays in different jurisdictions?

A1: Here are some suggestions for handling breach notification terms in international contracts with varying holidays:

We recommend defining a “business day” as a day when banks are open for business in a specific city, such as London. This definition helps account for exceptional circumstances like national emergencies or natural disasters that may lead to business closures but are not considered national or religious holidays. It also addresses issues with local holidays that may not be recognized.
Please also remember that Force Majeure clauses typically exclude payments, so you may need to adjust your Force Majeure or payment clauses to cover situations where banks are closed due to unexpected events, such as natural disasters or emergencies, that affect payment processes.

Q&A on Maritime Law Clause in Bill of Lading

Q1: I encountered a maritime law clause in a Bill of Lading that includes a statement at the beginning: “This clause to remain in force even if unenforceable in the courts of the United States of America…” Why would someone add such a statement to the clause?

A1: The addition of the statement “This clause to remain in force even if unenforceable in the courts of the United States of America…” could serve a few purposes:

• Attempt to Preserve Clause: It may be an attempt by the party drafting the Bill of Lading to emphasize their intent to keep the clause in effect regardless of its enforceability under U.S. law. This could be a strategic move to dissuade the counterparty from challenging the clause based on U.S. legal standards.
• International Applicability: The Bill of Lading might be used in international shipping, and parties could be subject to different legal jurisdictions. By including this statement, the drafter may intend to make it clear that the clause applies universally, irrespective of U.S. legal considerations.

Q2: My boss is the owner of the cargo, but shouldn’t carriers have a broader scope of liability, especially in cases of negligence by their agents or other carriers? Why should my client agree to a term like this unless required by law?

A2: Your concern regarding the scope of liability is valid. Typically, carriers, including their agents and subcontractors, have a significant degree of liability for the cargo they transport, including liability for negligence.

The inclusion of such clauses in contracts, like the one you’ve encountered, often reflects an attempt by the carrier or the party drafting the contract to limit their liability beyond what is typically imposed by law. However, such clauses may not always be enforceable, particularly if they attempt to limit liability to an extent that goes against applicable maritime laws and regulations.

It’s advisable for your boss to carefully review and negotiate the terms of the Bill of Lading and consult with legal counsel experienced in maritime law if needed. They should ensure that the contractual terms align with the relevant legal requirements and provide adequate protection for their cargo. If a clause appears to excessively limit liability or contravene applicable laws, it may be subject to challenge and modification during contract negotiations.

Q&A on Collateral Contracts Varying Main Contracts

Q1: In my jurisdiction, can a collateral contract vary the terms of the main contract?

A1: In many jurisdictions, including England, a collateral contract can indeed vary the terms of the main contract under certain conditions. A collateral contract is a separate contract that is related to the main contract but exists alongside it. To vary the terms of the main contract through a collateral contract, the following conditions are typically required:

• Clear Intent: There must be a clear intent by the parties to create a collateral contract that varies the main contract.
• Consistency: The terms of the collateral contract must be consistent with the main contract and must not contradict it.
• Consideration: Generally, each contract, including the collateral one, must have its consideration (something of value exchanged).
• Communication: The parties must communicate their intent and agreement to the terms of the collateral contract.

However, the specific rules and requirements for collateral contracts can vary by jurisdiction and the individual circumstances of the case. It’s essential to consult with legal counsel familiar with the laws of your jurisdiction to get precise guidance.

Q2: Can you provide more information about the case in the English Court of Appeal where a collateral contract was used to vary the main contract?

A2: The case you mentioned from the English Court of Appeal is indeed interesting. In this case, the court used the concept of a collateral contract to vary the terms of the main contract, which involved the sale of a high-performance car, a Porsche.

The critical aspect was that there was an oral collateral contract, distinct from the written main contract, that had been entered into by the parties. This oral collateral contract stated that the buyer would be “first in line” to receive an allocation of the car. Later, a written contract was provided that included a clause stating that the buyer might not be first in line.

The court, in this case, found that the oral collateral contract varied the terms of the main written contract. This decision was based on the principle that a collateral contract can have the effect of varying the terms of the main contract, especially when there is clear evidence of the parties’ intentions and actions.

However, it’s important to note that contract law can be complex, and the outcome of similar cases can vary depending on the specific facts and the jurisdiction in which they are heard. Legal advice should be sought when dealing with such matters to ensure that the applicable laws and principles are properly understood and applied.

Q&A on Ownership of Foreground Intellectual Property (IP) in Supply Contracts

Q1: In our supply contract, why should the Buyer be entitled to the Rights to Foreground IP created by the Supplier during the contract, especially when it results from product customization or information provided by the Buyer?

A1: The ownership of Foreground IP in supply contracts can be a complex matter and depends on the specific circumstances and negotiations between the Buyer and the Supplier. Here are some considerations:

• Customization and Investment: If the Buyer requests customization or invests resources in developing specific features or modifications to the product, they may argue that they should have rights to the resulting Foreground IP as they contributed to its creation.
• Competitive Advantage: Buyers may seek ownership of Foreground IP to gain a competitive advantage. It allows them to control the use and development of the IP without depending on the Supplier.
• Negotiating Leverage: Ownership of Foreground IP can be a point of negotiation. The Buyer may be willing to pay a premium for it, and the Supplier may agree to transfer ownership in exchange for higher compensation.
• Balancing Interests: Both parties should consider their respective interests. If the Foreground IP is vital to the Buyer’s business or product differentiation, they may have a strong case for ownership. However, Suppliers may also want to retain rights to use the IP for other clients or future projects.

Ultimately, the allocation of Foreground IP ownership should be carefully negotiated and documented in the contract to reflect the parties’ intentions and the value contributed by each party.

Q2: What alternatives can be considered regarding ownership of Foreground IP in supply contracts?

A2: Several alternatives to outright ownership of Foreground IP can be considered in supply contracts:

• Non-Exclusive License: Instead of transferring ownership, the Supplier can grant the Buyer a non-exclusive license to use the Foreground IP for specific purposes, such as operating and maintaining the supplied goods. This allows the Buyer to use the IP without exclusive ownership.
• Perpetual Free License: The Supplier can offer a perpetual, royalty-free license to the Buyer, allowing them to use the Foreground IP but not commercially exploit it. This can be a win-win compromise.
• Shared Ownership: If both parties contribute significantly to the creation of the Foreground IP, they might opt for shared ownership, where each party has rights to use and exploit the IP. However, shared ownership can be complex to manage.
• Assignment of Limited Rights: The Supplier can assign specific rights to the Buyer, such as the right to use the IP for a defined purpose or within certain geographic boundaries, while retaining other rights.

The choice of alternative depends on the specific needs and priorities of both parties and should be clearly defined in the contract to avoid future disputes.

Remember that IP matters can be legally complex, and it’s essential to seek legal advice to ensure that the terms of the contract align with your business goals and comply with applicable laws and regulations.

Q&A on Contract Provision Regarding Survival of Obligations

Q1: What does “material benefit” mean in the provision regarding survival of obligations in the contract? Is it related to the Material Benefit Rule?

A1: “Material benefit” in this context is not a well-defined legal term, and its meaning may vary depending on the context and the intent of the parties. It does not necessarily refer to the Material Benefit Rule, which is a legal doctrine used in some jurisdictions to determine whether a contract modification is enforceable.

In the context of the provision you provided, “material benefit” appears to qualify the term “benefit,” suggesting that only obligations that provide a significant or substantial advantage to the parties should survive termination or expiration of the agreement. It may be interpreted as excluding obligations that are minor or inconsequential.

However, the exact meaning of “material benefit” should ideally be clarified in the contract to avoid ambiguity and ensure both parties have a clear understanding of which obligations will survive. If it’s not defined in the contract, its interpretation may depend on the specific circumstances and any relevant legal principles in the governing jurisdiction.

Q2: Should “material benefit” be defined in the contract?

A2: Defining “material benefit” in the contract could be a prudent approach to avoid potential disputes and provide clarity to the parties regarding the scope of obligations that will survive termination or expiration. By including a definition, you can specify the criteria or factors that determine whether an obligation qualifies as having a “material benefit.”

A defined term might include factors such as the significance of the obligation to the overall purpose of the contract, the economic value it provides, or its impact on the parties’ rights and obligations. This can help prevent differing interpretations and provide a clear standard for evaluating which obligations survive.

Q3: Is there any court judgment or arbitration award regarding material benefit in survival provisions?

A3: The interpretation of terms like “material benefit” in contract survival provisions may vary based on the specific language used in the contract, the governing law, and the facts of the case. Court judgments and arbitration awards often rely on the wording of the contract and the intent of the parties when determining the applicability of such provisions.

To find relevant case law or arbitration awards on this specific term, you would need to conduct legal research within the jurisdiction and legal system that governs the contract in question. Additionally, contract disputes are fact-specific, and outcomes can depend on various factors, making it essential for you to consult with legal counsel experienced in contract law in the relevant jurisdiction for specific guidance and case law research.We can advise you specifically about this in the context of Pakistan only.

Q&A on Export Permit Responsibility in Contracts

Q1: I am the seller, and the buyer wants to appoint the exporter and be responsible for all costs related to the exporter’s duties. However, FAS/FOB terms require the seller to clear the goods for export. How do I draft this clause?

A1: It’s important to draft the clause in a way that aligns with the buyer’s intentions and the chosen Incoterms (FAS/FOB). Here’s how you can address this situation:

• Define Roles and Responsibilities: Clearly specify the roles and responsibilities of both parties in the contract. While FAS/FOB terms typically place the responsibility of clearing goods for export on the seller, you can define exceptions or special arrangements.
• Buyer’s Appointment of Exporter: Acknowledge that the buyer has the right to appoint an exporter. Clearly state that the buyer will bear all costs associated with this appointment, including any costs related to the exporter’s duties. This shows the buyer’s active involvement in this aspect of the transaction.
• Seller’s Compliance with Incoterms: Emphasize that, despite the buyer’s appointment of the exporter, the seller will comply with the chosen Incoterms (FAS/FOB). This means the seller will fulfill its obligations under these terms, including making the goods available for export at the specified location (e.g., the port) and within the agreed-upon timeframe.
• Exporter’s Role: Specify the exporter’s role and obligations. Make it clear that the exporter will act on behalf of the buyer, following the buyer’s instructions and complying with all export regulations and requirements. This includes obtaining any necessary export permits or licenses.
• Communication and Cooperation: Stress the importance of open communication and cooperation between both parties and the appointed exporter. Ensure that any information or documentation required for export permits is promptly provided by the buyer to the exporter.
• Dispute Resolution: Include a clause for resolving disputes or discrepancies that may arise in the export process, such as delays or permit-related issues. Specify a mechanism for addressing these matters amicably.

By addressing these points, you can draft a clause that reflects the buyer’s desire to appoint an exporter and take responsibility for related costs while ensuring compliance with the chosen Incoterms and export regulations. It’s essential to consult with legal counsel experienced in international trade and contracts to tailor the clause to your specific situation and jurisdiction.

Recent queries from August 2023

Please let me know how  girdawry of shamilat is done?

Girdawari, also known as Shajra Nasab Girdawari, is a vital land record maintenance process used in agricultural communities in countries like Pakistan and India. It involves the preparation and updating of land ownership and cultivation records. The primary purpose of girdawari is to determine the ownership and tenancy status of land, as well as to record details about crops, their condition, and the overall agricultural activities on a piece of land.

Here’s how the girdawari process is typically carried out:

Preparation and Planning: Local authorities, often in collaboration with revenue and land record departments, plan and announce the dates for conducting the girdawari. Farmers and landowners are informed in advance about the schedule.

Field Survey: Girdawari teams, consisting of revenue officials and field staff, visit each plot of land to conduct a physical survey. They verify the boundaries of the land, document the number of cultivated and uncultivated fields, and record details of ownership and tenancy.

Updating Ownership Records: During the girdawari, officials update the land ownership records to reflect any changes that may have occurred since the last survey. This includes changes due to sales, inheritance, or other legal actions.

Tenancy and Cultivation Details: The teams document whether the land is owner-cultivated or under tenancy. They also record the type of crops being grown, their condition, and other relevant agricultural activities.

Recording Disputes: If there are any disputes or conflicts related to land ownership, boundaries, or cultivation, those issues are noted during the girdawari process.

Verification: After the field survey is completed, the collected data is cross-verified and compiled. Any discrepancies or inconsistencies are addressed and rectified.

Updating Records: The data collected during the girdawari is used to update land ownership and cultivation records. These updated records play a crucial role in maintaining accurate land ownership information and resolving any future disputes.

Legal Documentation: The verified girdawari records serve as legally recognized documents that can be used for various purposes, including property transactions, loan applications, and inheritance matters.

In the context of Shamilat (community land), girdawari is used to document the rights and usage of common or shared lands among the members of a community. This can include grazing lands, water bodies, and other communal resources. Girdawari of Shamilat involves recording how these lands are being used, who has access to them, and any changes in ownership or usage patterns.

Overall, the girdawari process is crucial for maintaining accurate and up-to-date land records, which in turn contributes to effective land management, property rights, and agricultural planning in rural areas.

Question: Dear Sir/Madam, how can my siblings and I claim a share from my grandmother’s estate, which was gifted to one of my father’s brothers who recently passed away? My father’s brother passed away last year in 2022. He was unmarried and had no legal heirs.The the other co-sharers, including my father’s brother and sister who are still alive, assert that we are not eligible to receive a share from our deceased uncle’s portion. They claim that since we are the children of a deceased legal heir (our deceased father’s brother), we can only be the legal heirs of our father’s share. Therefore, they argue that we cannot claim a share from their deceased brother’s portion, as he passed away last year.What is the law applying to this situation ?

Your fathers brother and sister are correct. The stance taken by the living co-sharers, that you and your siblings cannot claim a share from the deceased brother’s share, seems to be based on their assertion that you are only entitled to your father’s share of the estate and not that of their deceased brother. This perspective centers on the idea that you inherit through your direct lineage, meaning your father’s share, and not through lateral inheritance, which would involve claiming a share from your deceased father’s brother’s share.

In case 2018 PLD 129 Karachi High Court Sindh which involved the distribution of shares among legal heirs after the demise of the deceased. The applicants sought approval from the High Court to distribute the shares, excluding three applicants who were children of the pre-deceased brother and sister of the deceased.

The Court held that the provision of Section 4 of the Muslim Family Laws Ordinance, 1961, specifically applied to predeceased sons and daughters of a deceased. This provision could not be stretched or extended in any manner. In matters of inheritance among Muslims, the law had well-defined provisions, leaving no room for ambiguity or analogies.The children of the predeceased brother and sister were considered distant kindred and could inherit a share only when there were no sharers and residuaries. However, in this case, the deceased had surviving brothers and sisters who were considered sharers and residuaries. Therefore, the children of the predeceased brother and sister were not entitled to any share in the inheritance.The High Court was directed to distribute shares among the remaining legal heirs and approved the report submitted by the office. Consequently, the application was allowed accordingly.

Therefore, unfortunately, your uncle and aunties are right, you cannot inherit from your deceased uncle as children of his brother who is also deceased

Case Note: Anonymous Querent – Co-Sharer Dispute and Property Sale

Query: The anonymous querent is a co-sharer of a shop, and another co-sharer has sold their share to a buyer. The buyer is delaying payment for the anonymous querent’s share and using the entire shop. The querent seeks advice on how to make the buyer pay their share immediately.

Advice Given: The anonymous querent sought advice regarding a co-sharer dispute involving the sale of a shop. They mentioned that the other co-sharer had sold their share to a buyer and had been paid. The buyer was now using the shop and delaying payment to the querent. The following points were addressed:

1. The sale of the shop is not complete until an agreement is signed and payment is made.
2. The anonymous querent was advised to ensure that an agreement was signed before the sale could be considered complete.
3. It was suggested that the anonymous querent inquire about the arrangement the other co-sharer had with the buyer.
4. If the buyer is using the entire shop without authorization, the anonymous querent could place them on notice to stop using their share and demand payment or file for partition.
5. Filing for partition would clarify the ownership of shares and potentially lead to a stay order on the buyer’s use of the property until the matter is resolved in court.
6. If the buyer cannot pay, the anonymous querent could demand rent for the use of their share or sell their share to a third party.
7. The anonymous querent was advised to gather evidence and communicate with the buyer about their intentions.
8. It was noted that police intervention might not yield immediate results, and pursuing a legal remedy such as partition was recommended.
9. The anonymous querent mentioned that their father had passed away, and they were in the process of claiming their inheritance. They were advised to update the land record with their name through NADRA’s succession certificate process.
10. The anonymous querent was guided on how to apply for a succession certificate from NADRA’s website.
11. In case of disputes among siblings, the anonymous querent was informed that NADRA succession required cooperation from all legal heirs.
12. If disputes persisted, the anonymous querent was advised to pursue legal action in court to assert their rights.

Analysis and Opinion: The advice provided to the anonymous querent was aimed at clarifying their legal options and potential remedies for their situation. The co-sharer dispute involving the sale of a property requires careful consideration of property laws, inheritance rights, and legal procedures for partition and succession. The querent’s delay in addressing these matters underscores the importance of prompt action to protect their rights. The advice regarding NADRA succession was particularly relevant, as it highlighted the need for cooperation among legal heirs, especially in cases of family disputes.

What are the Letters Patent in the context of the  Lahore high court?

Letters Patent are a type of legal instrument or formal document that grants certain rights, powers, or privileges to an individual, institution, or organization. In the context of the Lahore High Court, the Letters Patent refer to the formal document that establishes the High Court and defines its jurisdiction, powers, and procedures.

The Letters Patent of the Lahore High Court outline its structure, authority, and functions. They are issued by the sovereign authority (in this case, the British Crown during colonial times) and serve as a constitutional charter for the establishment and operation of the High Court.

Key features of the Letters Patent of the Lahore High Court may include:

Jurisdiction: The Letters Patent define the territorial jurisdiction of the Lahore High Court, specifying the areas and regions over which it has authority.

Composition: The document may outline the composition of the High Court, including the number of judges, their qualifications, appointments, and tenure.

Powers and Functions: The Letters Patent confer judicial powers and functions upon the Lahore High Court, including its authority to hear and decide certain types of cases, issue orders, and administer justice.

Procedures: The document may establish rules and procedures for the conduct of court proceedings, appeals, and other legal matters.

Appellate Jurisdiction: The Letters Patent may specify the types of cases that can be appealed to the Lahore High Court from lower courts and tribunals.

Administrative Matters: The document may address administrative matters related to the High Court, such as the appointment of registrars, clerks, and other court staff.

Amendments: The Letters Patent can also outline procedures for amending or modifying its provisions.

It’s important to note that the Letters Patent of the Lahore High Court were originally granted during the colonial era and may have been subject to changes over time, particularly after the creation of Pakistan in 1947. They serve as a historical legal document that establishes the foundation of the Lahore High Court’s authority and jurisdiction.

If a police officer asks you to visit the police station, what should you do?

Under the provisions of Section 160 and 175 of the Code of Criminal Procedure, 1898, Sections 25.2, 25.2(1), 25.2(2), and 25.2(3) of the Police Rules, 1934, Article 156 (c) of the Police Order, 2002, and High Court VOL 3, the police have the authority to summon you to the police station and ask necessary questions.

Police generally request your presence when there is a complaint or an allegation against you, or you are a witness or a complainant in a case. When the police ask you to come to the police station, inquire about the reason for the summons, and if you have a pending case, seek interim bail from the court before going to the police station.

After obtaining interim bail, go to the police station. If you do not have interim bail, the police can arrest you, close the investigation, and proceed according to the law.

Subject: Tax Implications for Overseas Pakistani on Sale of Property u/s 236(2A)

The querent seeks legal advice regarding the tax implications arising from the sale of a property in Pakistan. The property in question is located in DHA Karachi Phase 8. The individual sold the property, which was the sole capital asset in their name, and their query pertains to the applicability of tax requirements under the new provision, specifically u/s 236C(2A), introduced by the Government.

The individual highlights their non-resident status but asserts that they are a filer for tax purposes. They express uncertainty regarding their obligation to pay tax under section 7E and the advance tax requirement under section 236C of the Income Tax Ordinance 2001.

The legal consultation, facilitated by Josh and Mak International, involves a thorough discussion of the individual’s concerns. Clarifications are sought about the date of sale, the individual’s status as a filer, and the pending property transfer. The individual raises queries regarding the calculation of tax, the fair value of the property, and the implications of deemed income under section 7E.

Josh and Mak International provide informed legal insights, indicating that the individual’s non-resident status and filing of a nil return exempt them from the provisions of section 7E. It is confirmed that the individual is subject to advance tax payment under section 236C, and the tax collection rate is discussed – 3% for filers listed in the Active Taxpayers’ List and 6% for non-filers.The legal consultation concludes by offering the individual comprehensive guidance on navigating the tax obligations related to the property sale, with an emphasis on the necessity of compliance with tax regulations and processes. 

Legal Update from Josh and Mak International (August 2023)

Regard: Mode and Manner for Payment of Tax u/s 7E of the Income Tax Ordinance, 2001 on Sale or Transfer of Immovable Property

Dear Members of the Public

We hope this email finds you well. We are writing to bring to your attention the recent circular issued by the Federal Board of Revenue (FBR) regarding the mode and manner for payment of tax under section 7E of the Income Tax Ordinance, 2001, specifically pertaining to the sale or transfer of immovable property in Pakistan.

Circular No. 01 of 2023-24 (Income Tax) was issued on 21st July 2023, outlining the following instructions:

A) Seller/Transferor on Active Taxpayers’ List (ATL):

• The seller/transferor must provide evidence to the transferring authority that they have discharged their tax liability under section 7E of the Ordinance.
• If the tax under section 7E has not been paid along with the income tax return for Tax Year 2022, the seller/transferor must pay the due amount through the FBR online payment system using the separate payment challan (CPR) provided. The payment made through CPR will serve as evidence for compliance with the newly inserted sub-section (2A) of section 236C of the Ordinance.
• If the seller/transferor has already declared the property in their return for Tax Year 2022 or is not required to pay tax due to any court-issued stay, they must furnish a certificate (Form ‘A’ annexed to the circular) duly issued by the Commissioner Inland Revenue holding jurisdiction over the seller/transferor. This certificate will be considered as evidence of compliance with sub-section (2A) of section 236C of the Ordinance.
• The Commissioner Inland Revenue will issue the certificate within 7 days of receiving the pre-filled Form ‘A’ from the seller/transferor.
• If the property has multiple owners, each owner must discharge their respective share of the tax liability under section 7E through the aforementioned modes.

B) Seller/Transferor Not on Active Taxpayers’ List (Non-ATL Person):

• Non-ATL sellers/transferors must pay the due amount of tax under section 7E using the separate payment challan (CPR) available in the FBR online payment system. The payment made through CPR will be considered as evidence of compliance with the newly inserted sub-section (2A) of section 236C of the Ordinance.

These instructions have been issued to ensure compliance with the latest amendments and to streamline the payment process for tax on the sale or transfer of immovable property.

What is a civil miscellaneous application for jurisdiction in Pakistan?

A Civil Miscellaneous Application (CMA) for jurisdiction is a legal document filed in a civil court to address matters related to the jurisdiction of the court in a specific case. Jurisdiction refers to the authority of a court to hear and decide a particular case based on factors such as the location of the parties, the subject matter of the case, and applicable laws.

A CMA for jurisdiction is typically filed when one of the parties involved in a civil case disputes the court’s authority to hear the case. The application may seek to challenge the court’s jurisdiction on various grounds, such as:

Territorial Jurisdiction: This relates to whether the court has geographical authority over the area where the dispute has arisen.

Subject Matter Jurisdiction: This pertains to whether the court has the legal authority to hear cases of the specific type or category involved in the dispute.

Personal Jurisdiction: This involves whether the court has authority over the parties involved in the case based on their residence, presence, or other connections to the court’s jurisdiction.

Hierarchy of Courts: The application may involve questions about whether the case should be heard by a different court based on the hierarchy of courts within the judicial system.

Choice of Forum: Parties may dispute whether the case should be heard in the current court or another court that they consider more appropriate.

Legal Requirements: The application may challenge the validity of the court’s jurisdiction based on specific legal requirements or procedural rules.

A CMA for jurisdiction typically includes legal arguments, case law references, and supporting evidence to substantiate the party’s claim that the court lacks the jurisdiction to hear the case. The court will review the application and may hold hearings to determine whether the jurisdictional challenge is valid. If the court agrees that it lacks jurisdiction, the case may be transferred to a different court with proper jurisdiction.

If I am correct, there cannot be a civil miscellaneous application for jurisdiction in the family court right?

Yes, that is correct, in family court matters, a Civil Miscellaneous Application (CMA) specifically for jurisdiction is not typically filed. Family courts are established to handle cases related to family matters, such as divorce, child custody, maintenance, guardianship, and other issues involving family relationships. These courts have specialized jurisdiction over such cases, and the jurisdictional aspects are usually determined by the nature of the case and the parties involved.

While a CMA for jurisdiction may not be relevant in family court cases, parties may still raise jurisdictional issues in family court proceedings, especially regarding the territorial jurisdiction of the court. These issues might include questions about the appropriate family court to handle the case based on factors like the parties’ residence, the location of the family assets, or where the family-related events occurred. However, these jurisdictional challenges are typically addressed within the context of the ongoing family court proceedings rather than through a separate CMA.

If you have questions or concerns about jurisdiction in a family court matter, please contact us at aemen@joshandmak.com on how jurisdiction for family law matters is determined in family court cases and how to address any jurisdictional challenges that may arise during the course of the proceedings.

An agent is asking me for money so he can buy me a work Visa for Canada, how do I know this is the real thing?

While we do not specialize in immigration matters, I would like to provide you with insights into the process of obtaining a work visa in Canada. This information will may help you understand the procedure better when considering approaching consultants or agents for job opportunities to avoid Emigration Fraud:

It’s important to note that companies in Canada cannot directly hire you for a job. Instead, they are required to follow a specific process. Here’s a breakdown of the process:

• Job Advertisement: The company must advertise the job opening on the Canada Jobs Bank for a minimum of one month. This step is crucial to show that the employer has made efforts to hire a Canadian citizen or permanent resident.
• LMIA Application: Following the job advertisement, the company applies for a Labor Market Impact Assessment (LMIA) from the Employment and Social Development Canada (ESDC). This application is made in your name as the potential employee. The employer needs to demonstrate that they considered and interviewed local applicants during the one-month period.
• Issuance of LMIA: Upon approval, the ESDC issues an LMIA in your name, containing relevant details. The LMIA confirms that the employer has met the necessary requirements and can proceed to hire a foreign worker.
• Work Permit Application: With the LMIA in hand, the employer then applies for a work permit on your behalf through Immigration, Refugees and Citizenship Canada (IRCC). The work permit allows you to legally work in Canada.
• Visa Application: It’s important to note that the work permit is not a visa. To enter Canada for work purposes, you must apply for a work visa. This application is also processed by the IRCC.

The entire process typically takes around three months to complete. This includes the one-month job advertisement, approximately two weeks for LMIA processing, an additional two weeks for the work permit application, and at least one month for the visa application.

Therefore, it’s essential to be cautious of any individuals or entities promising a “work visa” within an unrealistically short timeframe. The intricate procedure involves several steps that require due diligence, and any claims of expedited processing should be scrutinized carefully.

What is the difference between CrPC and PPC in Pakistan?

The Pakistan Penal Code, 1860 (PPC) and the Code of Criminal Procedure, 1898 (CrPC) are two distinct legal instruments in Pakistan’s legal framework, each serving different purposes within the criminal justice system. Here’s an overview of the differences between these two codes:

Pakistan Penal Code, 1860 (PPC):

The Pakistan Penal Code is a substantive criminal law that defines various criminal offences, prescribes their punishments, and provides general principles regarding criminal liability. It outlines what actions are considered criminal, specifies the elements of each offence, and establishes the penalties for those found guilty. The PPC covers a wide range of offences, from minor misdemeanors to serious felonies, and it is the primary source for determining what constitutes a criminal offence and how it should be punished.

Key features of the Pakistan Penal Code include:

• Classification of Offences: The PPC classifies offences into various categories, such as offences against property, offences against the human body, offences against public peace, and offences against the state.
• Elements of Offences: The PPC outlines the essential elements that must be proven for a person to be convicted of a particular offence. These elements typically include specific acts, mental states, and any additional circumstances required for the offence.
• Prescription of Penalties: The PPC specifies the punishments for different offences, including fines, imprisonment, and in some cases, the death penalty. The severity of the punishment often corresponds to the seriousness of the offence.
• Defences and Exceptions: The PPC may provide defences and exceptions that allow individuals to avoid criminal liability or have their punishments reduced based on specific circumstances.

Code of Criminal Procedure, 1898 (CrPC):

The Code of Criminal Procedure is a procedural law that governs the procedures to be followed during the investigation, trial, and appeal of criminal cases. It sets out the legal process that authorities, courts, and law enforcement agencies must follow when dealing with criminal matters. The CrPC ensures that criminal trials are conducted fairly and in accordance with due process, protecting the rights of both the accused and the victim.

Key features of the Code of Criminal Procedure include:

• Investigation: The CrPC outlines the procedures for investigating criminal cases, including the powers of law enforcement agencies, search and seizure, arrest, and the gathering of evidence.
• Trial: The CrPC sets out the procedures for conducting criminal trials, including the issuance of summons, arrest warrants, and the presentation of evidence. It defines the roles and functions of judges, lawyers, and witnesses during the trial process.
• Bail and Detention: The CrPC addresses matters related to the release on bail of accused persons, as well as the circumstances under which individuals can be detained during the investigation or trial.
• Appeals: The CrPC establishes the procedures for filing appeals against criminal convictions and sentences. It outlines the appellate process and the rights of appellants.
• Cognizance of Offences: The CrPC provides guidelines for how courts and authorities can take cognizance of offences and initiate legal proceedings.

In summary, the Pakistan Penal Code defines criminal offences and their corresponding penalties, while the Code of Criminal Procedure governs the procedures to be followed during the investigation, trial, and appeal of criminal cases. Both codes work in conjunction to ensure that the criminal justice system operates fairly, effectively, and in accordance with the rule of law.

Regarding the significance and scope of the Code of Criminal Procedure, 1898 (CrPC) in the legal context of Pakistan please note as follows :

• Nomenclature and Applicability: Among legal professionals, both among judges and lawyers the Code of Criminal Procedure is commonly referred to as “Cr. P. C.” This code serves as the general law of the land in Pakistan regarding criminal procedure. It outlines the procedures to be followed during the investigation, trial, and appeal of criminal cases.
• General Applicability and Exceptions: The CrPC applies to all criminal cases unless a special law prescribes a different procedure for a particular category of cases. In cases where a special law provides an alternative procedure, that specific procedure takes precedence. In other words, the CrPC is the default code, but if a specific law says otherwise, that special law’s procedure will apply.
• Exhaustive Coverage and Specific Matters: The CrPC is exhaustive only in relation to the matters that it specifically addresses. It provides comprehensive guidelines for the procedures it deals with. For matters not explicitly covered by the CrPC, the principle is that any procedure not prohibited should be considered permissible.
• Extent and Limitations of CrPC: Section 1(2) of the CrPC defines the extent of the Act. It applies to the entirety of Pakistan. However, it clarifies that its application does not override any existing special or local laws, special jurisdiction, or specific procedures prescribed by other laws in force at the time.
• Reference to Definitions in Pakistan Penal Code (PPC): The passage explains that the CrPC often refers to definitions of words and expressions used within it that are defined in the Pakistan Penal Code, 1860 (PPC). If a term isn’t explicitly defined in the CrPC but is defined in the PPC, the meaning of the PPC is attributed to it. This cross-reference ensures consistency in interpretation.
• Significance of Definitions: Regarding the question of why the definitions from the Pakistan Penal Code are used in the CrPC can be answered by stating that Section 4 of the CrPC itself establishes that words and expressions not defined in the CrPC but defined in the PPC are to be interpreted based on the meanings assigned to them in the PPC.

In summary, when looking at the role of Code of Criminal Procedure in governing criminal procedure in Pakistan it is best to look at how  CrPC applies in conjunction with other laws, when to apply specific procedures from special laws, and the significance of definitions from the Pakistan Penal Code in interpreting the CrPC. This understanding is crucial to ensuring legal consistency and procedural fairness in the Pakistani criminal justice system.

What is Emigration Fraud in Pakistan?

Emigration fraud in Pakistan refers to deceptive practices or fraudulent schemes involving the illegal facilitation of individuals leaving the country for immigration or work purposes. These fraudulent activities exploit the aspirations of people seeking better opportunities abroad and often involve false promises, misrepresentation, and financial exploitation. Emigration fraud can take various forms and can target individuals who are eager to migrate for better economic prospects, study, work, or family reunification.

Common forms of emigration fraud in Pakistan include:

• Fake Job Offers: Fraudulent agents or agencies may offer individuals attractive job opportunities abroad, promising high salaries and benefits. In reality, these job offers may not exist, or they may be significantly different from what was promised.
• Document Forgery: Fraudsters may create fake documents, including visas, work permits, educational certificates, and other documents required for immigration. These forged documents are presented as genuine to deceive authorities.
• Misrepresentation: Unscrupulous agents may provide false information about immigration procedures, eligibility criteria, or the required documentation. This misrepresentation can lead individuals to make decisions based on inaccurate information.
• Excessive Fees: Fraudulent agents may charge exorbitant fees for their services, including processing fees, visa fees, and other related costs. These fees may be far higher than the actual expenses involved.
• Human Trafficking and Smuggling: In extreme cases, emigration fraud can escalate to human trafficking and smuggling, where individuals are illegally transported across borders under dangerous conditions.
• Phony Educational Opportunities: Fraudsters may offer fake opportunities for study abroad, exploiting individuals’ desires to gain an education in another country.
• Bogus Investment Schemes: Individuals may be lured into investing money in fraudulent schemes that promise quick immigration or residency benefits.

To combat emigration fraud and protect the rights and interests of individuals, Pakistan has established regulatory authorities, such as the Overseas Pakistanis Foundation (OPF), to oversee emigration-related matters. Additionally, the Federal Investigation Agency (FIA) plays a role in investigating and taking legal action against those involved in fraudulent activities related to emigration.

Individuals seeking to migrate or work abroad are advised to exercise caution and conduct thorough research before engaging with any agents or agencies. It’s important to verify the authenticity of offers, check the credentials of agents, and seek advice from credible sources, such as legal experts or government bodies responsible for emigration matters.

Question: I need to know about the constraints I may encounter while incorporating GPL-licensed works into commercial projects. 

Answer Incorporating GPL-licensed works into commercial projects requires careful consideration of the terms and conditions set forth by the GNU General Public License (GPL). The GPL is a widely used open-source license that ensures the freedom of software users by granting them specific rights, such as the right to access, modify, and distribute the source code of the software. When incorporating GPL-licensed works into commercial projects, there are several key constraints to be aware of:

• Copyleft Provision: The GPL is known for its copyleft provision, which requires any derivative work or software that incorporates a GPL-licensed component to also be licensed under the GPL. This means that if you use a GPL-licensed library or software in your commercial project, you must make the source code of your entire project available under the GPL as well. This can potentially conflict with the desire to keep certain parts of your commercial project proprietary.
• Source Code Distribution: As per the GPL’s requirements, you must provide the complete corresponding source code of the GPL-licensed components you are using to anyone who receives your software. This includes not only the original GPL-licensed code but also any modifications you’ve made to it. This aspect of the license promotes transparency and allows others to benefit from the modifications you’ve made.
• Compatibility: When incorporating GPL-licensed works into your commercial project, it’s crucial to ensure that your project’s overall licensing aligns with the GPL’s terms. This can be challenging if your goal is to maintain a proprietary licensing model for your commercial software. Careful consideration should be given to how the GPL’s requirements will impact your project’s licensing structure and distribution.
• Licensing Obligations: The GPL does not restrict you from using GPL-licensed components in a commercial context, but it does place specific obligations on you to respect the rights of the original authors and users. These obligations include providing clear attribution to the original authors, ensuring that users have access to the source code, and complying with the terms of the GPL in any distribution of the software.

In summary, while it is possible to incorporate GPL-licensed works into commercial projects, doing so requires careful attention to the GPL’s terms and obligations. It’s important to consider how the copyleft provision, source code distribution requirements, compatibility with your project’s licensing model, and other legal obligations will impact your commercial project’s overall strategy and objectives.We advise our clients to get proper legal advice when  l when dealing with the incorporation of GPL-licensed works into commercial projects as the GPL’s legal implications can be complex, and nuanced in terms of open-source licensing and intellectual property issues.If you are seeking legal advice in this regard please email us at aemen@joshandmak.com

Follow up question: How would GPL’s copyleft provisions, source code distribution requirements, and the compatibility with the project’s licensing model become relevant for a gaming developer?

For a gaming developer, the implications of the GPL’s copyleft provisions, source code distribution requirements, and compatibility with the project’s licensing model can be significant and should be carefully considered. Let’s delve into how each of these aspects could impact a gaming developer:

1. Copyleft Provisions:

The copyleft provisions of the GPL can pose challenges for a gaming developer who wants to incorporate GPL-licensed components into a commercial game. If the developer integrates a GPL-licensed library or software into their game, the entire game may need to be licensed under the GPL as well. This would mean that the source code of the entire game, including proprietary elements, would need to be made available to users upon request. This could conflict with the developer’s intention to keep certain parts of the game’s code proprietary, as it might require disclosing proprietary assets, game mechanics, and other sensitive information.

2. Source Code Distribution Requirements:

The GPL requires that the complete corresponding source code of any GPL-licensed components be made available to users who receive the software. For a gaming developer, this means not only providing the source code of the GPL-licensed components but also any modifications made to them. This can be challenging for game developers who use a mix of open-source and proprietary components, as they would need to ensure that the source code of the entire project is accessible to users. This might lead to concerns about protecting valuable game assets and trade secrets.

3. Compatibility with Licensing Model:

Many gaming developers adopt a commercial licensing model to generate revenue from their games. If a developer aims to sell their game under a proprietary license, the copyleft nature of the GPL could be at odds with this strategy. Incorporating GPL-licensed components could require the entire game to be distributed under the GPL, potentially limiting the developer’s ability to monetize their proprietary game content. Striking a balance between open-source and proprietary elements while complying with the GPL’s terms can be complex.

In light of these considerations, gaming developers have a few options:

• Choosing Permissive Licenses: Instead of GPL-licensed components, developers can opt for open-source components with permissive licenses like the MIT or Apache License. These licenses impose fewer restrictions on how the code can be used and integrated into proprietary projects.
• Separation of Components: Developers might choose to keep GPL-licensed components separate from the core game code. This way, only the components that are directly linked to the GPL-licensed code would fall under the GPL, while the main game code remains proprietary. However, careful technical and legal separation is required to achieve this.
• Dual Licensing: Some developers use a dual licensing strategy, offering their game under both a proprietary license and an open-source license (like the GPL). Users can choose which license they want to adhere to when using the software. This approach can allow for greater flexibility in how the software is distributed and used.
• To address the intricacies of open-source licensing, we recommend consulting our team of legal professionals to ensure compliance with the GPL’s requirements while aligning with your commercial goals. Customized licensing agreements and proper documentation can help manage many of your legal obligations and user expectations.

In conclusion, as a gaming developer, you would need to carefully weigh the benefits of incorporating GPL-licensed works against the challenges posed by copyleft provisions, source code distribution, and compatibility with their licensing model. Our team can assist you with legal guidance and strategic planning which are essential to address these complexities effectively while achieving your goals as developer goals for both open-source collaboration and commercial success. We can be reached at aemen@joshandmak.com 

July 29 (2023) Condemnation Statement from Josh and Mak International Law Firm

Subject: Condemnation of Barbaric Acts and Call for Swift Legal Action

We, at Josh and Mak International Law Firm, express our utmost condemnation and revulsion regarding the horrifying incident of cruelty and abuse inflicted upon a 13-year-old girl who was working as a maid at the residence of a civil judge. This abhorrent act has caused physical and psychological harm to an innocent child, and it is essential that justice be served swiftly and comprehensively.

The recent addition of section 328-A (cruelty to a child) to the First Information Report (FIR) is an appropriate step towards recognizing the heinous nature of the crime committed. This section of the Pakistan Penal Code (PPC) appropriately prescribes punishment for those who deliberately assault, ill-treat, neglect, abandon, or cause harm to a child, either physically or psychologically. The inclusion of this provision reflects the seriousness with which such crimes should be treated in our legal system.

However, we believe that the scope of legal actions taken must extend further to address the full extent of the girl’s suffering and to ensure that the perpetrators face appropriate consequences for their actions. Therefore, we urge the authorities to consider the following legal actions and provisions in pursuit of justice:

1. Sections Related to Attempted Murder, Fracturing Bone, Deep Wounds, Breaking Teeth, and Hiring Underage as Maid: The evidence points to attempts of strangulation and severe injuries sustained by the victim. As such, sections pertaining to attempted murder, causing fractures, deep wounds, breaking teeth, and hiring an underage child as a maid should be added to the case. These actions demonstrate the severity of the violence committed against the innocent girl and warrant justifiable legal consequences.
2. Sections 337-A and 337-F: Considering the injuries found in the upper and lower parts of the victim’s body, sections 337-A and 337-F, which deal with hurt caused to a person, should be incorporated in the FIR. These sections will further emphasize the gravity of the inflicted injuries and the need for accountability.
3. Sections 337 (3) (iii) or 337-E (v) and 337-U: The victim’s suffering includes fractured bones and broken teeth, demanding that sections 337 (3) (iii) or 337-E (v) and 337-U, which deal with more severe forms of hurt, be applied accordingly.
4. Labour Act Violations: The judge and his wife should face charges under the Labour Act for employing an underage child as a maid. This will send a clear message that exploiting vulnerable children for labor will not be tolerated under any circumstances.

We implore the authorities to act swiftly and diligently in pursuing this case, ensuring that all responsible individuals, regardless of their status or position, are held accountable for their reprehensible actions. The victim deserves justice, and society demands that such brutal acts be met with the full force of the law.

Furthermore, we urge the police to expedite the verification of the Medico-Legal Certificate (MLC) and acknowledge the evidence presented to them by the Sargodha police through proper legal channels.

At Josh and Mak International Law Firm, we stand firmly against all forms of cruelty, abuse, and exploitation, especially when directed towards innocent children. We pledge our support to the victim and her family during this harrowing time and call upon the legal system to deliver justice promptly.

We encourage anyone with information related to this case or any other instances of child labor and abuse to come forward and inform the police. Together, we must protect our children from harm and build a society where such atrocities have no place.

Sincerely,

Barrister Aemen Zulfikar Maluka 

Legal Alert (2023): Increasing Fraud with Forged Pay Orders in Vehicle and Property Deals

Attention to all buyers and sellers involved in vehicle transactions! Fraudsters are resorting to using counterfeit pay orders, once considered a secure mode of payment, to deceive unsuspecting victims, especially in car deals. The recent surge in cases of fraudulent pay orders has raised concerns among citizens and authorities alike.

Incidents of Fraud: Several individuals have fallen victim to this scam, where fraudsters present seemingly authentic pay orders to complete vehicle purchases. The sellers, trusting the legitimacy of the pay orders, hand over their valuable vehicles along with relevant documents. Only later do they discover that the pay orders were forged, leaving them devastated and at a loss.

Modus Operandi: The fraudsters initiate contact through car sale advertisements in newspapers. Upon meeting the sellers, they swiftly strike a deal and present the forged pay orders, appearing convincingly real to the unsuspecting victims. Once the transaction is completed, the fraudsters disappear, leaving the sellers to realize they have been scammed.

Inadequate Response from Banks: Unfortunately, victims have reported difficulties in seeking support from the banks whose names appear on the forged pay orders. Some victims claim that the banks have been unresponsive and unwilling to assist with complaints or investigations.

Action Taken: Despite previous efforts to bust fraudster gangs, they seem to resurface and continue their scams. Section 420 (Cheating and dishonestly inducing delivery of property) of the Pakistan Penal Code under which they are convicted is a bailable offence, allowing criminals to be back in action quickly after arrests.

State Bank of Pakistan’s Role: The State Bank of Pakistan (SBP) is aware of the fraudulent pay order scam as commercial banks routinely report such incidents to the regulator. However, victims feel that the SBP has not been effective in taking sufficient measures to protect customers from such scams.

Precautionary Measures: To safeguard yourself from falling victim to this scam, consider the following precautions:

1. Conduct thorough due diligence on the buyer/seller before entering any transaction.
2. Verify the authenticity of the pay order with the issuing bank before handing over the vehicle.
3. Cross-check the details mentioned on the pay order, including the bank branch, for any discrepancies.
4. Report any suspicious activity or individuals to the police and the CPLC immediately.
5. Consider conducting transactions at reputable and secure locations.

The SBP’s circular of 2005 requires all banks to report incidents of fraud promptly. Victims are urged to report such cases to the respective banks and the SBP for necessary action.

Stay vigilant and exercise caution during vehicle deals to avoid falling prey to these fraudulent schemes. Report any suspected scams to the authorities promptly to ensure that appropriate action is taken against the perpetrators.

Legal Note on Payorders for Property Payments in Islamabad (July 2023)

A pay order is a common instrument used to confirm the genuineness of funds for property transactions. In the context of property payments in Islamabad, it is essential to understand the significance of pay orders and the precautions to be taken to avoid potential scams or frauds.

1. Purpose of Pay Orders: A pay order is a payment instrument issued by a bank on behalf of the payer to confirm the availability of funds. In property transactions, the pay order serves as evidence that the buyer has the necessary funds to complete the purchase. The pay order is usually presented to the bank for verification before the actual property transfer takes place.

2. Precautions for Property Buyers: When dealing with property dealers or sellers, it is crucial for buyers to exercise caution to avoid falling victim to scams or fraudulent activities. Here are some precautions to take:

a. Verification of Pay Order: Before proceeding with the property transfer, buyers should visit the issuing bank with the property dealer or seller to verify the authenticity of the pay order. This step ensures that the pay order is genuine and backed by sufficient funds.

b. Securing Necessary Information: Buyers should collect essential information from the property dealer or seller, including their CNIC, bank account details, and other relevant identification. This information helps in establishing the legitimacy of the transaction.

c. Due Diligence: Conduct thorough research on the property dealer or seller and seek feedback from other customers they have dealt with in the past. Identifying any red flags or negative feedback is crucial to avoiding potential risks.

d. Meeting in Person: It is advisable for buyers to meet the property dealer or seller in person and show them a copy of the pay order. This personal interaction allows for better communication and ensures transparency in the transaction.

e. Property Inspection: Before finalizing the deal, buyers should visit the property in person to inspect its condition and ensure its suitability for purchase. Additionally, speaking to the neighbors can provide valuable insights about the property and the surrounding area.

3. Liability of Issuing Bank: Once a pay order is issued, the issuing bank becomes liable to pay the amount specified in the pay order upon its presentation, provided it is genuine. Buyers can rely on the pay order as a secure payment method for property transactions.

In conclusion, a pay order is a valuable tool to confirm the genuineness of funds in property transactions. However, buyers must exercise caution, conduct due diligence, and follow the necessary precautions to safeguard their interests and avoid potential risks associated with property dealings. Being well-informed and proactive can lead to a successful and secure property transaction in Islamabad.

Question from 2015: I am an Overseas Pakistani.Someone in Pakistan took a loan from me and used it to build a house. As per our agreement, he is obligated to repay the loan, but now he is denying the loan and refusing to pay. Can I file a suit for declaration on the basis of a benami transaction?

Answer: It appears that you do not have a case of benami transaction in this situation. A benami transaction typically involves property held in the name of one person but actually belonging to another, with the intention to conceal the true ownership. In your case, it seems that the loan was taken by the individual to build a house, and there is an agreement in place for him to repay the loan.

Instead of pursuing a case of benami transaction, it would be more appropriate for you to file a suit for the recovery of your money along with any accrued interests. You can present the agreement as evidence to support your claim for the repayment of the loan.

By filing a suit for recovery, you can seek legal recourse to recover the loan amount along with any interest that may have been agreed upon in the loan agreement. This would be a more direct and appropriate approach to address the issue of non-payment of the loan. Consulting with a lawyer will help you understand the legal options available and the best course of action to recover your money in a timely and effective manner.

Context : Status of Benami Transactions after 2017 

In Pakistan, a benami transaction refers to a property or asset transaction where the property is held in the name of one person (the “benamidar”) but is actually owned by another person (the “real owner”) who has provided the consideration for the property. The term “benami” is derived from the Urdu word “benam,” which means “without a name.”

The Benami Transactions (Prohibition) Act, 2017, defines a benami transaction as follows:

• Property Transaction: Any property (such as land, building, house, vehicle, or any other asset) that is purchased, held, or transferred by a person, but the consideration for such property has been provided by another person, is considered a benami transaction.
• Fictitious or Artificial Transaction: A transaction where the owner of the property is not the person in whose name the property is held, or the owner is not aware of the ownership of the property, is also considered a benami transaction.
• Purpose of Concealment: The primary purpose of a benami transaction is to conceal the ownership of the property or asset, and the real owner intends to avoid taxation, hide assets from creditors, or engage in illegal activities.

The Benami Transactions (Prohibition) Act, 2017, provides for the prohibition of benami transactions in Pakistan and imposes strict penalties on those involved in such transactions. The Act empowers the government authorities to confiscate and seize properties that are determined to be benami and take legal action against the benamidar and the real owner.

The Act also established the Federal Board of Revenue (FBR) as the designated authority to investigate and take action against benami transactions. The FBR, along with other law enforcement agencies, has the authority to conduct inquiries, seize properties, and prosecute those involved in benami transactions.

It is essential to note that legitimate transactions, where the ownership of the property is clear and the consideration has been paid by the rightful owner, are not considered benami transactions. The Act aims to curb corruption, tax evasion, and money laundering by discouraging individuals from holding assets in the names of others to avoid legal and tax obligations.

Further context

A. A benami transaction occurs when a property is transferred to or held by one person, but the consideration for the property is provided by another person, and the property is held for the benefit (direct or indirect) of the person providing the consideration. The individual purchasing the property in someone else’s name has no intention of vesting the property in the ostensible owner.

B. Benami transactions include transactions or arrangements involving:

(i) Properties carried out or made in fictitious names;

(ii) Properties where the actual owner is unaware of or denies ownership; and

(iii) Properties where the person providing the consideration is untraceable or fictitious.

C. To establish the benami status of a transaction, two essential elements must exist:

(i) There must be an agreement, express or implied, between the ostensible owner and the purchaser of the property in the name of the ostensible owner for the benefit of the person providing the consideration.

(ii) The transaction is entered into between the real purchaser and seller to which the ostensible owner was not a party.

D. Benami property encompasses all kinds of assets, whether movable or immovable, tangible or intangible, corporeal or incorporeal. It includes any right or interest, as well as legal documents or instruments evidencing title or interest in the property. If the property is convertible into another form, the property in the converted form is also considered benami, and it includes the proceeds from the property.

Inquiry Proceedings of Benami Transactions:

A. The Initiating Officer, Deputy Commissioner Inland Revenue, issues a show cause notice to a person based on material in his possession and having reasons to believe that the person is a benamidar in respect of a property.

B. If the Initiating Officer is not satisfied with the reply to the show cause notice, he may pass an order for the provisional attachment of the subject benami properties and file a reference before the Adjudicating Authority.

C. The Adjudicating Authority serves notices requiring submission of documents, particulars, or evidence from various parties, including the benamidar, beneficial owner, interested parties, and claimants in respect of the property.

Benami Transactions Offences & Punishments:

A. Any property proven to be acquired or held through a benami transaction will be subject to punishment under the Benami Transactions Prohibition Act, 2017.

B. Individuals found guilty of the offence of a benami transaction or holding benami property may face rigorous imprisonment for a term of one year or more, extending up to seven years, and may be liable to pay a fine of twenty-five percent of the fair market value of the subject benami property.

Exemptions under the Benami Transaction Act:

Certain individuals are exempted from the provisions of the Benami Transactions Prohibition Act, including those standing in a fiduciary capacity for the benefit of another person (e.g., trustees, executors, agents, etc.), individuals holding properties in the name of close family members (spouse, child, sibling, etc.), and individuals appearing as joint owners if the consideration for the property has been provided from known sources of their income.

The implementation of the Benami Transactions (Prohibition) Rules, 2019 by the Federal Board of Revenue (FBR) has brought clarity to the definition and scope of Benami properties. According to these rules, a Benami property refers to any property that is the subject matter of a Benami transaction, and it also includes any proceeds generated from such property.

A Benami transaction encompasses various scenarios, such as when a property is transferred to or held by a person, and the consideration for the property is provided by another person. However, certain individuals, such as trustees and close family members (wife, children, brother, or sister), to whom the property has been transferred from known resources, are excluded from this definition. Other instances include transactions or arrangements involving properties carried out in fictitious names, properties where the actual owner is unaware of or denies knowledge of ownership, and transactions where the person providing the consideration is untraceable or fictitious.

The potential types of Benami properties are diverse and include plots, houses, shopping plazas, shops, housing schemes, bank accounts, vehicles, business shares, jewelry, foreign currency, legal documents, and intangible properties with financial value.

The Benami Transactions (Prohibition) Rules, 2019 came into force immediately, and the BTB zones of the Inland Revenue Service have been tasked with establishing cases against Benami properties and submitting challans to the Adjudication Authority within 120 working days. During this period, the sale, purchase, and transfer of such properties will be prohibited until further orders. Any appeal against the decision of the Adjudication Authority can be lodged with the Federal Tribunal. After the Federal Tribunal’s decision, the properties in question will be confiscated and sold by the federal government.

Criminal proceedings will be initiated against the accused persons if the crime of Benami transactions is proven, and they could face rigorous imprisonment ranging from one year to seven years. Similarly, individuals providing false and baseless information may also be sentenced to rigorous imprisonment from six months to five years. However, informants who provide credible information leading to the detection of Benami property or transactions will be entitled to cash rewards. The reward percentage will depend on the value of the Benami property, with informers eligible for a reward of 5%, 4%, or 3% of the property’s value based on specific thresholds.

It is important to note that the reward will only be given if the information provided is of value, not already available to the FBR, not accessible through public records, and if the appeal against the confiscation of the property has attained finality. These measures aim to deter and combat Benami transactions, ensuring more transparent and accountable property dealings in Pakistan.

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Archived from 2017: A note on jurisdiction for overseas Pakistanis who concluded marriages under the law of Pakistan and are now looking at divorce

Regarding jurisdiction for overseas Pakistanis who concluded marriages under the law of Pakistan in respect of divorce proceedings, it is argued that the Pakistani courts have the jurisdiction to adjudicate on such matters. The basis of this argument lies in the applicability of the Muslim Family Law Ordinance, 1961 (MFLO) to all Muslim citizens of Pakistan, regardless of their current residence. According to Section 1(2) of the Muslim Family Law Ordinance, 1961, the law applies to all Muslim citizens of Pakistan, wherever they may be. This means that even if one of the spouses is residing in the United Kingdom (or any other country), they are still subject to the provisions of the MFLO. The argument further states that the parties have to resolve their divorce matters through the Family Courts established under the West Pakistan Family Courts Act, 1964, in accordance with the provisions of the MFLO and the Dissolution of Muslim Marriages Act, 1939. These laws govern marriages that were solemnized in Pakistan or abroad by Pakistani citizens according to Islamic tenets.The view is supported by various court cases, such as the cases cited, which have upheld the applicability of the MFLO to Pakistani citizens residing overseas unless they expressly relinquish their Pakistani citizenship (2005 CLC 481, 2002 CLC 1744, 1998 MLD 85, and 2009 YLR 2341).In essence, the argument suggests that Pakistani courts have jurisdiction over divorce proceedings involving overseas Pakistanis if their marriage was conducted under the law of Pakistan and they have not formally relinquished their Pakistani citizenship. Therefore, any divorce matters should be addressed in the Pakistani Family Courts in accordance with the relevant laws.The argument presented emphasizes that all marriages solemnized by Pakistani citizens under Muslim Law, whether in Pakistan or abroad, are required to be registered with the relevant Union Council as mandated by Section 5 of the Muslim Family Law Ordinance, 1961 (MFLO).According to Section 5 of the MFLO, every marriage solemnized under Muslim Law must be registered in accordance with the provisions of the Ordinance. This registration is considered mandatory for Pakistani citizens, and failure to comply with this requirement may have legal implications.Furthermore, it is asserted that Pakistani citizens are obliged to follow the specific provisions of the MFLO 1961 and the Family Court Act 1964 when seeking dissolution of their marriages, including divorce and khula. Under Muslim Personal Law, the right to pronounce divorce lies with the husband, and he can exercise this right without resorting to any court proceedings. On the other hand, khula is the right of the wife, and she can apply for it before a Muslim judge.Rule 6 of the West Pakistan Family Courts Rules, 1965, is also cited to highlight that the Family Court, established under Section 3 of the West Pakistan Family Courts Act 1964, has exclusive jurisdiction to hear suits for the dissolution of marriage.

In summary, the view stresses the importance of registering marriages under the MFLO and adhering to the specific provisions of the MFLO and Family Court Act when seeking Pakistani Jurisdiction over a future divorce or khula matter. Pakistani citizens are abroad urged to follow these legal requirements to ensure the validity and legality of their marital matters.The link below is our comprehensive page on Khula and Divorce for Overseas and Local Pakistanis 

Josh and Mak International: Expert Legal Services for Divorce and Khula in Pakistan for Local and Overseas Pakistanis

Questions from July 2023 

Legal response to combined queries:

Just to clarify, an overseas Pakistani purchasing property in Pakistan is required to pay an advance tax of 3%, regardless of their filer or non-filer status. However, we have observed that many individuals traveling to Pakistan from overseas, who do not have a Pakistani account, are being pressured to hastily close deals with property sellers and agents. It is a common concern among the queries we receive that they have been advised to transfer their funds from abroad into a property dealer’s bank account in Pakistan or a relative’s bank account.

Our summary of advice is as follows :

1. Tax Obligations: As per the current amendment to Income Tax Ordinance 2001 by the Finance Act 2023, all property purchases in Pakistan are subject to an advance tax of 3%, regardless of whether you are a filer or non-filer. This tax must be paid at the time of registration with the housing registrar or land registrar.
2. Overseas Transactions: If you are making the property purchase through your relatives’ or property dealer’s account due to the absence of your bank account in Pakistan, it is crucial to ensure proper documentation of this arrangement to avoid having problems when the payee denies that they have received money for the purpose of your payment.
3. Not having a bank account in Pakistan is not a problem anymore.You can easily apply online for a bank account via the Roshan Digital Account scheme.Please note that if you pay via a relatives account and not your own PKR or foreign currency account where you have transferred money from overseas, you cannot qualify under the status of an Overseas / Non-resident Pakistan buyer under section 236K of the Income Tax Ordinance 2001.In which case you or the payee will face payment as filers or non-filers who are Pakistani residents.For reference now the taxation rate for a non-filer for property purchase in Pakistani is 10% (ref: Finance Act 2023).
4. Without clear evidence of your relatives paying on your behalf, you and your relatives may face potential scrutiny from the Federal Board of Revenue (FBR), especially regarding the gap in documentation of the cash transaction.
5. Risks of Cash Transactions: It is strongly advised to avoid cash transactions as they are untraceable and undocumented. Cash transactions can lead to legal complications and potential investigations. Instead, consider utilizing proper banking channels for your transactions.
6. Opening a Bank Account: Although time is limited, we recommend opening a bank account in Pakistan to facilitate the payment and documentation process. The Roshan Digital Account, an initiative by the Pakistani government for overseas Pakistanis, offers convenient options for overseas banking.
7. Tax Liabilities: If your relatives or the property agents  are filers, they will assume tax liabilities associated with the property transaction. However, it is crucial to have clear documentation proving that they are making the payment on your behalf. Otherwise, the FBR may question the source of funds, especially in cash transactions.
8. Purchase Agreement: When signing the purchase agreement, electronically please take time to reflect on the housing terms and conditions on the rules of transfer and hidden charges you may be subject to.

These issues have been dealt with in some more detail on our Page about Buying Property In Pakistan the link to which is below.

Buying Property in Pakistan: A Legal Guide for Overseas Pakistanis and Foreigners

Connected legal notes in response to common queries on purchasing a property located in Pakistan from an overseas Pakistani as an overseas Pakistani while abroad.

To add context in this situation payment has also been made abroad.

1. Property Transfer Process: To transfer the house in your name, you will need to follow the registration process at the relevant land transfer office of your city. This involves executing a local power of attorney and providing documented proof of payment received for the property.
2. Role of Power of Attorney: Both you and your friend will need to appoint separate Power of Attorney to represent you in the transfer process. Your friend will arrange his own of Attorney in Pakistan, who will confirm the sale at the land transfer office on his behalf. Similarly, you will need a local Power of Attorney to represent you during the transfer process.
3. Specific Society Rules: It is important to note that some housing societies have their own rules and regulations for property transfers involving overseas buyers. Therefore, it is recommended to contact the relevant land registration office in advance to understand their specific requirements and processes.
4. Estimated Costs: The costs associated with the property transfer may vary depending on the specific zone and local regulations of the housing society. Apart from the mandatory advance tax of 3%, which you will need to pay, the society will provide you with a breakdown of the remaining costs.
5. Personal Presence: To ensure a smooth transfer process, it is advisable for both you and your friend to be present in Pakistan. Your documented proof of payment and the sales agreement you have concluded should be brought along for verification at the land registration office.

Yet another connected query by an overseas Pakistani having problems collecting rent from their commercial property in Pakistan and having one of the tenants/shopkeepers threatening them to ‘take over’ ownership of the property.The shopkeeper/tenant is also responsible for collecting rents from other tenants and is now refusing to pay the collected rent money in their account in Pakistan.

Response : During our initial conversation, you mentioned that your father owns a row of shops in (city redacted), Pakistan, which are being rented out. Unfortunately, as you have mentioned,  one of the shopkeepers  who has been collecting the rent and is now claiming ownership of the land and the shops. This situation is concerning, especially as you have mentioned that your father is ill in the hospital, and you and your mother hold a last power of attorney certified in the UK.

To assist you further, we would like to gather more information. Please clarify the following details:

1. The age of your father and his current location (you have stated UK).
2. The location where the power of attorney was made (you have mentioned UK).
3. Whether the power of attorney includes financial powers (You have stated Yes)
4. The evidence provided by the shopkeeper to support his claim of ownership and the threats he has made (You have indicated you will look into this as you are hearing this from your local relatives)
5. How you discovered the shopkeeper was stealing your father’s cash (you have stated you will also provide more information on this later)
6. Whether you have authorized the shopkeeper in writing to collect rent and the process followed after rent collection (You have stated that an agreement in Urdu was signed between you (as te POA of your father) while you were in Pakistan last year and the shopkeeper/tenant.
7. Whether the shopkeeper sends the rent money to your local account (You have indicated Yes)
8. The duration of time during which he has been collecting rent without remitting it to you (You have indicated you will confirm this from your relatives in Pakistan).
9. How you learned about the threats made by the shopkeeper (You have stated you heard all this from your relatives).
10. Whether you have sought advice from a local council in your city where the property is situated.

As you are still investigating this, we advise you to record all conversations with the shopkeeper, as well as any meetings held with him during your visit to Pakistan in October. This will help gather evidence for your case for eviction later on. Additionally, it may be necessary to have the existing agreement between your father and the shopkeeper translated into English, reviewed, and potentially redrafted to ensure its validity if there is a problem with the way it has been currently written in Urdu.Most ‘Iqrar Namas are written by novices in the Pakistani katcheries and do not add any value to protecting the rights of those signing such standard iqrar namas. Therefore is best to revise and re-sign the agreement with the shopkeeper if he decides to show better judgement than acting disagreeably in the future.

Our recommended course of action at this stage is as follows:

1. Place the shopkeeper on written notice regarding his actions and inform him that legal action will be taken if he does not cease his activities and pays the rent arrears immediately.
2. Initiate the process of eviction and recovery of the rent collected, if the shopkeeper does not rectify the situation and comply with your demands.

Note to all Overseas Pakistanis : You can reach out to us with any further questions or concerns during our night free advice clinic for overseas Pakistanis which operates from 11 pm to 6 am Pakistan Time. We are also available between 2 pm to 7 pm Pakistan Time. Additionally, someone is always available on our WhatsApp hotline to assist you.

Our 24/7 Text WhatsApp hotline is +92-3048734889.

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Question from 2017:

I am overseas Pakistani and I cannot locate my wife’s address or whereabouts to serve the Talaq /Divorce notice?

According to Section 7 of the Muslim Family Laws Ordinance 1961, the divorce procedure in Pakistan consists of the following steps:

1. Pronouncement of Talaq / Divorce: The husband can verbally or in writing pronounce Talaq to initiate the divorce process. If either spouse is overseas and the other is in Pakistan, a divorce deed can be drafted, attested by the Pakistani Embassy, and served to the spouse in Pakistan and the Union Council where the marriage took place.
2. Notice to Chairman Union Council: Within 30 days of pronouncing Talaq, it is mandatory to serve a notice to the Chairman of the Union Council. A copy of the notice must also be provided to the wife. The jurisdiction of the relevant Union Council will be determined based on the current address of the wife.
3. Constitution of Arbitration Council: Upon receipt of the notice, the Chairman of the Union Council will constitute an Arbitration Council whose purpose is to facilitate reconciliation between the parties. The Arbitration Council takes necessary steps to bring about reconciliation.
4. Hearings at Arbitration Council: Both parties are served notices to attend hearings at the Arbitration Council. The Council conducts hearings in an attempt to reconcile the parties and resolve any issues.
5. Publication of Final Notice: If one party fails to attend the Arbitration Council hearings for three consecutive times, a final notice may be published in a newspaper.
6. Further Hearings at Arbitration Council: Notices are served to both parties for additional hearings at the Arbitration Council to continue the reconciliation process.
7. Registration and Issuance of Divorce Certificate: Once the Arbitration Council has ruled on the divorce, the parties are required to register the divorce with the National Database and Registration Authority (NADRA) and obtain a computerized divorce certificate.

It is important to note that a divorce not following this prescribed procedure does not become effective. Both parties can nominate representatives for the Arbitration Council proceedings, but they must personally appear at least once during the process.

Context of Jurisdiction of Union Council where you cannot locate the wife or she lives in a different city from where the marriage took place.

Jurisdiction of the Union Council for applications of maintenance, Talaq (divorce) and second marriage  under the Rule 3 of the West Pakistan Rules under the Muslim Family Laws Ordinance, 1961

According to the West Pakistan Rules under the Muslim Family Laws Ordinance, 1961, the jurisdiction of the Union Council in matters of such applications is outlined as follows:

1. Application to Contract Another Marriage (Section 6 MFLO 1961): The Union Council with jurisdiction shall be the one where the existing wife of the applicant resides at the time of making the application. If the applicant has multiple wives, it will be the Union Council where the applicant was last married. In case the wife is not residing in any part of West Pakistan, the jurisdiction will be determined based on the wife’s previous residence with the applicant or the applicant’s current permanent residence in West Pakistan.
2. Notice of Talaq (Section 7 MFLO 1961): The Union Council with jurisdiction shall be the one where the wife, in relation to whom the Talaq has been pronounced, was residing at the time of the pronouncement. If the wife is not residing in any part of West Pakistan, the jurisdiction will be determined based on the wife’s previous residence with the person pronouncing the Talaq or the person’s current permanent residence in West Pakistan.
3. Application for Maintenance (Section 9 MFLO 1961): The Union Council with jurisdiction shall be the one where the wife is residing at the time of making the application for maintenance. In cases where multiple wives make applications, the jurisdiction will be determined based on the first wife’s residence at the time of her application.

As per Rule 3 of the West Pakistan Rules under the MFLO 1961 , additionally, if the husband is unable to ascertain the whereabouts of the wife or her location cannot be determined with due diligence, he may serve the notice of Talaq through her father, mother, adult brother, or adult sister. If their whereabouts are also unknown, the husband may seek permission from the Chairman to serve the notice through publication in a newspaper approved by the Chairman, circulating in the locality where he last resided with the wife.

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Question from 2018

Question : Can I rely on a decision about my land issued by the “Emarat-e-Islami Taliban, Waziristan wa Afghanistan” (‘Taliban’).I am in Bannu, KPK and I want use this document as proof of sale of a disputed property?

No, you cannot rely on a decision issued by the “Emarat-e-Islami Taliban, Waziristan wa Afghanistan” (‘Taliban’) regarding your land as proof of sale for a disputed property. This is because the Taliban does not have any legal authority to decide land cases, as established in reported cases. Their occupation of any part of Pakistani territory is in violation of the Constitution of the Islamic Republic of Pakistan. Consequently, any decision made by the Taliban would be deemed unconstitutional, unlawful, and hold no legal weight.

Furthermore, attempting to classify the purported “decision” as a sales agreement is not permissible as it undermines the sovereignty of Pakistan. Such an agreement would be considered “forbidden,” “unlawful,” and contrary to “public policy” according to Section 23 of the Contract Act, 1872. Therefore, it would have no legal effect and cannot be used as proof of sale for the disputed property.

Archived from 2012

Question : My husband is not paying me my dower and backdated child and spouse maintenance for the period he abandoned me and my daughter before I finally used my Section 18 MFLO 1961 right to divorce? His lawyer is saying if I get divorce under Section 18 it is the same as Khula so I cannot claim my dower and gifts under the marriage contract/Nikahnama? Is this true?

Answer: No this is misinformation the lawyer is spreading.A section 18 MFLO right to divorce is NOT the same as Khula and this is endorsed by Islamic Jurisprudence.It is important to clarify the distinction between the exercise of the delegated right of divorce, known as “Tafweez of Talaq,” and the concept of “Khulla” in the dissolution of marriage. The two carry different legal implications, particularly regarding the wife’s liability to return the dower amount.

In the case of Tafweez of Talaq, the husband delegates the right of divorce to the wife, granting her the authority to repudiate the marriage herself. This delegation is based on a mutual agreement between the parties. On the other hand, Khulla involves the wife seeking a divorce or the dissolution of marriage from her husband or through the court. In this scenario, the wife initiates the process to terminate the marital bond.

It is essential to recognize that the exercise of the delegated right of divorce does not automatically equate to Khulla. A husband cannot utilize this distinction as a defense solely to avoid fulfilling his obligation of paying the dower amount. If the husband claims to have already paid the dower, he must provide evidence to substantiate this claim. However, if he fails to provide evidence of payment, he is obligated to pay the outstanding dower amount, along with any backdated maintenance and child support, if applicable.

In reference to such case in  PLD 2011 Lahore 265, the court made significant determinations regarding the exercise of the delegated right of divorce by a wife under the Muslim Family Laws Ordinance, 1961. The following key points were established:

• Application of S.8 of the Muslim Family Laws Ordinance, 1961: The court held that the provisions of S.7 of the Muslim Family Laws Ordinance, 1961 would apply mutatis mutandis when a wife exercises the delegated right of divorce.
• Absence of formal mode for exercise: The court noted that no formal mode for the exercise of the right of divorce was prescribed by law. The only requirement was to provide notice in writing to the Chairman of the Arbitration Council regarding the exercise of the right.
• Validity of pronouncement and execution: The court acknowledged that the wife duly made the pronouncement of divorce by executing the divorce deed and transmitting copies to both her husband and the Chairman of the Arbitration Council.
• Misconception regarding the nature of divorce: The petitioner’s contention that the divorce was not considered a ‘talaq’ because it was executed through a divorce deed was deemed misconceived by the court. The court clarified that divorce signifies the dissolution of marriage (talaq) and separation.
• Effective date of notice: As per S.7(3) of the Muslim Family Laws Ordinance, 1961, notice of ‘talaq’ becomes effective after the expiration of 90 days from its delivery to the Chairman of the Arbitration Council, unless revoked.

For more context: 

In the context of the present matter, it is crucial to refer to the pertinent provisions outlined in the Muslim Family Laws Ordinance, 1961. The following provisions are particularly relevant:

Section 7 of the Muslim Family Laws Ordinance, 1961:

• Requirement of Notice: According to Section 7(1), any man who intends to divorce his wife must provide written notice of the pronouncement of talaq, in any form, to the Chairman of the Arbitration Council. A copy of this notice must also be supplied to the wife.
• Arbitration Council: Section 7(4) states that within thirty days of receiving the notice mentioned in subsection (1), the Chairman shall establish an Arbitration Council with the objective of facilitating reconciliation between the parties. The Arbitration Council is entrusted with taking all necessary measures to achieve this reconciliation.

Section 8 of the Muslim Family Laws Ordinance, 1961:

• Delegation of Right to Divorce: Section 8 deals with cases where the right to divorce has been properly delegated to the wife or any third party, and when either party wishes to dissolve the marriage through means other than talaq. In such instances, Section 7 provisions shall apply mutatis mutandis, with necessary modifications.
• Talaq-e-Tafweez under section 18 MFLO 1961: This section recognizes a specific form of divorce known as “Talaq-e-Tafweez,” wherein the husband delegates the right of divorce to the wife or a third person, whether conditionally or unconditionally, temporarily or permanently. It stipulates that the procedure outlined in Section 7 for divorce must be followed in such cases. The phrase “after the pronouncement of Talaq in any form whatsoever” in Section 7(1) encompasses divorce in written form, which has been acknowledged by Muslim jurists.

Archived queries from 2017

Question: My sister and brother in law have been taking advantage of my  father’s  ill health and secretly and illegally transferring properties and assets in their own names and also forging his signatures on various documents. My father due to mental disorder and ailment of dementia is lacking ability to look after his affairs and matters related to his properties. Now they are not allowing  me to meet my  father.What are my options as I am aware they may even take him abroad forcefully.

Your first option would be a writ of Habeous Corpus or more precise in an acton under 491 CrPc.In the habeas corpus petition, you will cite that your father (alleged detenu) is confined in your family house in Karachi by your siblings and you can request the court to issue a writ of habeas corpus with the directions to the local SHO to produce the alleged detenu in the court.

Regarding the transfers of property by your sister and brother-in-law, as you are currently in Karachi, it is advisable to seek relief from the Court of Protection under the Mental Health Act 2013. The Court of Protection has the authority to personally examine individuals alleged to be mentally disordered and may appoint a person to assess their mental capacity and condition. In addition, the court may authorize individuals to have access to the mentally disordered person for examination purposes. If necessary, the court can appoint two or more persons as assessors in the proceedings.

In situations where personal service would be ineffective, the Court of Protection has the power to serve the alleged mentally disordered person through substituted service. It is important to note that your father being taken out of Pakistan does not eliminate the jurisdiction of the Court of Protection in Pakistan. The court, in the pending habeas corpus petition, has ample authority to enforce attendance by employing various means and methods. You can request the court to ensure the production of your father, who was allegedly taken out of the court’s jurisdiction during the proceedings. You can also apply to the Court of Protection, at your own expense, for the appointment of a person who can visit your father abroad and report on his mental state to the court. The Court of Protection can serve the mentally disordered person through the Pakistan Embassy, including the person responsible for the care of the alleged mentally disordered person abroad.

The Sindh Mental Health Act, 2013 is a specialized legislation designed to address and regulate the care, treatment, and management of property for mentally disordered persons. Based on your own assertion that your father is suffering from dementia and Alzheimer’s disease, it is evident that he falls within the definition of a mentally disordered person under the 2013 Act. Mental disorder, as defined in the Act, includes any mental illness requiring treatment due to a disorder of the mind, excluding mental impairment.

Therefore, it is recommended to pursue the appropriate remedy by approaching the Court of Protection instead of filing a similar suit for relief in the High Court of Sindh. The High Court of Sindh primarily acts as an appellate court against orders issued by the Court of Protection. By approaching the Court of Protection, you will be following the proper legal process and seeking resolution in a specialized court for matters related to mentally disordered persons.

You may want to look up the case of Mehr ASHRAF v. STATION HOUSE OFFICER, as reported in 2022 PLD 328 Lahore High Court Lahore, where the petitioner, Mehr ASHRAF, sought the declaration of his father as mentally disordered through a habeas corpus petition. The petitioner and the respondent were siblings, and they alleged that their father, who had been living with the respondent for over three decades, had lost his mental balance. They further claimed that the respondent had unlawfully confined him and prevented them from meeting him.

The petitioners filed the habeas corpus petition before the Sessions Judge, who, after recording the statement of the alleged detenu, dismissed the petition. The Sessions Judge observed that the detenu was in good physical and mental health. The petitioners challenged this observation, seeking its expunction.

The Lahore High Court noted that the Mental Health Ordinance, 2001, was a specific law with limited applicability to matters covered by it. The Court emphasized that the proceedings in this case were under Section 491 of the Criminal Procedure Code, and not under Section 29 of the Mental Health Ordinance, 2001. Therefore, the Mental Health Ordinance did not apply to the present case, which concerned the issue of wrongful confinement.

The Court found no fault with the observation made by the Sessions Judge. It highlighted that the petitioner had claimed that the detenu was mentally disordered and wrongfully confined, necessitating a thorough evaluation of his mental health. The Sessions Judge was obligated to engage with the detenu, form an opinion about his mental health, and record his statement. The impugned observation was a part of these proceedings.

Additionally, the documents presented by the respondents indicated that the petitioners were attempting to manipulate the situation due to concerns about property transfer. They were striving to label their father as paranoid to prevent further property transactions. The Lahore High Court dismissed the constitutional petition with costs.In conclusion, the case highlights the distinction between the Mental Health Ordinance and the Criminal Procedure Code in addressing matters involving mentally disordered individuals. The Court upheld the Sessions Judge’s observation as a valid part of the proceedings and underscored the importance of fair evaluation and due process in such cases.

Q: Our brother is suing us in court by saying that our properties are in fact his properties because they were bought by our fathers money (benami transactions allegedly).How will the court respond to his claim because these are in fact properties purchased and owned by us wiith our own funds hence are not benami. This can  be established from our Tax Returns too. Also, in what capacity is he trying to claim rights on our property when allegedly the money belonged to our father? I am sending you the case documents pending in courts

Your remedy would be to challenge this claim stating that your brother needs to disclose any enforceable right or entitlement on the properties owned and possessed by yourself.I see from these documents that he has sued under section 42 of the Specific relief Act 1877 and have perused his pleading.In this regard please note our comments as follows : 

Whether your brother can sue for a “right or interest” in the property under Section 42 of the Specific Relief Act 1877 during the lifetime of your father is a matter of legal consideration. It is important to note that mere feelings of being left out by your father do not automatically confer a legal right to initiate such a lawsuit.

Section 42 of the Specific Relief Act states that any person who is entitled to a legal character or right concerning a property may bring a lawsuit against any person who denies their title to that character or right. However, the court has the discretion to make a declaration of entitlement only in cases where it is deemed appropriate.

The purpose of Section 42 is to clearly outline the circumstances in which a declaration of right, separate from other forms of relief, may be granted. It is not intended to address matters based solely on sentiments or personal grievances unrelated to the vindication of the plaintiff’s title or status to a property. The provision cannot be invoked for the mere satisfaction of one’s ego or to settle grudges against others.

It is important to understand that during the lifetime of parents, a plaintiff cannot claim a right of inheritance. According to Muslim law, the properties of a deceased individual are utilized for funeral expenses, debts, and legacies (wills), if any, before distribution among the legal heirs. The right of inheritance is bestowed upon the legal heirs only after the death of the ancestor when succession opens.

To understand this further lets have a look at the elements of an enforceable Benami transaction.Let’s delve into the concept of benami transactions, which refers to a transaction where a property is held by someone as an ostensible owner on behalf of the beneficial owner. In such transactions, the property is purchased in the name of another person, known as the benamidar, while the actual owner is the person who financed the transaction. Although the property is registered in the name of the benamidar, the true ownership lies with the person who funded the purchase.

Typically, assets acquired in the name of a spouse or child, with funds originating from known sources of income, are considered benami properties. However, a crucial question arises as to who can challenge such transactions. The burden of proof lies with the party alleging that a particular person is a benamidar. To determine whether a transaction involving the purchase of property in the name of a spouse is benami or not, it ultimately depends on the intentions of the parties at the time of purchase.

While the source of funds is an important factor in ascertaining the character of the transaction, it is not always conclusive in determining the real ownership. Other factors must also be taken into consideration, such as possession of title documents, the conduct of the parties involved after the purchase, property management, enjoyment of benefits, and recognition as the titleholder by both the parties concerned and government departments. These factors vary in each case and require concrete evidence for proper evaluation.

In the case of Ch. Ghulam Rasool vs. Nusrat Rasool (PLD 2008 S.C. 146), the Supreme Court established two essential elements to establish the benami status of a transaction. Firstly, there must be an agreement, either express or implied, between the ostensible owner and the purchaser, where the property is purchased in the name of the ostensible owner for the benefit of the actual purchaser. Secondly, it must be proven that the transaction was actually conducted between the real purchaser and the seller, excluding the ostensible owner.

Similarly, in the case of Abdul Majeed vs. Amir Muhammad (2005 SCMR 577), the Supreme Court emphasized that determining the benami character of a transaction requires considering various factors. While the source of purchase money is significant, it is not the sole determinant. The court must assess other circumstances indicating the purchaser’s intention for the property to belong to the person in whose favor the conveyance was made. In benami transactions, the actual possession of the property and receipt of rents play a crucial role.

These legal principles highlight the complexities involved in identifying and proving the benami nature of a transaction. Each case is unique, and a comprehensive evaluation of all relevant factors and concrete evidence is necessary to determine the true nature of the transaction.

In essence your  claim is strong because these properties were not gifted to you but rather all were directly purchased by your  funds. If there was any right to claim these alleged benami properties then the same lies only with only your father himself and he is not a party to this case. It was further contended that the suit is barred under Section 42 of the Specific Relief Act. The plaintiff has no locus standi as none of the properties claimed are owned/purchased by him. Your main argument will be that this suit  does not disclose any cause of action as it is based on untrue and fabricated facts. 

I am an overseas Pakistani.For ten years I have been riddled by lawsuits and FIRs by relatives trying to take over my land and I have defended myself and won each and every case.Do I have a civil claim against them for wasting my time?

The law of malicious prosecution defines malicious prosecution as  a grievance that an individual should be harassed by legal proceedings improperly instituted against him. If there is no foundation for them no doubt they will not ultimately succeed, but during their progress, they may cause great injury. It is the right of everyone to put the law in motion, if he does so with the honest intention of protecting his own or the public interest or if the circumstances are such, be his motives what they may, as to render it probable prima facie that the law is on his side. But it is an abuse of that right to proceed maliciously and without reasonable and probable cause for anticipating success. Such an abuse of necessity may be injurious as involving damage to character or it may, in any particular cause bring about damage, to a person or property”. 

In order to claim damages for malicious prosecution it is well-settled exposition of law that the plaintiff has to prove (i). that he was prosecuted by the defendant (ii) that the prosecution ended in the plaintiff’s favour (iii) that the defendant acted without reasonable and probable cause and (iv) that the defendant was actuated by malice. All these elementary set of circumstances have to accumulate or mount up and if any of them is found lacking, the suit must be failed. According to Pakistani case law the burden of proving absence of reasonable and probable cause is on the plaintiff, who thus, undertakes the notoriously difficult task, of proving a negative.  It has been ten years however you have to keep in mind that the alleged cause of action is mentioned for the purposes of limitation which is one year under Article 23 of the Limitation Act from the date of acquittal or the prosecution is otherwise terminated. In this case you will attach all judgements to support the  view that you were  acquitted from the charges and prosecution was culminated or terminated in your favour and if the case is still pending then it does not give any rise to lodge this suit on account of malicious prosecution pending adjudication of the proceedings in the court of competent jurisdiction. Please make sure you quantify your damages in your matter and attach all evidence of your consequential losses and expenses of litigation.

My brothers have been spreading rumors about me and my Company’s financial ability to support my employees and have claimed that I do not pay my employees and creditors.My accounts are all paid up and I have a stellar financial situation. Because of their rumors which I have recorded on Video and WhatsApp messages as well as emails to my potential investors, I have lost many overseas investors who were willing to fund my projects.How do I stop this character assassination?

The allegation of character assassination essentially refers to defamation, which is regulated by the Defamation Ordinance, 2002. Defamation encompasses any wrongful act, publication, or circulation of false statements or representations, whether orally, in written form, or visually, that harm a person’s reputation, diminish their standing in the eyes of others, or subject them to ridicule, unjust criticism, dislike, contempt, or hatred. Such defamation is actionable under Section 3 of the Defamation Ordinance, 2002.

Defamation can take the form of slander when it involves false oral statements or representations, while it can be considered libel when it involves false written, documentary, or visual statements or representations, including those transmitted electronically or through other means.

If you wish to pursue a lawsuit for damages resulting from defamation, it is important to adhere to the requirements outlined in the Defamation Ordinance, 2002. Prior to filing a lawsuit, you must fulfill certain mandatory prerequisites, such as serving a notice of action as provided under Section 8 of the Ordinance. According to this section, no action can be initiated unless the plaintiff, within two months of becoming aware of the defamatory matter, provides the defendant with a written notice of intent to bring legal action, specifying the defamatory content.

To assess the limitation aspect of your claim, it is necessary to know the alleged date of the cause of action. The Limitation Act sets a one-year time limit for claims related to libel (governed by Article 24) and slander (governed by Article 25).

From a practical standpoint, it would be advisable to begin with a well-drafted legal notice, detailing the evidence you have gathered and how this defamatory conduct has negatively impacted your relationship with investors. It is possible that you possess emails or other forms of communication from investors explicitly expressing their unwillingness to invest with you based on information provided by your brothers.

Taking these steps will help ensure that your legal rights are protected and that you can pursue appropriate remedies in light of the defamatory actions.

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Query from 2023: Can I sell my property in Pakistan while I am in Canada/Overseas?

If you are considering selling your property in Pakistan while residing in Canada, it is important to exercise caution and make informed decisions regarding the power of attorney. Granting someone power of attorney means entrusting them with the authority to negotiate and decide upon the sale of your property, as well as collect and dispose of the sale proceeds, as outlined in the standard language of power of attorneys.

Based on our vast experience of property transactions and litigation , we have observed that individuals who rely on real estate agents or relatives to handle the sale of their property from abroad often encounter difficulties. Sometimes the relatives or real estate agent collect the money and refuse to give it to the overseas Pakistanis.Sometimes they undervalue the contract and take a large cut off the payment for themselves.They might even engineer a sham sale of a considerably low value through a third party they are in collusion with, so they can profit off the resale of the property. Considering the substantial value of your property, it is advisable to consider returning to Pakistan to personally oversee the sale and collect the proceeds directly into your own bank account. By avoiding a sale by proxy (via power of attorney, you can ensure a more hands-on approach to your contracts, especially those of substantial value.

Completing the sale and managing the financial transactions yourself provides you with greater control and reduces the potential risks associated with relying on others to handle such matters on your behalf. While it may require some effort to make the trip back to Pakistan, it can offer you peace of mind knowing that you are directly involved in the process and can personally manage the sale of your valuable property.

Remember, property transactions involve significant financial implications, and being present during the sale ensures that you can oversee every aspect and protect your interests more effectively.

July 2023: A message from Josh and Mak International to  Children of Divorced Parents

As a law firm specializing in family law, we have been working with families and individuals navigating the complexities of divorce and separation for almost 15 years now. We understand that this can be an incredibly challenging and emotionally charged time for everyone involved, especially the children.

Today, we want to address a matter close to our hearts—the feelings of resentment and hurt that may arise when parents move on to new relationships. It is a situation that many children of divorced parents in Pakistan and abroad find themselves in, and it is important to remember that you are not alone.

We would like to emphasize the importance of forgiveness, not only for the sake of your own well-being but also for the betterment of your future relationships and personal growth. It is understandable to feel hurt and betrayed when your parents form new families, but it is crucial to remember that you may not know the full story of what transpired between them. Real-life relationships are complex, and there are often multiple factors that contribute to a separation or divorce.

Instead of holding onto resentment, we encourage you to try to understand that your parents are human beings who make mistakes, just like anyone else. They are also individuals seeking their own happiness and fulfillment. It is not easy for them either, as they navigate the challenges of co-parenting and building new lives.

We urge you to focus on your own personal growth and development. Use this experience as an opportunity to become the best version of yourself. Learn from the lessons you have witnessed and strive to be a compassionate and understanding individual. By letting go of resentment, you free yourself from the burden of negativity and create space for positivity and happiness to enter your life.

Furthermore, we implore you to consider your role as a potential parent in the future. Use this experience to shape your own parenting style and ensure that you prioritize open communication, understanding, and empathy. Break the cycle of resentment and strive to build healthy and loving relationships with your own children someday.

Remember, forgiveness does not mean condoning or forgetting what has happened. It is a personal choice to release the negative emotions that can hold us back from living fulfilling lives. Seek support from friends, family, or professional counselors if needed. Surround yourself with positive influences and engage in activities that bring you joy and fulfillment.

At Josh and Mak International we are here to support you in any legal matters related to family law especially where you are not receiving financial support from your parents despite court orders, or having problems being allowed to take life altering decisions on your own as a minor under guardianship orders. You may also need anonymous advice if you are going through abuse at the hands of the parent having custody.

If you just want to talk, click on the WhatsApp button at the bottom of this page.

With warmest regards,

Josh and Mak International

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Query from 2014:

Question: My khala (maternal aunt) in Karachi has become devastated after the death of her husband. Her mental state is very bad, and I don’t think she is able to handle making decisions. We have succession proceedings ongoing for her husband’s money and assets. How will the court tackle this? She is also the only legal heir of her husband as his father and mother have died, and he was a single child. My Aunt has no children. She is living with me and struggling with her mental health every day.

Answer: Upon reviewing your documents of the ongoing succession matter, it is evident that your Aunts lawyers have already filed a suit in Karachi under section 372 of the Succession Act, 1925, with the prayer that the Succession Certificate / Letter of Administration may be issued in favor of your Aunt in respect of the mentioned movable and immovable properties.   According to your query, the deceased was issueless, and at the time of his death, he left behind only one widow as his parents had already passed away during his lifetime. We have also observed that another case was filed prior to this before the District & Sessions Judge, Karachi (Central), which could not be disposed of due to want of pecuniary jurisdiction. The court advised you to approach the Sindh High Court for obtaining the Succession Certificate in this matter.   Based on our review of previous cases, the court can and will inquire into the mental state of your Aunt. Once it becomes obvious that she is not in a proper mental state, the court will seek someone to oversee her affairs. We advise you to file an application under Order 32 Rule 1, read with section 151 CPC, praying therein that the Petitioner has lost her mental equilibrium and is not in a position to continue with these proceedings intelligently. Therefore, you, as her nephew with whom she is residing, may be appointed to act as her guardian.   Regarding the prevailing legal view for her position as the sole legal heir, it is as follows: As she is the only legal heir of the deceased, applying the Islamic doctrine of return (Radd), she is entitled to all the movable properties left by the deceased. While some legal views suggest that only 1/4th of the said movable properties should go to the issueless widow in such a situation as provided under the law, the court will consider the fact that the husband died issueless and his parents had also expired during his lifetime. If, despite publication of newspaper notice, no other person has come forward to claim themselves as the legal heir of the deceased or object to the grant of the succession certificate in favor of the widow, the doctrine of Radd will come into effect. In such circumstances, the widow would inherit 1/4th of the estate as a sharer, and the remaining 3/4th will revert to her on the doctrine of return (Radd).   Based on the above legal position, in my opinion, the succession certificate should be issued exclusively in the name of the Aunt as the sole legal heir of the deceased.   Regarding your Aunt’s mental health, this matter requires serious consideration. As mentioned earlier, under Order 32 Rule 2 C.P.C, which allows for seeking relief for your appointment as a guardian under Order 32 Rule 15 C.P.C, the court may have concerns about appointing you as the sole guardian for your Aunt due to potential risks and safety issues. It is the duty of the court to carefully evaluate these aspects before granting the succession certificate in favor of the petitioner through her guardian. In most precedents, the court has opted to appoint the Nazir of the Court as a joint guardian with a relative of the Petitioner. In such a case, the Nazir may be entrusted with maintaining proper accounts of the income generated from the funds available to your Aunt on a yearly basis. It is common for the court to order that large sums being inherited be immediately invested in a government national saving scheme on behalf of the surviving legal heir. Additionally, the court may restrict the disposal of any movable property belonging to the mentally infirm legal heir without prior permission of the Court. You can request the court to set aside a sum of money separately as a fund, which you will be entrusted with, to meet your Aunt’s medical and day-to-day expenses.

Response to several queries from people in the property sector  from July 2023

Subject: Avoidance of Cash Transactions in Pakistan

To the Public at Large in Pakistan,

This is a public interest notice from Josh and Mak International especially for overseas Pakistanis remitting funds to Pakistan to relatives and friends for cash payment to sellers and property dealers. This notice is to bring your attention to the significance of avoiding cash transactions in your day-to-day financial dealings. This notice aims to inform and create awareness among the public regarding the potential legal and compliance challenges associated with cash transactions, including difficulties in proof, tax implications, and Anti-Money Laundering (AML) concerns.

Difficulties in Proof:

Cash transactions often lack a proper paper trail, making it challenging to provide evidence in legal proceedings. In other words the party receiving the cash can simply they ever received any money and in the absence of video or technical evidence or a proper documented written receipt of the funds.In the event of a dispute or litigation, the absence of a clear documentation trail can weaken your legal position and hinder the effective resolution of conflicts.People denying that they received a cash payment from you will even challenge the veracity of the receipts they have signed themselves. Therefore, we strongly advise against engaging in cash transactions and encourage the use of traceable and verifiable payment methods such as bank transfers, cheques, or electronic payment systems.

Tax Implications:

Cash transactions can lead to tax-related issues and non-compliance with the applicable tax laws in Pakistan. It is crucial to maintain proper records of financial transactions to accurately report income and fulfill tax obligations. By relying on cash transactions, you risk potential tax assessments, penalties, or legal consequences. To ensure compliance with tax laws and avoid any adverse implications, we recommend conducting financial transactions through legitimate channels and maintaining appropriate documentation.

Anti-Money Laundering (AML) Concerns:

Cash transactions can raise suspicions and increase the risk of facilitating money laundering activities. As part of Pakistan’s commitment to combating money laundering and terrorist financing, various laws and regulations have been enacted to establish robust AML frameworks. Engaging in cash transactions can inadvertently expose individuals to potential AML risks and legal consequences. To safeguard against such risks and maintain compliance with AML regulations, it is advisable to use traceable payment methods and adopt a transparent approach to financial transactions.

In light of the above, we strongly urge the public at large in Pakistan and Overseas Pakistanis to exercise caution and refrain from making cash transactions wherever possible. Embracing digital payment methods, online banking, and electronic fund transfers not only provides convenience but also ensures transparency, traceability, and compliance with legal and regulatory requirements.

Should you require further legal guidance or assistance in understanding the implications of cash transactions, tax matters, or AML regulations, we encourage you to consult with qualified legal professionals from our team who can provide tailored advice based on your specific circumstances.

Please treat this notice as a sincere effort to create awareness and promote legal compliance within the general public of Pakistan. By adopting responsible financial practices, we can collectively contribute to a transparent and law-abiding society.

Yours faithfully,

Josh and Mak International

Query from 2022:

Question: A situation where one legal heir in Islamabad, Pakistan has taken over the property and is getting rent from it and is using it for his own interests. There has been no succession law suit or heirship declaration suit filed till date. The rest of the legal heirs are overseas in the UK. The legal heir in Pakistan has cut everyone off and is not responding.

Answer: In this situation, it is important to take legal action to protect the rights of the overseas legal heirs and resolve the property dispute. Here are the steps and documents required to file the necessary cases:

1. Obtain a Decline Certificate from NADRA in the UK: Inform NADRA that minors are involved (i.e., the children of the deceased siblings) and that the siblings are not cooperating to obtain a NADRA Succession Certificate.
2. Two Cases to be Filed: There will be two cases that need to be filed. The first is a suit for declaration to transfer the property into the names of the legal heirs. The second case is for the recovery of profits and damages from the legal heir in Pakistan who is collecting rent from the property.
3. Required Documents: (a) Power of Attorney: A duly attested Power of Attorney from the Pakistani Embassy in the UK, with the signatures of all siblings who agree to file the cases. (b) Death Certificate: The death certificate of the father and any legal heirs who have passed away, such as the mother and brother. (c) ID Cards or Verifiable Documents: ID cards of all living and deceased persons. If they do not have Pakistani ID cards, then copies of their passports or any document that proves the relationship to the deceased. (d) Property Documents: The property documents and allotment letter from CDA (Capital Development Authority) of the house. (e) NADRA’s Decline Certificate: The previously mentioned Decline Certificate from NADRA. (f) Family Registration Certificate (FRC): The FRC from NADRA, which contains the legal details of all legal heirs.

Regarding your specific questions:

1. We can file a suit for recovery with mesne profits and an heirship declaration suit on your behalf.
2. There is no specific time limit to file these suits. It is advisable to file them simultaneously and pursue them actively.
3. Since the legal heir in Islamabad is collecting rent through a property dealer, both the legal heir and the property dealer can be named as defendants in the cases. We will need their postal addresses so that the court can serve them notice.

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Recent queries from 2023

Recent Budget Impact on Taxation for IT Sector, current IT Taxation status

The recent budget for the year 2023 did not bring any significant changes to the taxation of the IT sector. The existing position remains the same. IT services or IT-enabled services continue to be exempt from tax under clause (133) of Part-I of the Second Schedule to the Income Tax Ordinance, 2001. This exemption is subject to the condition that 80% of the export earnings are remitted to Pakistan through normal banking channels. However, it is important to note that persons claiming exemptions are still subject to minimum tax on their turnover.

There was a proposal in the Budget 2023 to include persons engaged in the provision of IT services and IT-enabled services under the special tax regime for Small and Medium Enterprises (SMEs). However, this proposal did not make it into the Finance Act 2023. Therefore, as of now, the IT sector does not have SME status in terms of taxation.Since the IT sector has not been granted SME status in the recent budget, the specific benefits associated with SME status, such as tax incentives, exemptions, and reliefs, are not applicable to the IT sector at present.

Connected query from a software house: Protecting IP Interests as a Gaming Developer:

As a gaming developer, it is crucial to protect your intellectual property (IP) interests. Copyright registration is an important step in safeguarding your game and its various components. While game titles are not specifically protected by copyright, there are several elements of a video game that can be protected. Here are some components that can be considered for copyright registration:

1. Audio-Visual Elements: This includes the visual aspects of the game, such as graphics, characters, animations, and overall visual design. It also covers audio elements like background music, sound effects, and voiceovers.
2. Storyline and Dialogue: The narrative elements of the game, including the storyline, plot, dialogues, and scripted events, are eligible for copyright protection.
3. Source Code: The programming code that powers the game, known as the source code, is considered a creative expression and can be protected by copyright.
4. Artistic Assets: Artistic assets, such as illustrations, concept art, character designs, and environmental artwork, are protectable under copyright law.
5. Level Design: The layout and design of individual game levels or environments, including the arrangement of obstacles, puzzles, and challenges, can also be protected by copyright.

To protect your IP interests, you can consider copyright registration both in the United States (at the U.S. Copyright Office) and in Pakistan. Registering your copyright provides you with legal evidence of ownership and offers stronger protection against potential infringement by copycat developers. It is advisable to seek assistance from legal professionals experienced in copyright registration to ensure proper and effective protection of your game and its related components.

Archived from 2016

Is it important to trademark a logo before incorporation or should it be done after the company or firm is incorporated?

This is a common question often asked by our clients, and we always provide them with our professional advice on the matter.

In general, we recommend waiting to trademark a logo until after the company or firm is incorporated. By incorporating your company first, you establish a proper legal entity under which you will be trading. This ensures that the company/firm itself owns the trademark, providing stronger protection and ownership rights.

If you were to obtain a trademark before incorporation, you would need to go through additional steps and devote additional resources to assign, license, or transfer the trademark to the company’s name once it is incorporated. This can lead to additional complexities and potential legal issues.

However, there may be situations where there is intense competition or the owner has concerns about the trademark being ‘picked up’ or poached by competitors. In such cases, it may be advisable to register the trademark in the owner’s name before incorporation to secure immediate protection.

Additionally, we advise owners to create online proof of the trademark by using it extensively in connection with their business website. This “commercial use” online can automatically establish a common law trademark in jurisdictions such as the U.S., Canada, Britain, etc. While registering the trademark in high-risk jurisdictions like Pakistan may require additional effort, having evidence of commercial use can strengthen your case for registration.

In conclusion, while it is generally recommended to wait and trademark the logo after incorporation, there may be exceptions based on individual circumstances. We encourage clients to consult with our legal experts to determine the best course of action based on their specific situation and jurisdiction.

Archived from 2020:

Response to several queries on applicability of Inheritance Tax or Gift Tax to Foreign Owners of Real Estate and Other Assets in Pakistan

The inheritance tax or gift tax regime does not apply to foreign owners of real estate and other assets in Pakistan. This means that foreign individuals who own properties or possess other assets in the Pakistani  jurisdiction are not subject to inheritance or gift tax obligations in relation to those assets.

Inheritance tax is typically imposed on the transfer of property or assets from a deceased person to their beneficiaries, while gift tax is levied on the transfer of assets in Pakistan from one living person to another as a gift. However, in the case of foreign owners of real estate and other assets in Pakistan, these tax obligations do not arise.

Archived from 2018:

Question: My parents are forcing me to marry my cousin. I live in Punjab. What are my options?

Answer: Under-age and forced marriage is a serious offence in Punjab, and there are legal provisions in place to protect individuals in such situations. The following information outlines the options available to address this issue:

1. Age Restrictions: According to the Punjab Child Marriage Restraint (Amendment) Act 2015, it is a crime for any person to marry a girl below the age of 16. This includes the individuals involved in conducting the marriage, such as the Nikkah Solemnizer and Nikkah Registrar. The penalty for such an offence can include imprisonment for up to 6 months and a fine of Rs. 50,000.
2. Illegal Customs: Customs like Wanni (marriage in exchange for compromise) and marriage with the Holy Quran are considered illegal under the law. Engaging in such customs can result in imprisonment for a period ranging from 3 to 7 years and a fine of Rs. 500,000, as per Section 310-A and Section 498-C of the Pakistan Penal Code, respectively.
3. Forced Marriage: If someone is being forcibly married against their will, it is a punishable offence under Section 498-B of the Pakistan Penal Code. The person responsible for the forced marriage can face imprisonment for a period ranging from 3 to 7 years and a fine of Rs. 500,000.
4. Reporting and Complaints: If you find yourself in a situation of underage or forced marriage, you have the right to take action. Complaints regarding underage marriages can be registered with the local police, Union Council, or Judicial Magistrate. They can guide you through the legal process and initiate appropriate legal actions against the perpetrators.

It is crucial to understand that underage and forced marriages are illegal acts, and the law provides protections for individuals facing such situations.

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(2015-2019) Common query : False FIR Registered

Legal Note: Section 182 of the Pakistan Penal Code – False Case Registration

Section 182 of the Pakistan Penal Code addresses the offence of deliberately registering a false case. This section imposes a maximum penalty of six months in prison, a fine, or both, on individuals found guilty of this offence. It is important to note that Section 182 is classified as a non-cognizable offence, meaning that the police cannot automatically register a case under this section.

In order for proceedings to be initiated under Section 182, a court must order the police to take action against an individual based on a complaint brought before the court. This complaint may be filed by the police themselves or by another person who has knowledge of the false case. The court’s involvement ensures that the matter is thoroughly examined and that appropriate legal action is taken against the accused.

The inclusion of Section 182 in the Pakistan Penal Code serves as a deterrent against the filing of false cases, which can result in wasting the resources of the judicial system and causing harm to innocent individuals. By making it a punishable offence, the law aims to uphold the principles of justice and discourage the misuse of legal processes for personal gain or malicious intent.

It is essential for individuals to understand the consequences of filing false cases and the importance of truthfulness in legal proceedings. The provisions of Section 182 contribute to maintaining the integrity of the legal system and protecting the rights of those involved in legal matters.

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Earlier queries from 2007-2010

Legal Note: Transfer of Investigation in Dissatisfaction with Police Investigation (Punjab)

The Police Order, 2002, provides a mechanism for the transfer of investigation in cases where either party is not satisfied with the quality of the investigation or the conduct of the investigating officer. The process for requesting a transfer of investigation is as follows:

1. Request for Transfer: Any party to a case can request a transfer of investigation if they are not satisfied with the ongoing investigation. The request should be made to the district’s Superintendent of Police, Investigation, or the concerned District Police Officer, the Regional Police Officer (DIG or Addl IGP), or the Addl. IGP, Investigation, who is based in the Central Police Office (CPO), Punjab. It is preferable to make the complaint in writing, attaching a copy of the complainant’s National Identity Card. The complaint should include the FIR number of the case and the name of the concerned police station and district.
2. First Change: In the Capital City District of Lahore, the first change is ordered by the Capital City Police Officer after a review by a district board consisting of three Superintendents of Police. The District Standing Board reviews the complaint and makes a recommendation to the Addl. Inspector General of Police, Investigation. If the board deems it appropriate, a transfer of investigation is ordered, and the case is taken up by the Regional Investigation Branch.
3. Second Change: The second change is ordered by the Inspector-General of Police (IGP), Punjab. A complaint can be submitted to the IGP or the Addl. IGP, Investigation. The matter is then referred to the Provincial Standing Board, which consists of a DIG and two Superintendents of Police or Senior Superintendents of Police in the Investigation Branch, Punjab, located in the Central Police Office (CPO), Punjab. If the board recommends a second change and the IGP approves it, the investigation is transferred to the Investigation Branch, Punjab.

It is important to note that a case is usually not recommended for transfer unless the investigation has been completed. The investigating officers typically continue their work while the transfer is being considered.

The provisions outlined in the Police Order, 2002, aim to address concerns regarding the quality and conduct of investigations. By providing a procedure for the transfer of investigation, it ensures that parties have recourse if they are dissatisfied with the progress or handling of their case.

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Legal Professional Note: Safety Measures for Overseas Pakistanis and Foreigners in Pakistan

Ensuring the safety of overseas Pakistanis and foreigners residing or visiting Pakistan is of paramount importance. The following measures are recommended to enhance personal safety and security:

1. Stay Alert and Be Aware: Maintain a high level of vigilance and be mindful of your surroundings at all times.
2. Familiarize Yourself: Take the time to get to know the neighborhoods and people in the areas where you live and work. Building good relationships with neighbors can contribute to a sense of community security.
3. Authenticate Individuals: Before renting accommodation, thoroughly verify the background and identity of potential tenants. This can help prevent unauthorized or suspicious individuals from gaining access to your property.
4. Maintain Vigilance in Shops and Offices: Ensure proper security arrangements are in place in your shops or offices. Regularly monitor the surroundings and promptly report any unusual or suspicious activities to the nearest police station.
5. Report Suspicious Activities: If you observe anything unusual or suspicious in your surroundings, carefully evaluate the situation. If you are unable to determine whether a threat exists or not, inform the local police station so that they can assess and respond accordingly.
6. Inform Police about Strangers: Notify the police if you notice any strangers in your neighborhood who appear suspicious or whose activities raise concerns.
7. Avoid Unnecessary Crowded Places: When possible, minimize visits to crowded places, markets, hotels, offices, and video shops unless necessary. This can reduce the risk of potential security incidents.
8. Be Cautious with Unidentified Objects: Refrain from touching or accepting any unidentified objects, as they may potentially contain explosives. Objects such as toys, transistors, lunch boxes, bottles, and bags should be treated with caution.
9. Maintain Eye Contact: Establish eye contact with people around you, as it can act as a deterrent to potential threats and convey a sense of alertness.
10. Check for Suspicious Objects in Vehicles: Before traveling, inspect under your seats for any suspicious objects that may have been placed in your vehicle.
11. Keep Emergency Contact Information: Ensure that your mobile phone is charged, and store all relevant emergency numbers in your contacts list.
12. Report Suspicious Activities: If you witness any suspicious activities, abandoned vehicles, or objects, promptly inform the nearest police station or call the emergency helpline number “15.”
13. Secure Your Vehicle: Lock all doors of your vehicle while driving, and always close windows and quarter glasses when parked. Verify the integrity of the car’s doors, boot, and bonnet before opening them, and seek assistance from local police if any signs of tampering are detected.
14. Recognize Signs of Suspicious Behavior: Be aware of signs that may indicate the presence of a potential threat, such as individuals wearing unusually bulky clothing, walking heavily, displaying excessive perspiration, or exhibiting nervous or suspicious behavior.

By following these recommended safety measures, overseas Pakistanis and foreigners can enhance their personal security and contribute to a safer environment for all. It is essential to remain vigilant and promptly report any concerns to the appropriate authorities to ensure a proactive response to potential security risks.

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Query from 2020:

Legal Advice Note: Property Rights and Foreign Will Dispute in Pakistan

Question: My wife and I live overseas. My wife died two years ago overseas. She has two houses in Pakistan, financed by me (husband). A few days before her death, my wife wrote a Will in the presence of a lawyer overseas. She appointed me as the Executor of the property anywhere in the world, including Pakistan. In her Will, she stated that only the Executor can take possession of her property. However, my late wife’s family is ignoring her Will and claiming a 1/6 share of her property in Pakistan, which was financed by me. Additionally, my late wife’s mother has been mentally disabled for many years. Can her mentally disabled mother still inherit a 1/6 share of my late wife’s property, which was financed by me?

Answer: In response to your query, the following legal advice applies:

1. Will and Executorship: If your late wife wrote a valid Will appointing you as the Executor and specifying that only the Executor can take possession of her property, the Will carries legal significance. However, the enforcement of the Will is limited to the country in which it was executed. In the case of the properties in Pakistan, the foreign probate of the Will can serve as proof of its due execution, provided a properly authenticated copy of the Will and probate are produced. In other cases, the court must satisfy itself of the due execution of the foreign Will.The Will can only apply to 1/3 of the total property of the deceased.
2. Inheritance Laws: Under Pakistani inheritance laws, property distribution is determined based on the Islamic legal heirs of the deceased. The mother/father, spouses, and children are considered legal heirs and are entitled to a share of the deceased’s estate. The remaining property (two-thirds) will be subject to the Islamic law of succession.
3. Financing the Property: While the fact that you financed the properties in your late wife’s name is relevant, Pakistani inheritance laws primarily focus on the legal ownership of the property rather than the financial contributions made. The legal ownership of the properties in your late wife’s name means that the properties will be distributed to her legal heirs and beneficiaries as per the applicable inheritance laws.
4. Mental Incapacity: If your late wife’s mother has been mentally disabled for many years, her capacity to inherit a share of your late wife’s property may be affected. In Pakistan, mental incapacity can impact a person’s legal rights, including inheritance. It may be necessary to provide evidence of her mental incapacity to support your case. However, if she has a manager or guardian appointed by the Court of Protection under the Mental Health Ordinance 2001, she may still be eligible to apply for inheritance through the appointed guardian/manager.

Given the complexity of the situation, it is advisable to act promptly and consult a legal professional to protect your interests and ensure the proper administration and distribution of your late wife’s estate in accordance with her wishes and the applicable laws in Pakistan.

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Query from 2016

Surprise Second Marriage of Husband

Question: My husband is getting married after leaving me alone with my three children after 20 years.The marriage took place in Punjab. I am devastated. What should I do?

Answer: In your situation, there are legal provisions in place to address the issue of your husband’s remarriage and protect the rights of women. As the marriage took place in Punjab,  it is important to be aware of the following information:

1. Remarriage Without Permission: According to the law, any person who enters into a second marriage without the permission of their first wife or the Arbitration Council is liable for imprisonment of up to one year and a fine of up to PKR 500,000 (Section 6 of the Muslim Family Laws Ordinance 1961).
2. Demand for Maintenance: As a wife, you have the right to demand maintenance for yourself and your children from your husband. You can consult the Union Council to seek assistance in claiming maintenance. The specific legal provisions regarding maintenance can be found in Section 9 of the Muslim Family Laws Ordinance 1961.
3. Marriage Registration: Every marriage solemnized under Muslim Law must be registered in accordance with the provisions of the law (Section 5 of the Muslim Family Laws Ordinance 1961). It is essential to ensure that the marriage is registered and proper documentation is in place.
4. Arbitration Council: If your husband fails to maintain you adequately or equitably, you have the option to apply to the Chairman, who will constitute an Arbitration Council to determine the matter of maintenance (Section 9 of the Muslim Family Laws Ordinance 1961).
5. Legal Remedies: In addition to seeking maintenance, you can also explore other legal remedies available to address your situation. If necessary, you can approach the concerned District Collector/DCO and file a complaint regarding the actions of your husband.

It is crucial to understand that the law provides protection and recourse for women facing such circumstances.

Connected Question :What are the legal safeguards for women in the way Nikah is pronounced?

Answer: When it comes to the pronouncement of Nikah (marriage contract), specific legal safeguards are in place to protect the rights of women. It is important to be aware of the following rights:

1. Reading and Filling of Nikah Nama: The Nikah khawan (marriage solemnizer) or Registrar is obligated to read out all the columns of the Nikah Nama (marriage contract form) to the groom and bride. They must accurately fill the Nikah Nama according to the answers provided by the parties. Violation of this obligation may result in punishment, including imprisonment for one month and a fine of PKR 25,000 (Section 5(2A) of the Registration of Marriages Act).
2. Registration of Nikah: It is compulsory for the Nikah khawan and the person conducting the marriage to ensure that the Nikah is registered. Failure to register the Nikah is an offence punishable by imprisonment for three months and a fine of PKR 100,000 (Section 5(4) of the Registration of Marriages Act).

These legal safeguards aim to ensure that the rights and interests of women are protected during the process of Nikah. By enforcing the proper reading, filling, and registration of the Nikah Nama, the law aims to promote transparency and accountability in marital contracts.

Adding more context:

Legal Note: Acts for Protection and Prevention of Women’s Rights Violations

The following acts have been enacted in Pakistan to address various forms of women’s rights violations and provide legal protection to women:

1. The Protection against Harassment of Women at Workplace Act, 2010: This act aims to prevent and protect women against harassment at the workplace. It establishes a mechanism for dealing with complaints of harassment, provides guidelines for the formation of inquiry committees, and sets out penalties for offenders.
2. The Acid Control and Acid Crime Prevention Act, 2011: Also known as the Criminal Law (Second) Amendment Act, 2011, this act specifically targets the prevention of acid crimes and imposes strict punishments for such offences. It addresses the heinous act of throwing acid on individuals, particularly women, and aims to deter and punish perpetrators.
3. The Prevention of Anti-Women Practices Act, 2011: Also referred to as the Criminal Law (Third Amendment) Act, 2011, this act focuses on combating customary practices that discriminate against women. It addresses practices such as giving a female in marriage or otherwise as a form of settlement, known as badla-e sulh, wanni, or swara. It also addresses issues related to depriving women of their inheritance rights, forced marriages, and the marriage of females with the Holy Quran.
4. The Protection of Women (Criminal Laws Amendment) Act, 2006: This act brings significant amendments to criminal laws related to the protection of women’s rights. Notably, it makes rape a criminal offence punishable by death or imprisonment for a minimum of ten years. This amendment reflects the gravity of sexual offences against women and emphasizes the need for strict legal consequences.

These acts play a crucial role in promoting and protecting women’s rights in Pakistan. By addressing workplace harassment, acid crimes, anti-women practices, and sexual offences, they aim to create a safer and more equitable society for women.

Archived from 2019

Question: My wife has a long-standing history of epilepsy and other mental and physical health conditions. Recently, her condition worsened, and her father took her back to their house for further treatment. During this time, our minor daughter remained with me, her father. However, my wife’s father, with the connivance of the local sub-inspector at the local police station, snatched my daughter from my legal custody. I have approached the police, but the Station House Officer (SHO) ignored my complaint against both my father-in-law and the sub-inspector. What should I do in this situation?

Answer: To address the unlawful custody of your minor daughter by your wife’s father and the involvement of the sub-inspector, it is recommended that you file an application against them, as well as the SHO of the police station, the State, under Section 491 of the Criminal Procedure Code of Pakistan (Cr.PC). This application will be filed in the Sessions Court of your city, seeking the recovery of the child from illegal and improper custody of the maternal grandfather.

In addition to the application under Section 491 Cr.PC for Habeas Corpus (to secure the release of the detained child), it is advisable to include a petition for the respondents to be prosecuted for illegally curtailing the liberty of the minor child. Furthermore, you may also consider registering a First Information Report (FIR) under Section 22-A. The Application under Section 22-A Cr.PC is used when the police refuse to register a criminal case or FIR. This application is submitted before an ex officio Justice of the Peace, who is a session judge or an additional session judge of the district.

Although the SHO must register a criminal case under Section 154 of Cr.PC upon receiving information of a cognizable offence, it is unfortunately not uncommon for SHOs to be influenced by financially strong parties or engage in corrupt practices in Pakistan. Hence, in this situation, the Application under Section 491 includes a prayer for an application under Section 22-A Cr.PC to be filed, ensuring appropriate legal action is taken.

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Joined Legal Queries of July 2023 also dealt with summarily on our page of Succession and Inheritance Law in Pakistan.

Can a woman in Pakistan or overseas Pakistani forced to give up her property rights in inheritance take legal action?

Section 498A prohibits the deprivation of a woman from inheriting property. This means that no one can prevent a woman from inheriting her rightful share of the property, either movable or immovable. The punishment for this offence is imprisonment for up to 10 years, a fine of up to 1 million rupees, or both.

Section 498B prohibits forced marriage. This means that no one can force a woman to marry against her will. The punishment for this offence is imprisonment for up to 7 years, a fine of up to 500,000 rupees, or both. This section also applies to the situation where there is a forced marriage to gain control of a woman’s property or to keep the property in the family.

Section 498C prohibits marriage with the Holy Quran. This means that no one can compel or arrange or facilitate the marriage of a woman with the Holy Quran. The punishment for this offence is imprisonment for up to 7 years, a fine of up to 500,000 rupees, or both. The explanation to this section clarifies that an oath by a woman on the Holy Quran to remain unmarried for the rest of her life or not to claim her share of inheritance is also considered to be marriage with the Holy Quran.

These sections are part of the Pakistan Penal Code and aim to protect women’s inheritance and property  rights. They are designed to prevent women from being deprived of their property, forced into marriage, or coerced into giving up their inheritance rights.

In Punjab Amendments to the Punjab Land Revenue Act 1967 also ensure that women are able to get their share of inheritance definitely and on time.

In order to safeguard the inheritance rights of women in Punjab, certain steps have been implemented as per the provisions of the Punjab Land Revenue Act 1967. These steps aim to ensure the fair distribution of property and the protection of women’s rights in inheritance. The key steps include:

1. Mandatory Distribution of Property: It is mandatory to distribute the property among legal heirs, including women, after the sanctioning of mutation of inheritance. This is in accordance with Section 135-A and 142-A of the Punjab Land Revenue Act 1967 (see below)
2. Documentation Requirements: The production of the National Identity Card (NIC) and Form B of the deceased, as well as all legal heirs, including women, is mandatory for the transfer of property. These documents serve as proof of identity and relationship.
3. Resolution of Disputes: If the legal heirs are unable to reach a consensus within 30 days, the revenue officer will conduct the partition of the property among the legal heirs according to the law.
4. Timely Decision: It is the responsibility of the revenue officer to decide the matter of inheritance within a period of 6 months. This ensures the timely resolution of inheritance cases.
5. Abolishment of Registration Fee: The registration fee for mutation related to the transfer of inherited property of women has been abolished. This reduces financial burdens and facilitates the transfer process.
6. District Enforcement of Inheritance Rights Committee: In order to address and redress grievances related to inheritance rights, a District Enforcement of Inheritance Rights Committee has been established in every district. This committee serves as a forum for resolving disputes and ensuring the protection of women’s rights.
7. Accountability of Revenue Staff: Revenue staff members are held accountable for any negligence in performing their duties related to inheritance matters. This encourages diligence and professionalism in handling inheritance cases.
8. Complaint Mechanism: In case of any complaint or grievances, legal heirs can approach the concerned District Collector or District Coordination Officer (DCO) for resolution and appropriate action.

These steps provide a framework for the protection of inheritance rights for women in Punjab and emphasize the importance of fair distribution and timely decision-making.

In the Punjab Land Revenue Act 1967 (XVII of 1967), the following sections have been inserted to provide provisions for partition in case of inheritance and time limits for decision of partition cases:

1. Section 135-A: Partition in case of inheritance(1) Immediately after the inheritance mutation has been sanctioned, the Revenue Officer shall serve notice on all joint land-owners of the holding to submit a scheme of private partition agreed to by all the joint land-owners within thirty days.(2) If the scheme of private partition is submitted, the Revenue Officer shall affirm the scheme in accordance with the provisions of section 147.(3) A scheme for private partition may include the site of a town or village, notwithstanding anything contained in this Act.(4) If the scheme is not filed within the stipulated time, the Revenue Officer shall commence proceedings for the partition of the joint holding.
2. Section 142-A: Time limit for decision of partition cases(1) The Revenue Officer shall decide the case of partition within a period of one hundred and eighty days from the date of application for partition or from the date of sanctioning of the mutation of inheritance.(2) If the Revenue Officer is unable to decide the case within the specified time due to reasons beyond his control, he shall submit the case, with reasons, to the District Collector for extension of the period, fifteen days prior to the expiry of that period.(3) The District Collector may grant one-time extension of time for a period not exceeding sixty days, subject to conditions, for expeditious disposal of the case.(4) If the Revenue Officer is required to decide the question of title in the partition proceedings, an additional period of one hundred and eighty days shall be deemed to have been added to the specified period.(5) Failure to decide a partition case within the specified time or contravention of any condition imposed by the District Collector may result in disciplinary action in accordance with law.
3. Time Limit for Pending Cases(1) The Revenue Officer shall decide the cases of partition pending adjudication at the commencement of this Act within one hundred and eighty days from the date of commencement.(2) The provisions of section 142-A of the Land Revenue Act 1967 (XVII of 1967) shall, as far as possible, apply to the pending cases of partition mentioned in subsection (1).

These amendments aim to streamline the process of partition in inheritance cases and establish time limits for the decision of partition cases, ensuring efficiency and timely resolution.

Query (July 2023)On what basis is NADRA refusing to take up succession and letters of administration matters in Islamabad?

The Letter of Administration and Succession Certificate Act 2020 was enacted on 13th February 2020 to establish an efficient and expeditious mechanism for the issuance of Letters of Administration and Succession Certificates. The main objective of this Act is to prevent fraud and forgery in matters related to inheritance.

According to this Act, the term “legal heir” refers to a person who is entitled to a share in the property of the deceased. The Act also defines “factual controversy” as any objection raised by legal heirs or any claimant of legal heirship, disputes regarding the establishment of the identity of legal heirs that cannot be resolved by the authority without adjudication or recording of evidence, or situations involving a Mentally Challenged, Mentally Disabled, Mentally Sick and Infirm, or Mentally Incapacitated (or as per the term used in the Succession Act 1925 ‘lunatic’ an outdated term which is not used anymore in Pakistan for mental health patients)  or a minor as one of the legal heirs. Where there is such a factual controversy the case will not be dealt with by NADRA but will need court adjudication (case to be filed at the appropriate judicial forum)

Can A mentally challenged legal heir In Pakistan apply for a Succession Certificate or Letter of Administration in Pakistan through NADRA directly?

There is a difference between a person people generally label and perceived as mentally disordered and a person declared mentally incompetent or disordered under the Mental Health Ordinance 2001 or in the case of Sindh the Mental Health Act 2013.If a person is not declared insane or proven a lunatic by the court of law or has a court appointed legal guardian to look after his property matters under section 29 of the Mental Health Ordinance then there is no legal bar to them applying for succession, unless someone raises an objection at the time of the NADRA certificate being applied for in which case a decline certificate will be issued.

Sadly in Pakistan many relatives  and family members choose not to have the mentally unfit or challenged persons property affairs entrusted to a guardian and the court of protection under the Mental Health legislation resulting in the ordinary treatment of the person at the hands of law when it comes to transfer or sale or purchase of property.As a result such a person may be exploited by his siblings, children, spouse or family members

What is the legal definition of mental incapacity in Pakistan?

The Mental Health Ordinance, 2001 of Pakistan defines the terms “mental disorder”, “mental impairment”, and “severe mental impairment”.

• Mental disorder is a broad term that includes any disorder or disability of the mind. It can be caused by a variety of factors, including genetics, brain injury, and mental illness.
• Mental impairment is a more specific term that refers to a state of arrested or incomplete development of the mind. It is typically associated with significant impairment of intelligence and social functioning.
• Severe mental impairment is the most severe form of mental impairment. It is characterized by a severe impairment of intelligence and social functioning, and is often associated with abnormally aggressive or seriously irresponsible conduct.

The explanation also states that a person cannot be diagnosed with a mental disorder simply because they engage in promiscuous or immoral conduct, sexual deviancy, or dependence on alcohol or drugs. These behaviors can be symptoms of a mental disorder, but they are not the only possible causes.

Can a mentally challenged person or guardian on his/her behalf apply for Letters of Administration or Succession Certificates in Pakistan ?

No. In this case, a Decline Certificate will be issued for referring the case to court. Mentally challenged or mentally disordered persons have the terminology ‘lunatic’ used to define them in Pakistan’s Succession Act of 1925. To answer the question of whether a lunatic or mentally challenged person can be allowed to ‘inherit’   Section 246 is about the Administration for the use and benefit of lunatics or minors. If a sole executor or a sole universal or residuary legatee, or a person who would be solely entitled to the estate of the intestate according to the rule for the distribution of intestates’ estates applicable in the case of the deceased, is a minor or lunatic, letters of administration, with or without the will annexed, as the case may be, shall be granted to the person to whom the care of his estate has been committed by the competent authority, or, if there is no such person, to such other person as the Court may think fit to appoint, for the use and benefit of the minor or lunatic until he attains majority or becomes of sound mind, as the case may be.

I am an overseas Pakistani. Can the property be purchased in my mentally incapacitated/sick /infirm /disordered wife’s name in Islamabad? If yes, please explain the procedure.

Yes,  the property can be purchased in your wife’s name using her ID card /Passport and Power of Attorney (POA) or a Court Order (see sections 29-26 of the Mental Health Ordinance 2001.  If it is within any CDA Sector they will ask for a court order or power of attorney (General) or lasting power of attorney. If it is a UK court order then it will have to be implemented through a Pakistani court under section 29 of the Mental Health Ordinance 2001. It depends on whether you are trying to purchase a property within the CDA sector or in a private society like Bahria Town etc. because all private societies have different rules for purchasers.

Can the property for the mentally disordered be purchased with a UK Court order? For the implementation of a UK Court order through the Pakistani Court, would my wife need to be present in Pakistan?

The Pakistani court order under the Mental Health Act 2001 (or  in case of Karachi the Mental Health Act 2013) is necessary. The wife may be asked to appear on video once the court is made aware of her vulnerable  position and/or inability to travel.

Connected Question Can the property be purchased in my mentally incapacitated/sick /infirm /disordered wife’s name in Karachi?

The Sindh Mental Health Act, 2013 is a special Act made to deal with and regulate the special situations and cases of mentally disordered persons concerning their care, treatment, and management of their property.

Would my mentally disordered/infirm overseas wife need to be physically present in Pakistan to complete the purchase of property process?

You will (if you are appointed as the guardian) allow need court permission to buy property on behalf of the wife the Court of Protection under the Mental Health legislation can enforce attendance of the wife. If she is presently out of the country does not oust or drive out the jurisdiction of the court of protection which can enforce her attendance to check on her current health and welfare. The plaintiff may also apply to the court of protection for the appointment of any person on his expense who may visit the mentally disabled person and report his mental state to the court. The court of protection may also serve the mentally disordered person through Pakistan Embassy including the person in whose care the alleged mentally disordered person is said to be.

In the future, if I needed to sell my wife’s property to meet her care needs – what would be the sale process? Would my wife need to be present in Pakistan? Would we require Court approval regarding this?

Yes, you will need court approval. Refer to sections 29 to 36 of the Mental Health Ordinance 2001.The court can require her to be present.Every sale will require court approval.

Would the Pakistani Court of Protection accept UK/Overseas medical reports such as Neurology, Capacity Assessment, etc. on my wife’s condition?

Yes, if the need be courts do acknowledge such reports, but the reports must be verifiable through the Pakistani embassy or the court may order for the reports to be endorsed by a local government hospital.

If the property is purchased in my wife’s name. As mentioned previously, my wife lacks capacity and is unable to sign any document. Would the purchase process be complete without her signature? If not, who can sign on her behalf?

If your wife is mentally sound but physically incapable then her consent to give POA to you shall be sufficient to buy/sell property on her behalf.

In case she is mentally unsound then you have to get yourself appointed a Guardian by the court and do transactions on her behalf (signing them too, of course).

Can a mentally infirm, sick or disabled person who inherits or owns property be prevented from selling/alienating the properly to his own detriment ? (Property Ownership and Inheritance for Mentally Infirm or Disabled Persons)

General advice, if your mentally ill, sick or infirm parent or sibling or spouse is doing such things as trying to sell, transfer or gift property or even buy property they may be in a vulnerable position and be at a high risk of being defrauded.You may have to take legal action to halt or stop an ongoing transaction in which case you will need specific legal advice from our team and also the co-operation of a good psychiatric doctor, even before you file for their Guardianship or Management of property matters through the Court of Protection.

In Pakistan, the Mental Health Ordinance 2001 addresses the rights and management of mentally disordered persons, including their property and affairs. Specifically, Chapter V, Section 29 of the ordinance pertains to judicial proceedings for the appointment of a guardian of person and manager of the property of mentally disordered individuals.

Section 29 of the Mental Health Ordinance 2001 states that when a person is alleged to be mentally disordered and incapable of managing themselves, their property, and their affairs, the Court of Protection within their jurisdiction, upon application by their relatives with the written consent of the Advocate General of the relevant province, may order an inquiry to ascertain their mental condition and capacity to manage their property.

To obtain consent from the office of the Advocate General under Section 29 of the Mental Health Ordinance 2001, certain documents and information are required. These include:

1. Medical Certificate: A certificate issued by the Psychiatry Ward Medical Board of a government hospital, District Hospital’s Medical Superintendent, or Mental Hospital, specifying the nature of the mental disorder and bearing identification of the patient. Certificates from private doctors or private hospitals are not accepted.
2. List of Nearest Relatives: A list of the patient’s nearest relatives, along with their relationship to the patient and copies of their national identity cards (NIC).
3. Affidavits: Affidavits from at least two relatives of the patient who are not related by blood, neighbors, or independent persons, stating their connection with the patient.
4. Details of the Patient’s Properties: Information regarding the patient’s properties.
5. Original Application for Appointment of Guardian: The original application to be filed in the court, seeking the appointment of a guardian for the mentally disordered person.
6. Certificate from the Concerned Union Council: A certificate from the Union Council where the patient resides, affirming the authenticity of their location.
7. Death Certificates of Parents (if applicable).

By following the procedures outlined in the Mental Health Ordinance 2001 and submitting the required documents, relatives of mentally disordered individuals can seek legal permission for the management of the patient’s property and other related matters. The consent granted by the office of the Advocate General allows them to file a case in the district court and pursue the appointment of a guardian.

A person as the manager of the property of the mentally  disordered person can file for an application  under Section 36 of the Mental Health Ordinance before the  Court of Protection seeking permission to sell the suit property. One common ground for seeking permission by the manager can be that the suit property being barren land/vacant plot does not produce any yield or generate any income which can be utilized to meet and fulfil the financial needs of the mentally ill person. It can be prayed that the permission to sell the suit property may be granted so that some other property such as shop, yielding rent, can be purchased enabling the appellant to use such income for meeting with the needs of the ward.

For context :

Section 29, relates to ‘Judicial Proceedings for Appointment of Guardian of Person and Manager of the Property of the Mentally Disordered’

Joined queries originating from several NGO’s on women’s rights to property in Pakistan (2018)

Legal Advice Note:

The laws governing women’s property rights in Pakistan are designed to ensure equal rights for both men and women. Detailed responses provided via several pro-bono legal opinions.Here is an overview of the relevant laws and their provisions:

1. Constitutional Protection: The Constitution of Pakistan, specifically Article 23, guarantees the right to acquire, hold, and dispose of property for all citizens, without any gender-based discrimination. Article 24 further protects property rights and prohibits compulsory deprivation of property except in accordance with the law.
2. Dissolution of Muslim Marriages Act, 1939: According to this Act, a wife is entitled to her own property and can also benefit from the property of her husband. If a wife seeks dissolution of marriage (Khula), she is not entitled to dower. Upon dissolution of marriage, the husband does not have any right to his wife’s property.
3. Married Women’s Property Act, 1874: This Act grants married women the right to separate property and the ability to initiate legal proceedings in their own name. A married woman is also responsible for her contracts related to her property.
4. Muslim Family Laws Ordinance, 1961, and Muslim Personal Law Shariat Application Act, 1962: These laws govern inheritance of property, including agricultural land, based on the principles outlined in the Quran. They ensure fair distribution of property among heirs in accordance with Islamic inheritance laws.

Regarding the formula for property rights under Islamic inheritance laws, it is important to note that shares are determined based on the closeness of the relation to the deceased. The specific shares may also differ based on whether a person belongs to the Sunni or Shia sect.

Query from 2019

Question: My brother gave a special power of attorney (POA) to his brother-in-law to obtain a succession certificate for our deceased mother’s bank account. However, the brother-in-law fraudulently claimed that he needed POAs from all the heirs to proceed with the succession process and then embezzled the entire funds (approximately 29 lakh) using the succession order granted by the court. I have recently discovered this situation as an overseas Pakistani. What can I do to recover my mother’s inheritance from this person who committed fraud?

Legal Advice Note: Recourse for Recovery of Deceased Mother’s Inheritance

In this situation, we recommend taking the following steps:

1. Lodge a Complaint: Submit a complaint through the Prime Minister’s Portal and the Overseas Pakistanis Portal to report the fraudulent actions and seek assistance. It is important to provide all relevant details and supporting documents while filing the complaint.
2. Consider Legal Action: Pursue legal action based on fraud. An FIR (First Information Report) can be filed against the brother-in-law for his fraudulent activities. It is essential to gather evidence supporting your claim to prepare a strong case.
3. Sibling Unity: It is crucial that all siblings, including your brother, are in agreement regarding the fraudulent conduct of the brother-in-law. Their cooperation and support will strengthen your claim for recovery of the embezzled funds.
4. Time Lapse: The significant time lapse of six years since the incident may present challenges in initiating criminal proceedings. It is important to review all relevant documentation and evidence to assess the strength of your case. You may consult with a legal professional from our firm Josh and Mak International who can guide you through the process and evaluate the impact of the time lapse on your claim.
5. Obtain Court Proceedings: Request a copy of the court proceedings related to the matter, including information about the court and city where the case was adjudicated. This will help in gathering essential evidence for further legal proceedings.
6. Solidify Your Claim: Collect all available evidence that supports your claim, such as statements from the bank regarding the release of funds to the brother-in-law based on the court order. Build a strong file of supporting documents and evidence that corroborate your allegations of fraud.
7. Criminal and Civil Proceedings: Once you have gathered all necessary evidence, you can initiate both criminal and civil proceedings against the brother-in-law.
8. Recovery of Funds and Damages: In addition to the recovery of embezzled funds, consider claiming damages for breach of trust and interest owed as a result of the brother-in-law’s actions as a POA holder. Your legal representative can assist in drafting the necessary claims and quantifying the damages.
9. Asset Identification: In the event that a judgment is obtained in your favor, discreetly compile a list of the brother-in-law’s assets that can potentially be attached for debt enforcement purposes. This will facilitate the recovery process and increase the chances of obtaining the rightful amount.

Please note that the advice provided here is based on the information provided in your initial query.

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Queries from 2018: Response to Joined Requests from the Overseas Pakistanis in UK on Enforcing Foreign Judgments

Main Questions 

1. How easy or difficult is it for someone from the UK to enforce foreign Judgements in Pakistan;
2. Could you please guide us about the procedure and the rules applied when foreign judgment enforcement proceedings are commenced in Pakistan.
3. Does the success depend on the losing party/defendant  in cooperating with the court? What is the position if the party  fails to cooperate?
4. How easy is it trace debtors assets in Pakistan to  be able to enforce the judgment?
5. How long does this procedure take from start to finish?
6. What happens if assets cannot be traced and the defendant fails to appear in court and/or refuses to corporate?
7. Please comment on the recent application from the UK where  the English Cricket Board tried to enforce costs orders  in Sindh  against Pakistan cricketers but failed.
8. Comment on chances of success in enforcing  UK costs order  in percentage terms given the ease in which people can be manipulated in Pakistan  either to do or not to do something.

Enforcing foreign judgments in Pakistan, particularly in relation to costs, can be a complex and time-consuming process with uncertain outcomes. It is important to note that the defending party in Pakistan has the ability to evade compliance with court orders, either by leaving the country for an extended period or by simply refusing to acknowledge the court summons. Unscrupulous lawyers in Pakistan who make a living off procedural abuse often advise their clients to ignore the summons, resulting in significant delays of approximately 2-3 years. Just when an ex-parte judgment is imminent or has been delivered, the defending party may suddenly appear in court, present excuses, and contest the award. This can lead to an additional three years of court proceedings, further prolonging the enforcement process.

During this prolonged period, the defending party may take evasive actions such as transferring their properties to family members or a spouse, leaving little or no assets to attach. Given the depreciation of the value of money over time and the overall functioning of the Pakistani justice system, it is unlikely that the enforcement of the foreign judgment will yield the desired results for the applicant. Moreover, there is a possibility that the basis of the foreign order itself may be challenged in the Pakistani courts to frustrate due process, further complicating matters, particularly for foreign-based applicants who may face challenges in attending every hearing and providing timely instructions to their counsel.

While there is provision under Order 21 Rule 37 CPC for the arrest of the defaulter in case of non-cooperation, it is important to note that such arrests are rare and may not always result in a satisfactory resolution. A notable example is the case of England & Wales Cricket Board v. Danish Kaneria, which has been pending in court since 2015 without any arrests being ordered, thus remaining unresolved.

Enforcing foreign judgments in Pakistan, especially from the UK as a reciprocating state, depends on the specific circumstances of each case. If the judgment has been obtained ex parte, the reciprocating court may be hesitant to enforce such an order. The procedure for filing a case for the enforcement of a foreign judgment requires the submission of certified copies of the judgment to the court, initiating the process of summoning and notifying the defendant. However, there are loopholes in the procedure that can allow the defendant to exploit the system and cause delays for both the court and the applicant.

The enforcement proceedings for foreign judgments in Pakistan are governed by Section 13 and Section 44A of the Code of Civil Procedure 1908. These provisions state that a certified copy of a decree from the superior courts of the United Kingdom or any reciprocating territory can be executed in Pakistan as if it were passed by the relevant district or high court, depending on the nature of the execution order.

Does the success of enforcing a judgment depend on the losing party/defendant cooperating with the court? What happens if the party fails to cooperate?

While the cooperation of the losing party/defendant is crucial for the success of enforcing a judgment, it is still possible to proceed with enforcement even if the paying party does not cooperate. In such cases, the enforcement can be pursued ex parte, meaning without the participation of the non-cooperative party. However, it is important to note that in Pakistan, determining the ownership of assets can be challenging. High-profile individuals often conceal their assets through various means such as offshore companies, third-party accounts, and transferring assets to relatives. In the Danish Kaneria case mentioned earlier, the plaintiff identified six bank accounts in the claim, but it is uncertain whether these accounts hold any funds. Tangible assets like cars, which may have a value of approximately 9,000 GBP, can be difficult to attach and recover.

One potentially useful provision in such cases is the possibility of ordering the arrest of the defaulter under Order 21 Rule 37 of the Code of Civil Procedure (CPC). However, it is important to note that despite the availability of this provision, the Danish Kaneria case has been pending in court since 2015 without any arrests or payment being made.

How easy is it to trace the debtor’s assets in Pakistan for the purpose of enforcing the judgment? If the debtor’s assets are not known, tracing can be very challenging. In such situations, the court may order newspaper advertisements and involve investigation authorities such as the Federal Investigation Agency (FIA) to assist in locating the debtor’s assets. Before initiating a lawsuit, it may be a prudent strategy to consult with a legal advisor in Pakistan who can provide asset tracing services. Such services can involve tapping into the tax records of the defaulter, although it should be noted that individuals in Pakistan often provide false information on their tax records. However, recent actions by tax authorities, particularly in political matters, are bringing about a change in this trend.

Tracing assets in Pakistan can be further complicated by the practice of individuals purchasing property in the names of their children and spouses, making asset tracing a challenging and potentially futile exercise.

The delay in enforcement of a judgment is variable and cannot be guaranteed within a specific time frame. It can take months or even years to enforce a judgment. As seen in the Danish Kaneria case, which has been pending for three years, cases where the defendant deliberately avoids compliance can result in prolonged enforcement processes lasting 3-5 years or even longer in some instances.

Further context

The provisions of the Civil Procedure Code (CPC) that govern the execution of foreign decrees in Pakistan are Section 44-A and Section 13 of the CPC. Section 44-A states that a certified copy of a decree from a superior court in the United Kingdom or any reciprocating territory can be executed in Pakistan as if it had been passed by the District Court. The decree must be accompanied by a certificate from the superior court indicating the extent of satisfaction or adjustment of the decree. Section 47 of the CPC applies to the execution proceedings, and the District Court may refuse execution if the decree falls within the exceptions specified in clauses (a) to (f) of Section 13.

It is important to note that “superior courts” refer to specific courts in the United Kingdom, and “reciprocating territory” includes countries or territories designated by the Federal Government through notification in the Official Gazette. A “decree” from a superior court refers to any decree or judgment that entails the payment of a sum of money, excluding sums related to taxes, charges, fines, penalties, or arbitration awards.

In practice, enforcing foreign judgments in Pakistan, particularly costs orders, can be challenging. It is essential to consider the following:

1. Security of Costs Application: Due to the potential costs and inconvenience that the claim may impose on the defendants, it is advisable to seek a security of costs application. This ensures that the claimant bears the responsibility for costs and inconvenience if they do not succeed in the case. It is crucial to establish this security in advance to protect the defendants’ interests.
2. Loopholes in Pakistani Law: The enforcement of costs orders in Pakistan can be frustrating, as claimants may exploit loopholes in the legal system to evade their financial obligations. To mitigate this risk, it is important to demonstrate the claimant’s capability to pay costs in advance.
3. Professional Legal Representation: Engaging competent legal counsel experienced in international enforcement matters is vital for navigating the complexities of enforcing foreign judgments in Pakistan. They can guide you through the process, help identify potential challenges, and take appropriate legal actions to protect your interests.
4. Timely Legal Advice: Seeking timely legal advice, particularly in relation to security of costs and enforcement strategies, is crucial for a successful outcome.

While enforcing foreign judgments, including costs orders, in Pakistan can be challenging, taking proactive measures such as seeking a security of costs application and obtaining expert legal representation can help safeguard your interests. It is crucial to remain aware of the potential difficulties and seek professional advice to navigate the enforcement process effectively.

Querents were given detailed legal opinions individually based on their specific circumstances requiring enforcement of judgements in Pakistan.

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Query from 2019

I am overseas (country redacted).My husband and his mother along with our three minor daughters (3y,2y,1y old) flew away to Pakistan without informing me three months ago, we were living a miserable life together.  I am still trying to contact him and his family to solve the issue and let me come to them but they aren’t allowing .I cannot travel as I am stuck due to Covid19’s ban on travelling. What can I do legally to have him and the kids back?

Querent was asked whether she had contacted the local Pakistani embassy in the overseas location (country) she was in. She replied that there was zero co-operation by the Embassy.

A non-legal message for people opting for Divorce/Khula in the Pakistani society.

In 2015 alone we received 100 queries on khula and divorce in Pakistan.

On a non-legal note, I want to address the prevalent issues surrounding divorce, khula, and child custody in Pakistan. While I have tried to avoid being labeled as a ‘family law practitioner’ or a hardcore feminist, I believe it is essential to guide people correctly in these matters. Divorce should never be the first resort, especially when children are involved. I base these insights on my legal experience and observations in the hope of saving marriages and fostering healthier relationships.

1. Love Marriages and Social Approval: Love marriages in Pakistan often result in a lifelong struggle for social approval from families. Forgiveness may come reluctantly, but the relationship is often damaged. It is crucial for both parties to consider the consequences and think twice before marrying against their parents’ wishes. Likewise, parents should listen to their children’s desires and not dismiss them based on immaturity.
2. Arranged Marriages and Responsibility: In arranged marriages, individuals should understand that they are responsible for how they conduct the marriage, regardless of their parents’ involvement. A spouse brought into one’s life by parental approval still deserves love, time, and approval from their partner.
3. Economic Interests and Family Peace: Parents with economic interests tied to their child may resist the idea of their son or daughter’s partner, as it threatens their financial security. This selfish approach can lead to interference and attempts to disrupt family peace. It is crucial to recognize this risk when financially supporting relatives and to encourage independence.
4. Living Arrangements and Emotional Blackmail: Forcing sons and daughters to live with parents through emotional blackmail is selfish, except in exceptional circumstances. Living arrangements should be based on mutual understanding and respect. Supporting parents in their daily chores by hiring assistance can be a practical solution.
5. Respecting Differences: Parents should refrain from nagging or criticizing their son-in-law or daughter-in-law based on religious, ethnic, or appearance differences. Respecting a person’s manners and standing in your child’s life is essential. Toxicity should not be allowed in family dynamics.
6. Understanding Perspectives: Husbands need to understand and appreciate their wife’s contribution, regardless of who is the primary provider. Mockery from others about being too nice or respectful is not in their best interest. Mutual respect and support are key.
7. Respecting Motherhood: Husbands should not judge or belittle their wife’s role as a stay-at-home mom. The effort put into household chores and managing the household should be acknowledged and appreciated. Encouragement and support can go a long way.
8. Unconditional Love: Mothers will always see their children as victims of a bad marriage, regardless of the actual situation. Similarly, men tend to be suspicious of any man who marries their daughter. Recognizing this inherent nature of parents can help navigate challenging situations.
9. Avoiding Toxic Interference: It is important to discourage mothers and sisters from over-criticizing a wife’s culinary or parenting skills. Sisters, as guests in the house, should not disrupt family peace. Each person’s happiness and harmony within their family should be respected.

Marriage is a lifelong commitment, and divorce should not be taken lightly. We need to contribute to a strong community of mentally healthy Muslim children. By fostering dignity, respect, and open communication, we can build healthier relationships and save marriages. It is time to prioritize human connections over social media and materialistic concerns.

May Allah bless all those who read this post and guide them towards nurturing and preserving their marriages.

Your friend and well wisher

Sincerely

Barrister Aemen Zulfikar Maluka 

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Query from 2018

Hello, I hope everything is going well. I have a query regarding PPRA Rule 39. According to Rule 39(i), bidders are required to deposit a performance security in the form of a pay order, demand draft, or bank guarantee, not exceeding 10% of the contract price. However, some bidders are requesting that their performance security be deducted from their payment. Is it acceptable for the organization to deduct the performance amount from the payment?

Answer:

Thank you for reaching out to us with your query. Regarding your question, it is important to note that the performance guarantee, as per PPRA Rule 39, is to be provided by the procuring agency to the lowest evaluated and successful bidder. It should not be adjusted or deducted from the payment or running bills, as it serves as a separate assurance of the bidder’s performance. The performance security serves as a safeguard for the procuring agency and ensures that the bidder fulfills their contractual obligations. Therefore, it is not acceptable for the organization to deduct the performance amount from the payment.

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Query from 2016

I have recently signed a contract in Pakistan (Lahore) and made advance payments. However, I am now wondering if I can recover those advance payments. The contract had standard terms, and I may have overlooked the small print. Can I pursue the recovery of these payments?

Answer:

The ability to recover advance payments depends on the nature of the payments and the terms of the contract. If the payments were made as a deposit to guarantee performance, it is unlikely that they can be recovered. Typically, deposits are offset against any damages awarded to the innocent party and are not refundable. It is crucial to exercise caution when dealing with deposits to avoid them being construed as penalty clauses, which may be unenforceable. However, if the party making the advance payment has a lien on it, there may be a possibility of recovery.

On the other hand, if the advance payment is not a deposit but a payment in advance for part or all of the price, the party in breach may be able to recover it, subject to any claims for damages made by the innocent party.

Recovering advance payments is typically limited to cases of complete failure of consideration, which is a remedy known as “quasi-contractual.” If there is only a partial failure of consideration, this remedy may not be available.

Please send us a copy of the contract so we can advise you more specifically on your options.It is important to carefully review the contract for any procedural requirements, such as notice periods or provisions for the assessment of liquidated damages. Failure to comply with these provisions may impact the recovery of damages. If the assessment of damages within a specified period is not carried out, the defendant may not be liable to pay any damages.

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(2017) Query

Fathers Second Marriage; our father recently married another woman and has banished us to live with our maternal Uncle.

He says that he will carry out our education duties but he has broken our trust many times. Can we make him sign a contract in this regard?

Advice

(2019) Legal Cautionary Note: Relying on ready made templates for NDAs in Pakistan

Lately there has been an influx of queries from both sides at our firm about non-compete clauses which have been glorified due to their promise of protecting large multinational companies against competition from ex-employees who would know valuable trade-secrets or against current employees considering the greener grass fields shown by a rival company hoping the gain valuable information about your business.

In recent times, our firm has received numerous queries regarding non-compete clauses, which have gained popularity for their potential to protect multinational companies from competition by former employees with valuable trade secrets or current employees considering opportunities with rival companies to gain insider knowledge.

During my practice, I have come across extensive corporate paperwork that often lacks enforceability in court when a breach of the non-compete agreement is alleged. For instance, in a recent arbitration case, it was highlighted that the clause or agreement lacked consideration. Why should an employee, who has been paid minimal wages for years, be bound by a non-compete contract signed as part of an HR practice two years later? This is especially relevant when the time of contract signing does not align. To address this, it is advisable to either incorporate the non-compete clause into the original employment contract or, if additional documents are introduced solely for non-compete purposes, consider offering a bonus or benefit to employees signing such agreements. The crucial legal test in this context is whether a material benefit was provided in exchange for signing the non-compete agreement.

Furthermore, for a non-compete clause to be valid in court, it must demonstrate the protection of legitimate and critical business interests or proprietary trade secrets. Many cases that require our mediation or legal intervention involve medical practices, schools, tuition centers, and beauty salons, where employees leave with their clientele. While it is the establishment’s responsibility to maintain credibility and retain clients, enforcing anti-compete clauses in such situations would require evidence of active solicitation leading to financial harm to the employing establishment.

This brings us to the importance of setting realistic and reasonable demands in a non-compete clause without excessively burdening an employee’s ability to earn a living in the same field of expertise. If a court perceives you or your organization as deliberately impeding honest competition, it may be challenging to establish a legitimate business interest.

Issues also arise when considering the scope, duration, and geography of non-compete agreements. Geography remains a contentious factor, particularly in online or software-based jobs. In the case of software developers, where geographical boundaries may not apply to employers like Google and Yahoo, enforcing non-compete agreements becomes problematic.

Our ultimate advice is to avoid using or signing standard non-compete agreements or templates unless you are unable to afford credible legal advice or are pressed for time. Each business has unique characteristics, commercial reach, and resulting business interests. A well-drafted non-compete agreement tailored to your specific circumstances can make a significant difference in establishing your business as a leader in the future.

Please note that this cautionary note is intended for general information purposes only and does not constitute legal advice.

Query on Pollution Mafia:

A certain mafia in my locality is criminally spraying pollutants and drugs on the roads in heavy traffic to cause accidents. Upon my complaint, state authorities in Pakistan are unable to do anything due to the lack of proper expertise. Please advise me of my legal options as I have been observing this since 2007 and am able to identify their place and the toxins involved. 

Our Advice:

We understand your concern and the seriousness of the situation. It is important to take appropriate action to address this issue. Here are some steps you can consider:

1. Collect Evidence: Start collecting video evidence of the pollution activities and incidents. Document the dates, times, and locations of the incidents as well as any identifiable information about the individuals involved.
2. Report to Authorities: File a formal complaint with the local police, providing them with the collected evidence. Additionally, you can report the matter to relevant environmental authorities or agencies in your area.
3. Engage Media Channels: Contact local media channels or journalists to bring attention to the issue. Sharing your evidence and story with them can help raise awareness and put pressure on the authorities to take action.
4. Public Interest/Class Action Lawsuit: If there is a significant number of affected individuals, you may explore the possibility of initiating a public interest or class action lawsuit. Consult with a lawyer experienced in environmental law to understand the legal requirements and feasibility of such a lawsuit.
5. Personal Safety: If you fear for your safety, it is important to take precautions. Consider reaching out to a journalist or news agency that can investigate the matter while protecting your anonymity.

Please note that the advice provided is general in nature and consulting with a lawyer who specializes in environmental law would be beneficial for a more specific and comprehensive understanding of your legal options.

Our daily online queries are republished with anonymity to help the general public. If you have a similar query, please feel free to contact us at aemen@joshandmak.com.

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Query (2015)

I am selling my property to a friend in a foreign country. Both of us are current residents in different foreign countries. Can you guide us on the procedure so that we don’t have to visit Pakistan, as our jobs don’t allow us to take leave?

Answer:

The possibility of completing the property transfer while you are abroad depends on the land authority responsible for your property and your willingness to appoint a power of attorney to handle the transaction on your behalf.

At Josh and Mak International, we provide conveyancing services and can assist you with the process. Please send us an email at aemen@joshandmak.com with details about the location of the property, and we will be happy to help.

Additionally, please let us know if both you and your friend are dual nationals, including Pakistani citizenship. This information will help us provide accurate guidance tailored to your specific situation.

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Joined Queries on Taxes on property from 2019

Question (1): There is confusion in the market, and different individuals are providing conflicting advice regarding the payment of capital gain tax at the time of property registration. What is the legal position?

Answer: The legal position is that capital gain tax, as per section 37(1A), is imposed on the difference between the sale price and purchase price of the property. However, the registration authorities are not authorized to collect capital gain tax on immovable property. Instead, they are authorized to collect advance tax under Section 236C from the seller and advance tax under Section 236K from the buyer. Therefore, the taxpayer is responsible for paying the capital gain tax on the sale of immovable property when filing their income tax return. For example, if a property is sold in the financial year from July 2016 to June 2017, the taxpayer must pay the capital gain tax while filing the income tax return for the tax year 2017, taking into account the advance tax paid under section 236C.

Question (2): My property is located in an area for which the Federal Board of Revenue (FBR) has not notified the value of immovable property. I intend to sell my property immediately, but the registration authority is reluctant to transfer the property without waiting for the FBR to notify the valuation. What is the FBR’s position on whether I should wait for the valuation table to be notified?

FBR’s notification of valuation applies only to the areas that are specifically mentioned in the notification. For areas that have not yet been notified, the value will be determined by the District Officer Revenue or the provincial or any other authorized authority for the purpose of stamp duty.

Question (3) : I have received 90% of the sales consideration for my property before June 2016, and the remaining 10% is due in August 2016 when my property will be registered. Should I pay taxes on my property based on the FBR valuation in August 2016?

Answer: The FBR valuation applies to all transfers of immovable properties from July 31, 2016, at the time of registration, regardless of when the payment was received for the sale of the property. In your case, the FBR valuation will be used to determine the advance tax payment under section 236C, as you are the seller of the property. Additionally, capital gain tax under section 37(1A) will also be applicable based on the valuation determined by the FBR. Any income from capital gain should be declared in the income tax return for the tax year 2017.

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Query from 2022

Hello, I am an overseas (non-resident) Pakistani trying to obtain a property transfer letter/deed of ownership for a property I jointly own in Islamabad – any advice?

We can help you if you clarify which land authority or housing authority your property comes under. Majority of the property in Islamabad is under the administration of CDA (Capital Development Authority).

Also, do you mean that you have no record (receipt or joint-purchase agreement or inheritance document) of the property belonging to you?Have you tried asking the co-owner to share the documents with you?

The correct terminology for the document you are looking for is an allotment letter in Islamabad.

A little more information will allow us to advise you better.

Where can I find out about a society’s legal status on my own in Islamabad?

You can visit the DC Property Verification Center at the Citizen Facilitation Center in Islamabad, located in Mauve Area G 11/4. By filling out a query form, you can obtain confirmation from the Capital Development Authority (CDA) and Capital Administration about the legal status of a society where you intend to purchase land. Please note that this service was introduced in 2021, and we have not yet received feedback from clients or individuals who have utilized it. If you have firsthand experience with this service, we encourage you to share it with us, as it would assist us in providing better guidance to others seeking information.

At our firm, we conduct comprehensive due diligence on properties and societies for our clients. This includes examining the financial history, legal validity, reputation, and compliance with administrative laws of the society in question. While some societies may have initial approval, they might be facing underlying financial challenges and cash flow issues. If you desire, you have the option to undergo a thorough legal due diligence process for a society in which you plan to invest your life savings.

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Question from 2019

 As a dependent of a ‘Shaheed’, I was allotted a plot and I possess a certified official copy of the allotment order. Will there be any tax payable on the sale of this plot?

Answer: No, there will be no advance tax imposed under Section 236C at the time of property registration. Additionally, no capital gain tax will be applicable under section 37(1A) of the Income Tax Ordinance.

Connected query: Relationship of 7E and

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An archive from 2019, non-legal advice to Pakistani parents wishing to marry off their daughters abroad.

Dear Pakistani Mothers, Fathers, and Guardians of Daughters,

We understand the deep-rooted desire to find a suitable match for your daughters and secure a prosperous future for them. However, it is crucial to address certain misconceptions and priorities that may negatively impact their lives. Our observations shed light on the concerns surrounding marriages with British Pakistani partners and the implications for Pakistani families.

It is disheartening to witness daughters and sisters return from the UK with broken marriages, having endured abuse and emotional trauma. We have heard stories from five women who were married to British Pakistani citizens, all sharing the common themes of abuse, emotional damage, and uncertain futures within Pakistani society.

While some Pakistani parents may perceive a UK passport as a pathway to luxury and prosperity for their daughters, it is essential to manage expectations. This false notion often leads families to accumulate debt in the hope that their daughter’s marriage will pave the way for the entire family to settle abroad.

On the other hand, many British Pakistani families face economic challenges, living within budget constraints and striving for survival in an inflating UK economy. Having interacted with these families during my time in the UK, I witnessed their dedication to preserving cultural traditions from the homeland while facing the realities of a different society. Many struggle to afford even the most basic expenses while residing in the suburbs or poorer neighborhoods.

What is particularly troubling is the sense of entitlement and high expectations prevalent among certain individuals within the British Pakistani community. Some aspire to marry their sons into financially well-off families in Pakistan, despite residing in the UK on social welfare. The incongruity between their living conditions and their expectations is concerning.

I recall an encounter with an elderly woman who wished to arrange her son’s marriage with her affluent brother’s daughter in Pakistan. She resided in a small house in East London, pointing to a cramped storage room as the future residence for the newlywed couple. It was evident that the niece, accustomed to grand mansions in Pakistan, would find such living conditions suffocating. The elderly woman expressed hopes that her brother would replace her furniture as a gesture of privilege for allowing her daughter to marry her son, who possessed a British passport. Not surprisingly, the lavish marriage in Pakistan ended in divorce within a few months. Subsequently, the woman arranged for her poor sister’s daughter to serve as her daughter-in-law, resulting in yet another failed marriage marred by allegations of abuse and a disabled child due to domestic violence.

This stark disparity in expectations leads to increased depression and abandonment of children resulting from broken marriages.

Legal issues arise when marriages are not registered in the UK as civil marriages. It is disappointing to see that, despite being champions of human rights, London or UK police often overlook domestic violence, rape, and other criminal activities within Asian immigrant communities. Consequently, marriages registered solely in Pakistan necessitate the nullification process to occur in Pakistan, leaving the groom without actionable financial accountability.

Considering these challenges, I implore Pakistani parents to reconsider their choices and safeguard their daughters’ well-being. Sending your daughter to a foreign land where you are unfamiliar with the people and the environment poses significant risks. Even close family members living abroad may not be fully known to you due to the physical distance and cultural differences. Entrusting your daughter’s future to a stranger, without conducting proper due diligence, is an unnecessary gamble.

The allure of a foreign passport should not outweigh your daughter’s happiness and stability. Instead of paying large sums in dowry, consider investing in her education and overall well-being. Financially compensating the groom will not guarantee your daughter’s happiness or stability. It only perpetuates societal greed and exploitation of parents by individuals who prey on vulnerable families.

If marrying your daughter abroad is unavoidable due to the appeal of a foreign passport, ensure you use the allocated dowry funds to visit the UK before the marriage. This will enable you to verify the groom’s claimed settled life and assess the living conditions your daughter will encounter. Remember, you provided your daughter with a nurturing childhood—do not subject her to a life of uncertainty and distress solely because the label “British Passport Holder” carries an allure. Give your child the life she desires, guided by the principles and freedom granted by Allah.

Lastly, I urge British Pakistani parents to recognize that a daughter-in-law is akin to a daughter. It is essential to respect her and acknowledge her decision to embrace your son despite his flaws. She is not a housemaid, chattel, or slave to be subjected to mistreatment. By teaching your son to respect women, you pave the way for the happiness and well-being of future generations.

Before seeking a daughter-in-law from a respectable family, evaluate your own living conditions in the UK and consider the circumstances of the prospective girl’s family. Put yourself in their shoes and reflect on how you would feel if your daughter were to face similar budgetary constraints and emotional distress. This moment of revelation may lead to a profound change in perspective.

At Josh and Mak International, we are dedicated to providing legal guidance and support. If you require assistance or counseling on family matters, we are here to help. Let us work together to create a society where our children thrive and flourish.

Sincerely

Your good friend and well-wisher,

Barrister Aemen Zulfikar Maluka

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July 2023

I am abroad and I have lost my nikahnama, what should I do?

The ‘Nikah Nama’ (marriage contract) holds significant legal value as it serves as an official record validating the solemnization of marriage between a couple. According to the Muslim Family Regulation Statute 1961, it is mandatory to register the Nikah Nama with the local Union Council. One original copy of the Nikah Nama is retained as a public record, while two additional copies are provided to the bride and groom.

In the event that you have misplaced your Nikah Nama or require a copy/duplicate of the Marriage Certificate, the recommended course of action is to contact the relevant Union Council where the marriage was registered. By applying for a certified and verified copy of the Nikah Nama from the concerned Union Council, you can obtain the required documentation.

If you are in Islamabad, our firm may be able to help if you still have an electronic copy of your original nikahnama and/or remember which Union Council it was where your marriage was registered.

Query from 2023 on full custody of child after escape from an abusive marriage. The querent, a mother, seeks full custody of her daughter. The father, a foreign national and Muslim, is currently residing abroad. The mother escaped from an abusive relationship, suffering severe physical and mental harm, and fled to Pakistan. The child is currently living with the mother, and the father is not providing any child support. The divorce was concluded abroad but registered in Pakistan. The father is mentally infirm and is not a national of Pakistan.

Advice:

1. Start with a Legal Notice: The querent is advised to begin the process by sending a legal notice to the father, informing him of the intention to seek custody and requesting his response.
2. File for Ex-Parte Proceedings: After sending the legal notice, the querent should file for an ex-parte proceeding with the court, seeking custody of the child. It is essential to highlight the father’s mental condition and request that the case be decided exparte as soon as possible.
3. Investigate Father’s Assets: The querent is advised to investigate the father’s assets in the overseas country, as there may be a possible lawsuit for child support.
4. Proper Documentation Required: To substantiate the father’s mental illness and abusive personality, it is recommended to obtain a proper doctor’s assessment or court order from the overseas country, demonstrating substantial evidence of his unfitness as a parent.
5. Current Address of the Father: It is crucial to have the current address of the father abroad for issuing court summons. If the father does not respond to the summons, custody may be granted to the mother in an ex-parte decision.
6. Appearance in Court: Due to a bad financial  situation querent may appear in person as the petitioner. She is advised to be honest and provide detailed explanations of the circumstances surrounding the divorce and the escape from the abusive relationship. Present all evidence of neglect and the father’s mental illness, along with the mother’s independent support for the child.
7. Sympathy towards Single Mothers: Judges in Pakistan are generally sympathetic to single mothers with limited financial resources. Representing oneself in court is acceptable, and hiring a lawyer is not mandatory.

Joined queries from July 2023 (Dishonored Cheques in Pakistan)

There have been quite  a few queries on how the law relating to dishonoured cheques works in Pakistan (especially in the property and services sector of Pakistan) so we have written a small legal note here in case anyone needs information.

In Pakistan, a dishonored cheque refers to a situation where a cheque drawn by a person for the discharge of a liability is returned unpaid by the bank. This can occur due to insufficient funds in the account or when the cheque exceeds the amount agreed with the bank. Such an act is considered an offence and is punishable by imprisonment for a term of up to two years, a fine of up to twice the amount of the cheque, or both.

To constitute an offence, the following criteria must be met:

1. The cheque should have been presented to the bank within six months from the date it was drawn or within its period of validity, whichever is earlier.
2. The payee or holder in due course of the cheque should have given written notice to the drawer within thirty days of receiving information from the bank regarding the dishonor of the cheque.
3. The drawer of the cheque should have failed to make the payment within fifteen days of receiving the notice.

It is important to note that the cheque in question should have been issued in discharge of a debt or liability, either in whole or in part. If the cheque was given as a gift or present and subsequently dishonored by the bank, the maker of the cheque would not be liable for prosecution.

In the case of offences committed by companies, individuals who were in charge and responsible for the conduct of the company’s business at the time of the offence will be deemed guilty and subject to proceedings and punishment. However, a person can avoid punishment by proving that the offence was committed without their knowledge or that they exercised due diligence to prevent its commission. Additionally, individuals nominated as directors by virtue of holding office or employment in the Central Government, State Government, or a government-owned financial corporation are not liable for prosecution. If it is proven that the offence was committed with the consent, connivance, or negligence of any director, manager, secretary, or other officer of the company, they will also be deemed guilty and subject to legal action.

Presentation of Cheque Any Number of Times:

1. There are no restrictions on the payee’s right to successively present a dishonored cheque during its validity period.
2. Each subsequent representation and subsequent dishonor of the cheque gives rise to a fresh cause of action for filing a complaint.
3. In the course of business transactions, it is not uncommon for a cheque to be returned due to insufficient funds or similar reasons. The payee may choose to present the cheque again, either voluntarily or at the request of the drawer, in the expectation that it will be honored.
4. The dishonor of a cheque constitutes a single offence, and the drawer commits this offence immediately upon failure to make the payment within 15 days of receiving the notice.
5. With each presentation and subsequent dishonor of the cheque, the payee acquires a fresh right, allowing them to exercise their rights at any point during the cheque’s validity period without the need for preemptive action.
6. The cause of action arises only when the drawer fails to make the payment after receiving the notice.
7. Once a notice for payment has been given, presenting the cheque again and subsequent dishonor will not create a new cause of action.

Effect of Stop Payment:

1. Issuing stop payment instructions does not absolve the drawer of the offence related to the dishonored cheque.
2. Even if the drawer provides notice of the stop payment instructions to the payee or holder in due course, the liability cannot be avoided.
3. The situation remains the same even if the drawer instructed the bank to stop payment before the presentation of the cheque for encashment.
4. Once a cheque is issued, there is a presumption that the holder received it for the discharge of any debt or liability. Merely issuing a notice to the drawee or the bank to stop payment does not prevent legal action under the applicable law.

Notice in Case of Dishonour:

1. It is mandatory to provide a notice making a demand for payment. If the drawer does not receive such notice within 30 days from the date of dishonor, a complaint may not be maintainable unless the complainant can demonstrate sufficient cause for the delay.
2. Notice must be in writing.
3. Proof of service can be established through a postal acknowledgement due that includes the signature of the accused, confirming receipt of the notice.
4. If a notice is returned by the sender as unclaimed, the date of such return would mark the beginning of the 15-day period. However, this does not preclude the drawer from later asserting that they were unaware of the notice being delivered to their address.
5. Notice can be sent by registered post, telegram, fax, or letter. While registered post is preferable as it provides clear evidence of service.

Period of Payment:

1. If payment is not made within 15 days of receiving the notice, the offence shall be deemed to have been committed.
2. The cause of action for filing a complaint arises after the expiration of the 15-day period from the date the drawer receives the notice and fails to make payment within that timeframe.
3. The court cannot take cognizance of the offence prior to the lapse of the 15-day period. Even if the liability is denied earlier, the accused can change their mind within the 15-day period, make the payment, and potentially avoid prosecution.
4. The offence is deemed to have been committed only after the expiration of the notice period.

Liability of the Drawer

The drawer cannot use the excuse that they had no reason to believe the cheque would be dishonored upon presentation, considering the reasons stated previously.

Remedies:

1. Civil Suit: The aggrieved party may file a civil suit for recovery of the amount owed.
2. Complaint under Section 138 of the Negotiable Instruments Act, 1881: The payee or holder in due course of the cheque can file a complaint under Section 138 of the Negotiable Instruments Act to seek legal redress.
3. Complaint under Section 420 for Cheating under the Pakistan Penal Code: A complaint can also be filed under Section 420 of the Pakistan Penal Code for cheating.

Simultaneous Remedies in Criminal Law 

 Filing a civil suit does not bar the initiation of criminal proceedings. Therefore, if a person has already filed a civil suit, they are not precluded from filing a complaint under Section 138 of the Negotiable Instruments Act or Section 420 of the Pakistan Penal Code. Both remedies can be pursued simultaneously.

Filing a Complaint:

1. Complaint by the Payee or Holder: The complaint must be made in writing by the payee or holder in due course of the cheque.
2. Time Limit for Filing: The complaint cannot be lodged after one month from the date on which the cause of action arose.
3. Filing through Power of Attorney or Agents: The complaint can be filed through a Power of Attorney or authorized agents of the payee or holder.
4. Written Complaint and Supporting Documents: The complaint must be filed in writing and accompanied by a list of witnesses and relevant documents.

The complaint can be filed in a court within the jurisdiction:

1. Where the cheque was drawn.
2. Where the cheque was presented for collection.
3. Where the cheque was received after endorsement.
4. Where the cheque was dishonored.

Jurisdiction of the Court: The offence shall be triable by a Metropolitan Magistrate or Judicial Magistrate of the first class or a higher court.

Limitation Period: The complaint must be filed within one month from the date on which the cause of action arose, i.e., within 45 days of the offender receiving the notice to make payment.

Court Procedure upon Receipt of the Complaint:

1. Pre-summoning Evidence: If the magistrate finds sufficient grounds for proceeding, the complainant will be called to present pre-summoning evidence and necessary documents.
2. Issuance of Summons: Subsequently, summons will be issued for the attendance of the accused and witnesses.
3. Recording of Witness Testimony: The evidence of witnesses will be recorded.
4. Accused’s Plea: The particulars of the offence will be stated to the accused, who will be asked to enter a plea of guilty or present a defense.
5. Guilty Plea and Conviction: If the accused pleads guilty, the magistrate will record the plea and proceed to convict them.
6. Trial Proceedings: If the accused does not plead guilty, the magistrate will proceed to hear the complainant and the accused, allowing both parties to present their evidence.
7. Order of Conviction or Acquittal: Based on the hearing and evidence presented, the magistrate will pass an order of conviction or acquittal.

Query from July 2023 

Former overseas Pakistani here, I have no  British citizenship just had an indefinite leave to remain in UK  and stayed  there for 15 years.Came back 3 years ago during Covid19 after divorce.My family is separated, I have no property or work there.How can I re-enter UK on the same visa for indefinite leave to remain?

Re-entering the UK on the same visa for indefinite leave to remain after a period of absence requires careful consideration of the specific circumstances and eligibility criteria. Based on the information provided, we can outline the following guidance:

If you were away for less than 2 years:

If your absence from the UK was less than 2 years, you still retain your indefinite leave to remain. To re-enter the UK, you need to meet the following conditions:

• You had indefinite leave to remain in the UK when you last departed.
• You did not receive financial support from the Home Office to leave the UK.
• When traveling to the UK, you should present the stamp, vignette, or biometric residence permit that originally granted you permission to settle in the UK. If the original documentation is in an old passport, it is advisable to carry both your old passport and your new passport.

If you were away for more than 2 years (Returning Resident visa):

If your absence from the UK lasted for 2 or more continuous years, you no longer hold indefinite leave to remain. In this case, you may be eligible to re-enter the UK and obtain indefinite leave to remain by applying for a Returning Resident visa. However, certain exceptions apply if you or your partner are in the British armed forces or work for specific UK government departments or the British Council.

Eligibility:

To apply for a Returning Resident visa, you must provide sufficient evidence to demonstrate:

• Strong ties to the UK, such as having lived here for a significant portion of your life.
• Your current circumstances and reasons for residing outside the UK.

Family members (dependants):

If you have dependants, including a partner and children, who are eligible for a Returning Resident visa, they must apply separately.

Application process and fees:

The application for a Returning Resident visa can be made online. The current cost of the application is approximately £531 (as of July 2023). Along with the application form, you will need to submit the following documents:

• A valid passport or other acceptable travel identification.
• Previous passports.
• A passport-sized color photograph.
• Documentation supporting your ties to the UK, such as evidence of income, property ownership, or rental history in the UK.
• Additional documents may be required depending on your individual circumstances.

Biometric information:

As part of the application process, you will need to have your fingerprints and photograph (biometric information) taken at a visa application center in your country of residence, specifically in Pakistan.

It is important to note that individual circumstances may vary, and it is recommended to seek personalized legal advice to ensure compliance with the specific requirements and procedures for re-entry to the UK on a Returning Resident visa.

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Archived from 2016

Query: Can a Pakistani woman residing abroad file family dispute cases in Pakistan if her husband is also living outside of Pakistan?

Context : Filing For Divorce in Pakistan for non-resident Pakistanis

The answer is affirmative, as a Pakistani woman living abroad has the option to initiate legal action in Pakistan to recover dowry items, gold ornaments, clothing, and money borrowed by the husband from the wife. In such cases, the court will typically issue a notice to the husband, requiring his appearance in court. It is important to note that legal action may also be pursued in the foreign country of residence. Therefore, non-resident Pakistanis have the possibility to file for divorce in Pakistan, seeking legal remedies for their matrimonial issues.

 When two Pakistani individuals are married and residing in different countries, their matrimonial disputes can be resolved through legal proceedings in Pakistan.

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Query from 2019

I am the owner and Director of an Education Agency that focuses on representing universities. I own the a brand in Canada and Saudi Arabia and wish to start up in Pakistan. I am a foreigner (not Pakistani). I was advised that starting up a company under my name in Pakistan is complicated and difficult, please advise.
One of my previous employees, a Pakistani national, retuned back to (city redacted)  and he is suggesting to start up a company under his name and to allow us access to the market. The company will be fully funded by myself and the local management will be done by the Pakistani colleague. I would like to get some legal advice on the best route for us to operate in Pakistan and guarantee our investment and brand name.

It is important to note that foreigners can establish and operate companies in Pakistan with relative ease. In fact, a significant portion of our corporate clientele comprises foreigners. To ensure the protection of your trademark, investment, and intellectual property rights, we highly recommend that you register the company in your own name. By doing so, you can manage the funds, copyrights, patents, trademarks, and investments in a secure manner. The Pakistani national you mentioned can be hired as an employee or director at a later stage. However, based on our extensive experience with similar brands and situations, it is advisable to establish the company in your name and retain control over the legal aspects. Opening a bank account in Pakistan may require a one-day trip, but our team can assist you throughout the process to ensure a smooth and efficient experience.

Applicable Law: Companies Act 2017 and Foreign Companies Regulation 2018.

For more context our readers you can read the following article at the Josh and Mak International Website.

Special advice for Foreign Companies Setting Up Business in Pakistan

Query from January 2020

I’m a little bit confused right now because  of my nationality, I don’t know wether I will get the Pakistani nationality or not because my father was not Pakistani but my mother is. She has the Pakistani nationality so, it makes me think wether I will get the nationality or not?What does the law say on this? (This query pertains to Pakistani citizenship by descent)

It depends on how old you are at the time of your query.Children born outside of Pakistan to Pakistani parents are eligible for citizenship by descent. In cases where the parent is already a citizen by descent (born outside of Pakistan), the child is required to be registered at the nearest consulate or Pakistani mission.

Furthermore, as of 18th April 2000, children born to a Pakistani mother and a foreign national father are also considered citizens of Pakistan.Children born before 18 April 2000 were entitled to citizenship by descent through their fathers only. This change in policy ensures that children of Pakistani mothers have the right to Pakistani citizenship, regardless of the nationality of their father.The relevant section dealing with Citizenship by Descent is the Pakistani Citizenship Act 1951, section 5.

It is important to note that proper registration procedures should be followed to ensure the child’s citizenship is recognized. This may include submitting the necessary documentation and completing the registration process at the nearest consulate or Pakistani mission.

Connected question:

What does it mean to be a ‘common wealth citizen” for Pakistanis?

From August 1947 to January 1972, Pakistani citizens held Commonwealth citizenship by default.

Between January 1972 and late 1989, Pakistani citizens did not hold Commonwealth citizenship.

Since late 1989, Pakistani citizens have once again been granted Commonwealth citizenship by default.

Query from June 2023

There were seven sharers of an inherited estate. Three brothers and four sisters. The first brother died, his children are two sons and four daughters. The second brother is alive and has a daughter. The third brother died and has no children. First sister died, she has two sons and four daughters. The other sister is alive with one son and two daughters. The third sister is alive and has four daughters. The fourth sister is dead, her husband is alive, she has no children. The value of the house is (redacted). I have to know that what is the inheritance share of each entitled person?

Response and further questions

Thank you for providing details about the seven sharers of the inherited estate. However, in order to provide accurate advice, we need to gather further information. Please note the following questions and considerations:

1. Shia or Sunni Law: It is essential to determine whether you are following Shia or Sunni law, as inheritance rules may differ between the two.
2. Surviving Parents: Is the mother or father (spouse of the deceased) still alive? If so, they will be considered an additional shareholder of the inherited estate.
3. Court Declaration: Has the court formally declared these heirs as the legal heirs of the deceased? If so, do you have the court order available? Additionally, are any of the children minors?

If the heirs mentioned are not court-declared heirs, please pay attention to the underlined questions below:

• The first brother has passed away, leaving behind two sons and four daughters. His share will be distributed among his children and his surviving wife. To determine the exact shares, we need to know if he had a wife.
• The second brother is alive and has a daughter. He will receive his share, while his daughter and wife are not direct heirs and will not receive a share directly.
• The third brother has passed away without any children. To determine the distribution of his share, we need to know if he had a surviving wife.
• The first sister has passed away, leaving behind two sons and four daughters. The distribution of her share depends on whether her husband is alive. In the absence of their father, her children will inherit the entire share of the property.
• The other sister is alive and has one son and two daughters. She will receive her share of the property, but her children are not entitled to a share as they are not direct heirs of either of your parents.
• The third sister is alive and has four daughters. She will also receive her share of the property, but her daughters are not direct legal heirs of the parents of the siblings.
• The fourth sister has passed away, leaving her husband as the sole surviving spouse. He will receive his share of the property.

Now, it is important to understand the basic principles for the distribution of inheritance among brothers and sisters (assuming there are no other eligible heirs):

• Brothers collectively receive 2/3 (or two-thirds) of the inheritance.
• Sisters collectively receive 1/3 (or one-third) of the inheritance.

The same principle based on gender will apply to the shares of the deceased when divided among their children.

Additionally, please note that the entitlement of a husband or wife to a deceased spouse’s estate depends on the presence of children. A husband is entitled to half of his deceased wife’s estate if she has no children, or a quarter share if she has children. Similarly, a wife is entitled to a quarter share of her deceased husband’s estate if she has no children, or one-eighth if she has children.

Please keep in mind that the precise distribution of shares will depend on the information provided above and any legal documentation, such as wills or other relevant documents left by the deceased.

Further context, querent never replied back.

Useful reading from the Josh and Mak International Website.Click on the link below.

The Division of Islamic Inheritance Shares: Understanding the Principles and Distribution

Updated July 2023

In July 2023, this was the top frequently asked question by Overseas Pakistanis buying property in Pakistan:

Has the property tax for overseas Pakistanis been abolished as per the news items talking about it?

As per recent news, there were discussions about abolishing the two percent final tax on the purchase of immovable property through foreign remittances in the Finance bill 2023. However, this proposed change regarding the non-applicability of advance tax on property purchases through Roshan Digital Account for overseas Pakistanis was not approved and did not become a part of the Finance Act 2023. Therefore, the tax has effectively not been abolished.

Connected question

I am an overseas Pakistani and I want to buy a plot in Lahore (Punjab). What taxes do I have to pay?

As an overseas Pakistani, you will be subjected to a 3% advance tax on the purchase of the property. According to the new Finance Act 2023, it is mandatory to pay this tax and provide proof of payment to the land registrar in order for your property purchase to be registered.It does not matter if you are a filer or non filer, you have to pay this Advance Tax under Section 236K of the Income Tax Ordinance 2001. For more information on resident and non-resident/overseas tax status, click on the link below.

Buying Property in Pakistan: A Legal Guide for Overseas Pakistanis and Foreigners

Further context

As always we repeat our advice to overseas Pakistanis buying property in Pakistan as follows :

• Legal Channels: Always pursue legal channels when conducting financial transactions with business partners. This ensures transparency and protects your interests.
• Document Verification: Before investing in a new business, carefully verify all necessary documents. It is advisable to visit the actual site and conduct due diligence to assess the viability of the investment.
• Written Agreement: Prepare a comprehensive written agreement that clearly outlines the rights and duties of all shareholders or business partners. This partnership agreement should be duly signed by all concerned parties to establish a solid legal foundation.
• Registration: Register the partnership agreement with relevant government business regulatory services such as the Federal Chamber of Commerce & Industry (FPCCI) or the Securities and Exchange Commission of Pakistan (SECP). This ensures compliance with legal requirements and offers protection to the business.
• Power of Attorney: Exercise caution when granting Power of Attorney. Avoid granting General Power of Attorney, which grants broad legal powers. If necessary, assign Special Power of Attorney for specific purposes while specifying the limitations and scope of authority.
• Avoid Blank Paper: Refrain from signing any blank paper to prevent unauthorized use or manipulation of your signature.
• Protection of Identification Documents: Do not provide copies of your national identity card (CNIC or NICOP) or any other important identification documents to anyone without a valid purpose. When necessary, clearly mark the purpose and put a cross on the copies to safeguard against misuse.
• Verify Approval: If purchasing a property from a private housing scheme, confirm its official approval status by consulting the local regulatory authority such as the Lahore Development Authority (LDA), Capital Development Authority, etc.Bahria Town sometimes raises objections to disclosing property details to members of the public making a query on title and dishonest property dealers take advantage of this fact by keeping the purchaser in the dark about the actual owner of the land or plot. Always refuse to engage with such agents or dealers who cannot get you a proper verification from the Bahria town management through the owner.
• Land Transfer: Inquire whether the housing scheme will transfer the land in your name or provide only an allotment. It is preferable to have the land transferred in your name to establish clear ownership rights.
• Seller Verification: When buying property from an individual seller, verify the seller’s registry title with the local authorities to ensure a legitimate transaction.
• Mutation Entry: After purchasing property through a Registered Sales Deed, ensure that the mutation is duly entered in the land record. This step validates your ownership and protects your property rights.
• Property Security: If you acquire an open plot, consider constructing a boundary wall with a gate to safeguard your property from illegal possession.
• Notice Publication: Before finalizing a property purchase, consider publishing a notice in a local newspaper to provide public notice of your intended transaction.
• Pay attention to the news and any updates on litigation or court action against a property developer or scheme.

Archives from 2014 

Common combined queries on child custody :

As a law firm specializing in family matters, we frequently receive inquiries from single mothers seeking clarity on various issues related to international travel with their children.These are often styled as follows:

Can a single mother plan a trip outside Pakistan with a minor without the father’s permission?

Is it permissible for a minor to travel with a single mother without formal guardianship?

What options are available if the father refuses to grant permission for the minor to travel abroad?

Can the father legally prevent the mother from taking the minor outside Pakistan

Do single mothers need permission from the court to travel abroad with a minor?

The issues can be framed as follows :

1. Permission from the Father: Many single mothers wonder whether they can plan trips outside Pakistan with their minors without obtaining permission from the child’s father.
2. Traveling without Guardianship: Single mothers often inquire about the permissibility of traveling with their minors without formal guardianship.
3. Dealing with a Father’s Refusal: If the child’s father denies permission for the minor to travel abroad, it is crucial to understand the available options and legal remedies.
4. Father’s Authority to Stop Travel: Single mothers may question whether the father has the legal authority to prevent them from taking their child outside Pakistan.
5. Court Permission Requirements: Depending on the specific circumstances and existing legal agreements, single mothers may need permission from the court to travel abroad with a minor.

If you are a single mother seeking answers and assistance regarding international travel with a minor, please don’t hesitate to reach out to us. Our expert legal team is ready to provide the guidance and support you need. Contact us today to schedule a consultation.

Can a Single Mother Plan a Trip Outside Pakistan with a Minor Without the Father’s Permission? One of the most frequently asked questions is whether a single mother can travel with her minor child without the father’s permission. The answer to this question depends on the legal aspects surrounding custody and guardianship.

Guardianship Certificate: A Prerequisite for Traveling Abroad: Following a separation or divorce, it is crucial for a mother to obtain a Guardianship Certificate from the Court of Law. This certificate serves as evidence that the mother has been legally vested with parental responsibility for the minor child. Without this certificate, not only will the mother’s request for a passport for the minor be denied, but her visa application may also be refused.

Obtaining the Guardianship Certificate: To obtain a Guardianship Certificate, the mother must apply to the court of law. Required documents typically include proof of marriage or Nikahnama, the mother’s CNIC, the minor’s birth certificate or identity documents, and evidence of expenses related to the upbringing of the minor. The specific documents required may vary depending on the circumstances of each case.

Permission to Travel Abroad: Once the Guardianship Certificate is obtained, the mother can apply to the court for permission to travel abroad with the minor. It is essential for the mother to provide factual information that aligns with the requirements of the embassy. Whether the trip is a short-term visit or a permanent relocation, our experienced legal team can assist in obtaining the necessary permission from the court efficiently and effectively.

Traveling Abroad with a Minor on the Father’s Permission: In cases where the marriage is still intact, the father’s permission is generally sufficient for obtaining a passport for the minor and fulfilling visa requirements. Both parents would typically accompany the minor for the application process.

 If you are a single mother seeking to travel abroad with your minor child, it is crucial to understand the legal procedures and requirements. The Guardianship Certificate plays a vital role in transferring parental responsibility to the mother. By following the correct legal process and providing accurate information, you can ensure a smooth and hassle-free experience.

At Josh and Mak International, our expert family lawyers specialize in assisting single parents with obtaining guardianship and travel permission for minors. Contact us today to schedule an appointment and benefit from our legal expertise in navigating the complexities of traveling abroad with a minor as a single mother.

Further context on getting guardianship through court proceedings 

Under Section 19 of the Guardian and Ward Act, 1890, the father is generally empowered to retain guardianship of a minor. However, it is important to note that this rule is not absolute. At Josh and Mak International, we have successfully assisted numerous mothers in obtaining guardianship through a streamlined legal process, minimizing time, hassle, and inconvenience.

In Pakistan, courts tend to prioritize the well-being and best interests of the child, often recognizing the importance of a mother’s care. With our expertise in family law, we have facilitated the attainment of guardianship for mothers in a timely and efficient manner.

To obtain a guardianship certificate from the court of law, certain documents are typically required. These may include:

1. Marriage/Nikahnama Proof: Providing evidence of the marriage or Nikahnama is essential to establish the relationship between the parents and the child.
2. CNIC of the Mother: The mother’s Computerized National Identity Card (CNIC) serves as identification and verifies her legal status.
3. Birth Certificate or Identity Documents of the Minor: Presenting the minor’s birth certificate or other relevant identity documents helps establish their age and legal identity.
4. School Challan or Receipt of Expenses: Providing documentation such as school challans or receipts demonstrating the mother’s financial responsibility towards the upbringing and education of the minor can support the case for guardianship.

It’s important to note that the supporting documents required may vary depending on the specific facts and circumstances of each case. Our legal team at Josh and Mak International is well-versed in navigating the intricacies of guardianship cases and can guide you through the process effectively.

If you are a mother seeking to establish guardianship of your minor, we are here to assist you. Contact us today to schedule a consultation with our experienced family lawyers who can provide the necessary guidance and support throughout the legal proceedings.

Connected Query 

I want to get some advice on child custody in Pakistan. I live overseas and my son lives with his mother in (city redacted)Pakistan. We recently divorced and I want to take my 2 year old son overseas with me and apply for full custody in Pakistani courts.

I understand that as a father, you are concerned about your rights and involvement in your child’s life, especially given the challenges of being overseas. Allow me to offer some guidance and considerations for your situation.

In Pakistan, the courts tend to prioritize the well-being and care of young children by favoring the mother as the custodial parent. This means that obtaining full custody as a father can be a challenging process, particularly if the mother contests the custody claim. Therefore, it is crucial to understand the jurisdiction where your marriage took place and where it was dissolved.

Considering your overseas status, if the matter goes to court in Pakistan, there is a higher likelihood that the mother will be granted full custody with you having visitation rights. The court’s judgment will determine whether you can take the child out of Pakistan. It’s important to note that the court will take various factors into account, including the child’s age and the mother’s access to the child if you were to relocate overseas.

However, it is worth mentioning that if the mother decides to remarry, the circumstances may change, and there could be a more favorable chance of achieving full custody for you.

Alternatively, it may be worth exploring the option of jurisdiction in the country where the mother and child currently reside. The location where they lived during your marriage and the mother’s citizenship status overseas become relevant factors. Did she obtain citizenship through marriage?

Regarding bringing the child to Pakistan, it seems from your messages that you have allowed the mother to have custody without objection thus far. As a result, raising the issue of the child being ‘abducted’ and brought to Pakistan by ‘deception’ may not be applicable in this situation.

To examine the matter from an overseas jurisdiction perspective and potentially gain custody of your child, it is advisable to consult a qualified local lawyer in the respective country. A custody judgment obtained overseas can be used for enforcement in a local guardian court in Pakistan. However, it is essential to establish the jurisdiction of the overseas court before proceeding with this approach.

On a practical note, I understand that pursuing legal action through overseas Pakistani courts can be emotionally and financially draining, especially considering your existing responsibilities towards your two children overseas. Instead, I would suggest considering a more amicable approach, where you aim to establish cooperation with the mother regarding visitation rights facilitated through video calls while you are abroad.

A privately agreed-upon custody agreement that allows the child to live with his mother while granting you the option to visit and spend time with your child during your visits to Pakistan could be a beneficial arrangement. This approach would enable you to maintain contact with your son and have a say in his upbringing and education. Until the child reaches an age where the court may consider granting you full or partial custody, having a well-defined legal strategy to stay involved in his life is crucial.

Initiating a conversation with the mother and discussing these possibilities may be a good starting point. Instead of resorting to a custody battle in court, exploring a softer approach can pave the way for mutual understanding and cooperation. At some point, the mother may consider remarriage and may voluntarily allow you to take the child overseas for a better future. However, it is important to adopt a less aggressive strategy to build trust and find common ground.

If needed, our law firm offers assistance in facilitating such discussions between parents. We understand that the child’s best interest is the top priority, and our aim is to help you reach a custody agreement that both parties can trust and be held accountable for.

Further context: Client further advised to explore the idea of a written, private custody visitation agreement with the mother.Based on further  information provided, it was evident that the jurisdiction of the Pakistani courts would apply to this matter.

Response: As previously mentioned, obtaining full custody of a child at such a young age is not feasible under Pakistani family law and policy. The court process for physical visitation rights can be complex and time-consuming, making it less practical for your situation, particularly since you may not frequently visit Pakistan.

To ensure your continued involvement in your son’s life and maintain a strong relationship, it is advisable to pursue a cooperative approach with the mother and establish a comprehensive visitation agreement. Here are some key considerations to address in the agreement:

1. Visitation Schedule: Establish a clear and mutually agreed-upon schedule for visitation, specifying the days, times, and duration of each visit.
2. Travel Arrangements: Determine any necessary travel arrangements if long-distance visitation is involved, including responsibilities and costs.
3. Communication: Define the mode, frequency, and accessibility of communication between you and your child when you are not physically together.
4. Father’s Rights in Parental Decision-Making: Clarify your role and rights in major decisions regarding your child’s upbringing, such as education, healthcare, and extracurricular activities.
5. Access to Information: Ensure that you have access to relevant information regarding your child’s education, medical records, and other important matters.
6. Modification of Visitation Rights: Establish a process for modifying the visitation agreement if circumstances change or adjustments become necessary.
7. Dispute Resolution: Include provisions for resolving any disputes or disagreements related to the visitation agreement through mediation or alternative methods before resorting to court intervention.
8. Right to Relocation: Address the rights and obligations of both parents in the event of relocation, including notice periods and potential adjustments to visitation schedules.
9. Holiday and Vacation Schedule: Determine how holidays, school breaks, and vacations will be shared between you and the mother to ensure your involvement in these special occasions.
10. Access to Extended Family: Acknowledge the importance of your child’s relationship with your extended family members and allow reasonable access during visitation time.

Our team at Josh and Mak International can assist you in establishing communication with the mother and convincing her to cooperate with your visitation requests. We can also help facilitate the negotiation and signing of the Visitation Agreement, ensuring that the agreed-upon clauses are followed and complied with. It may be beneficial to involve a third-party mediator to facilitate communication and maintain a constructive atmosphere.

By taking this approach, you can work towards maintaining a meaningful relationship with your son while minimizing the need for lengthy court battles. Please feel free to reach out to us for further assistance and guidance in navigating this process.

Additional Contribution to the advice by another member of our team

Child Custody Agreements in Pakistan play a pivotal role in resolving one of the most significant disputes arising from separation or divorce – the custody of a minor child. These legally binding agreements provide a framework to safeguard the interests of both parents and ensure the well-being of the child. It is imperative to recognize the importance of formalizing Child Custody Agreements in Pakistan to establish clarity, protect parental rights, and promote the best interests of the child.

When parents separate or divorce, oral agreements on custody may lack enforceability and can lead to disputes. Written Child Custody Agreements serve as a vital tool to prevent conflicts, minimize uncertainties, and provide a solid foundation for post-divorce parenting. These agreements address critical aspects that require careful consideration:

1. Determining which parent will retain custody of the minor, especially when one parent has agreed to allow the other to assume custody.
2. Specifying the district in which the custodial parent and the child will reside, ensuring stability and accessibility.
3. Clarifying the conditions under which the custodial parent can travel abroad or relocate with the child, respecting the rights and concerns of the non-custodial parent.
4. Outlining visitation rights for the non-custodial parent, fostering ongoing parental involvement and a healthy parent-child relationship.
5. Establishing provisions for child maintenance, including the payment mechanism and financial responsibilities of the non-custodial parent.
6. Determining the decision-making authority regarding the child’s education, healthcare, and religious upbringing, with consequences for non-compliance.

To ensure the efficacy of Child Custody Agreements in Pakistan, it is crucial to draft them with the evolving needs of the child in mind. The agreement should focus on the child’s best interests, taking into account their present and future requirements. By prioritizing the child’s welfare and including detailed provisions, the agreement gains credibility and stands stronger before the court.

Child Custody Agreements in Pakistan empower parents to create a nurturing and stable environment for their child’s growth and development. Seeking professional legal guidance is highly recommended to draft comprehensive and legally sound agreements that comply with Pakistani laws and regulations. By emphasizing the significance of Child Custody Agreements in Pakistan, parents can proactively resolve disputes, protect their parental rights, and ensure the well-being of their child throughout and beyond the separation or divorce process.

Query : I want to know about the age-limit of custody in Pakistan.I am a working mom and I can afford to raise my two sons over the age of 8 and 9 respectively.Is it true the court will take them away from me and allow the father full custody?

In the realm of marriage disputes, separation, and divorce, there exists a prevalent misconception that a mother can only have custody of a minor boy until the age of 7. This notion, however, is entirely false. In this article, we aim to clarify the key factors that Family Courts in Pakistan consider when deciding custody claims related to minor sons, which are typically filed by the non-custodial parent.

In Islamic jurisprudence, custody of a minor son is granted to the father upon reaching the age of 7, while in the case of a minor daughter, the non-custodial father may have custody after she attains puberty. It is worth noting that Family Courts in Pakistan take into consideration the edicts issued by recognized Muslim jurists while deciding custody claims. However, under the prevailing Custody Laws in Pakistan, Family Courts are mandated to prioritize the best welfare of the minor when making custody determinations. Hence, Family Courts are not bound to strictly adhere to the aforementioned Islamic principles.

Consequently, the non-custodial father must establish the best interests of the minor before the court by providing compelling evidence that demonstrates it is in the child’s best interest to be placed in the custody of the non-custodial father. Therefore, the age factor alone is not a sufficient reason for the court to grant custody to the father.

Another erroneous belief in our society suggests that custody is automatically awarded to the financially stronger parent, assuming that the mother is unable to independently meet the day-to-day needs of the child. However, the superior courts of Pakistan have firmly established the principle that factors such as financial stability cannot be used as sole determinants of the child’s best interests and welfare. It is a natural division of responsibilities where the mother invests her energy in the upbringing of the child, while the father is responsible for providing financial support and maintenance.

Currently, Family Courts are legally obligated to scrutinize and determine custody matters, even if an agreement has been previously executed between the parents. For instance, if the mother has, in writing, agreed to hand over custody of the child to the father, the court, in evaluating the best interests and welfare of the child, may declare such agreements null and void. In cases where there is a conflict between legal rights, the welfare of the minor takes precedence. Therefore, any custody arrangements previously agreed upon shall hold no force in the eyes of the law.

Hence, it is evident that age is not the sole factor considered by Family Courts when deciding custody matters. Instead, the paramount consideration is the best interests and welfare of the child, which may vary in each case. It is imperative to consult with legal experts who possess a deep understanding of the intricacies of custody laws to ensure the protection of the child’s rights and the formulation of a custody arrangement that serves their best interests.

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Archives from 2019

Query: I got married on (date redacted), and the divorce was finalized on (date redacted). Following the divorce, I filed a case for child maintenance against my husband in the Pakistan family court, and I was successful in obtaining a court order requiring him to provide child support in the amount of 60,000 Pakistani rupees.

However, during the proceedings, my husband applied for immigration to another country. Subsequently, he has fled abroad in an attempt to evade his responsibilities. I currently do not have any information regarding his new address or whereabouts in that country.

My intention is to bring my daughter to my father’s new country, and I am seeking his support in providing for her education and upbringing in that location.

If you have already obtained a divorce, it is unlikely that you would have a favorable chance of relocating to your ex-husband’s new country. This is because he was not a national of that country during your marriage or at the time of your marriage. Additionally, if he obtained citizenship after the birth of your child, the chances of your child acquiring his new nationality solely based on birth are slim.

However, there are legal actions we can take to address your concerns. We can file for an enforcement of the child support order that was issued in 2018. By doing so, we can seek a court judgment against your ex-husband for his failure to comply with the child support obligations. Regardless of his location, he can be held accountable for making the payments, including any outstanding amounts from a previous date. Non-compliance may lead to criminal charges being brought against him.

Regarding your daughter’s eligibility to inherit her father’s citizenship once she reaches the age of 18, it is important to note that she cannot inherit his citizenship as he acquired it after her birth.

Since you mentioned that you have been unable to trace your ex-husband since the divorce, it is possible to locate him through a reputable investigative agency in Canada using a copy of his passport.

In order to pursue legal action for child support, it is advisable to enforce the child support order in Pakistan. It is not possible to sue him in his new country based on a marriage registered in Pakistan and the birth of your child that occurred before he acquired citizenship in another country.

Our recommendation is to proceed with enforcing the child support order and pursue enforcement through the courts in his new country, ensuring that he fulfills his financial obligations. Simultaneously, we can assist in tracing his whereabouts through a reputable investigative firm in his new country and serve him with a legal notice as necessary.

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Archived from 6th of July 2023

I am 50 years old and abroad. I am in a situation where I am required to have a birth certificate. I was born in Punjab. How can I register for late registration of Birth online? Context : The querent clarified that they were trying to register the late birth registration through the Go Punjab App.They were told that this is not possible.

As you are 50 years old you will need to file for a court case before your request for late registration via the Union Council will be accepted.Refer to the Punjab Local Government (Births and Deaths) Rules 2021, s4 deals in detail with late registration of Birth and reads as below :

“Section 4. Late registration of birth. – (1) If a birth is reported after sixty days but not later than  [seven] years to the concerned registration office, the applicant shall, while stating the reasons of delay, make an application on Form-A for registration of birth along with following documents: (a) copy of CNIC of the applicant; (b) birth slip of the child issued by the hospital (in case of birth in a hospital); (c) attested copy of vaccination card indicating the name of the child and his date of birth, if available; and  (d) two recent photographs of the child.

(2) The application shall be submitted either manually or through online system in the concerned registration office.

(3) The concerned registration official shall, after receiving an application, verify the particulars  [from the applicant] and submit a report to the concerned head of the local government on same day containing the following note: ‘No record of the intended birth entry exists as per record of the local government’.

(4) In case of non-registration of birth, the concerned head of the local government, after due inquiry, shall issue an order for registration of late birth.

(5) The concerned registration official shall, after registration of birth, issue a certificate on the same day.

(5a) In case of refusal of registration of birth, an appeal may be filed to the committee ……

(6) In case a birth is reported after 6 [seven] years, it shall be registered after court decree.

(7) Late entry shall be made in red ink in the concerned register.”

Additional Information for the public.

The Punjab Local Government (Registration of Births and Deaths) Rules 2021 is a set of rules governing the registration of births and deaths in Punjab, Pakistan. The rules define the terms used in the rules, such as “birth”, “death”, “certificate”, and “charges”. They also specify the procedures for registering births and deaths, the fees that are charged for registration, and the circumstances in which registration is not required.A proper process for registering Late  Registration of Birth or Death is mentioned. For example, the rules state that no charges will be charged for registering the birth of an abandoned child or a child born in jail. Additionally, the rules state that if the particulars of a deceased person are known but his dead body is not found, registration of his death can be made by a relative of the deceased after registration of a police report and on the order of a court. The rules also specify the format of the certificates that are issued for births and deaths.

Here are some of the key points of the rules:

• The rules apply to all births and deaths that occur in Punjab, Pakistan.
• The registration of births and deaths must be done within 60 days of the event.
• There are no fees for registering the birth of an abandoned child or a child born in jail.
• There are no fees for registering the death of an abandoned or unclaimed dead body.
• The registration of a death can be made by a relative of the deceased after registration of a police report and on the order of a court.
• The certificates that are issued for births and deaths must be in a specified format.

The rules were published in the Punjab Gazette on May 31, 2021, and they came into force immediately.

If you are looking for registration of Late births or deaths in Islamabad Capital Territory, please note that CDA deals with this.

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Client query on why the Trusts Registrar was telling them that their entity registered under the KPK Trusts Act 2020 could not sell properties owned by the Trust.Upon a review of the Trust Deed and the KPK Trusts Act 2020, it was determined that the Applicable Law was in fact the KPK Charities Act 2019 which can be accessed here.

First of all it was clarified that they can sell the property under the Charity, but it comes under the strict purview of Section 24 of the KPK Charities Act, which talks about the trustee’s obligations regarding sale of property.There is no set procedure for sale of property written there but it would be sensible to assume that the Commission on Charity would want to be notified of the transparency of the process where such a decision was being taken.It would be best to clarify this from the Charity Commission itself.

Client has been advised to scrap their registration under the KPK Trusts Act 2020 and to register their charity under the KPK Charities Act 2019.

The response given was as below,

After reviewing the trust deed you provided, we believe there may have been some confusion regarding the registration under the KPK Trusts Act 2020. Allow me to clarify the situation for you.

Based on the contents of the trust deed, it appears that your arrangement falls under the definition of a charity rather than a trust. Therefore, the appropriate registration should have been made under the KHYBER PAKHTUNKHWA Charities Act 2019. This act provides provisions for the registration, administration, and regulation of charities, as well as the collection of charitable funds in KPK. It is specifically designed to govern charities and their operations, including fundraising appeals and collection of funds.

While the Registrar is correct in stating that you cannot sell the property under the KPK Charities Act 2019, it is important to note that your current registration under the KPK Trusts Act 2020 is void as it does not align with the nature of your organization. To assist you in understanding the concept of trust and charity, I have sent you a copy of the KPK Charities Act 2019 for your reference.

Following the enactment of the Khyber Pakhtunkhwa Charities Act in 2019, it is now a legal requirement for all charities to register with the Khyber Pakhtunkhwa Charities Commission. Failure to comply with the registration process prohibits charities from collecting charitable funds or soliciting donations. The Charities Act also outlines the consequences of non-compliance, including potential criminal proceedings.

To initiate the registration process, charities can conveniently apply through an online portal provided by the Charities Commission. This streamlined approach aims to facilitate the registration procedure and ensure compliance with the regulatory framework.

It is crucial for charities to adhere to the registration requirements as prescribed by the Khyber Pakhtunkhwa Charities Act 2019 to maintain transparency, accountability, and legitimacy in their fundraising activities. By fulfilling their registration obligations, charities can establish trust and credibility among stakeholders while operating in accordance with the legal framework designed to safeguard the interests of the public and charitable causes.

For your understanding the differences between the concept of a trust and a charity are explained below.

• Purpose:
  • Trust: A trust is established to manage and protect assets for the benefit of specific beneficiaries, following the terms and conditions set out in the trust deed.
  • Charity: A charity is created to support and promote specific charitable purposes or causes, aimed at providing public benefit such as alleviating poverty, advancing education, promoting health, or supporting the arts.
• Legal Status:
  • Trust: A trust is a private legal arrangement between a settlor, trustee, and beneficiaries. It is not always required to be registered with a regulatory authority.
  • Charity: A charity is a formal legal entity that must be registered and recognized by the relevant regulatory authority in a specific jurisdiction. It must meet certain legal requirements and criteria to obtain charitable status.
• Governance and Accountability:
  • Trust: The governance and accountability of a trust are primarily defined by the terms of the trust deed and the trustee’s fiduciary responsibilities towards the beneficiaries.
  • Charity: Charities are subject to specific legal and regulatory frameworks governing their operations and activities. They often have a board of trustees or directors to oversee governance and ensure compliance with applicable laws and regulations.
• Tax and Financial Considerations:
  • Trust: The income generated by a trust is typically distributed to the beneficiaries and subject to taxation at their individual levels.
  • Charity: Charities may enjoy tax benefits and exemptions due to their recognized status. Donations made to registered charities can be tax-deductible, and charities themselves may be exempt from certain taxes. Financial transparency and accountability are crucial for charities.

I hope this clarification helps you understand the distinction between trusts and charities.

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Overseas query from an individual who was asking whether it would be safe to pay a property dealer in their bank account.When asked for details the querent stated that a group of property dealers/real estate agents were demanding a ‘Bayana’ or Token money in their personal accounts before they would disclose the identity of the seller to the buyer.There was no sign of a promise of receipt or a contract on record.

The querent was advised to proceed with caution, due to the prevalent fraudulent activities in the property sector, particularly concerning instances where prospective buyers are overseas Pakistanis. It was emphasized that caution should be exercised when making any financial transactions or providing token money. The recommended approach was to ensure that funds are deposited into the account of a verified seller whose identification matches the name stated on the plot title documents.

Furthermore, the querent was advised to insist on obtaining a legally recognized document that complies with the local laws of Pakistan. This document would serve to record comprehensive details of the actual seller and the property involved in the transaction. It was highlighted that a property dealer does not possess the authority to sign a sales agreement or make claims of having the “rights to sell” a property unless supported by a proper power of attorney or a legally binding document.

To mitigate risks, the querent was strongly advised to verify the title of the property at the title registration office. This step would ensure the authenticity and validity of the property’s ownership. By undertaking these precautions, the querent would minimize the likelihood of falling victim to fraudulent practices and protect their interests when engaging in property transactions.

It is essential for individuals, especially overseas Pakistanis, to be aware of these potential risks and take proactive measures to safeguard their investments. By seeking professional guidance and conducting thorough due diligence, individuals can make informed decisions and mitigate the risks associated with property transactions in Pakistan.

Connected query answered on Quora.

Question : If a person delays making a payment for a land they bought, can they be sued under the Pakistan law?

In situations where there is a delayed payment for a land purchase in Pakistan, pursuing legal action can be a viable option to enforce the terms of the contract and protect your rights as a seller.

Under the Transfer of Property Act 1882, if the ownership of the property has already passed to the buyer before full payment of the purchase money, the seller is entitled to a charge on the property for the unpaid amount, along with interest from the date possession was delivered. The Act also states that the buyer is obligated to pay or tender the purchase money to the seller or as directed at the time and place of completing the sale.

In cases where the sale is not yet complete and a token deposit, known as Bayana, has been given with the rest of the payment to be made on the Transfer of Property date, the seller can take the buyer to court under the Specific Relief Act. Through a mandatory injunction order under section 55, the court can compel the buyer to honor the payment if the seller is able, willing, and ready to transfer the property.

If you decide to cancel the agreement and seek other buyers, it is essential to follow the terms of the contract. Send a proper notice to the buyer demanding payment and inform them of the actions you will take if the default continues. If the buyer requests a further extension, you can refuse it in writing and state that you will retain the deposit.

It is advisable to document every request and your response to any payment delays after Bayana is given. Each extension should be treated as a formal agreement to extend the payment deadline, clearly stating the consequences of non-payment.

In Pakistan, it is common for property dealers or middlemen to buy land or property by paying a small Bayana as an upfront deposit to the seller. They then attempt to find a buyer while acting as the owner of the property. Although the legality of such actions is questionable, it has become a norm in the real estate business. Often, these property dealers fail to find a buyer and start making constant requests to delay payment on various pretexts.

As mentioned earlier, the law is explicit in protecting your right to be paid on time for the property you have contracted to sell. When parties enter into a contract, they are legally obligated to fulfill their contractual obligations, including making timely payments as agreed upon in the land purchase contract. Failure to meet payment obligations constitutes a breach of contract. In such cases, you have the option to cancel the contract and retain the deposit payment.

However, complications can arise in situations where property middlemen or dealers have already taken a Bayana from another buyer at a higher price. If that end-buyer delays payment, it can cause a delay in the original seller’s payment. This puts the property dealer in a legally difficult position, as they do not wish to expose their position as a proxy buyer and potentially lose out on a profitable opportunity.

At this point, proxy buyers or property dealers may come up with various excuses and tactics to further delay payment. It is advisable to allow a one-time delay and obtain a written agreement stating that any further delay will result in the contract being canceled, with the full refund of the money.

To address such breaches, you have the legal recourse to file a lawsuit in Pakistan seeking specific relief. Specific relief refers to the court’s power to grant a specific remedy, such as ordering the defaulting party to make the overdue payment as agreed. This legal action aims to restore the injured party to the position they would have been in had the breach not occurred.

By pursuing legal action, you can seek the enforcement of the contractual terms and hold the defaulting party accountable for their obligations. It is important to note that the specifics of each case and the application of relevant laws may vary, resulting in different legal proceedings and outcomes.

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Querant wanted to know if a US owned family trust could own a local Company in Pakistan. Context : They wished to place a Pakistani property under a US Registered trust. When it was explained they cannot do that i.e. a foreign trust cannot own property directly in Pakistan, the querant asked whether the trust could register a company in Pakistan as its owner and by default a proxy owner of the property which would then be bought by the Pakistan company.They were advised that US owned family trust is not a body corporate as per the Companies Act 2017.In particular they were advised as follows :

In the context of establishing a company in Pakistan, it is important to understand the legal framework and requirements involved. While a trust in the USA may not be considered a body corporate that can directly own and operate a company in Pakistan (as per the Companies Act 2017), there are potential alternative structures that can be explored.

One option to consider is to consult with your US attorney regarding the possibility of registering a trust in the USA and subsequently utilizing this trust to hold ownership of a local US corporation or corporate vehicle. By doing so, the local US company can then become the owner of the company in Pakistan through 100% shareholding.

It is crucial to seek advice from legal professionals familiar with the laws and regulations of both the USA and Pakistan to ensure compliance with all applicable requirements. They will be able to guide you on the specific steps and processes involved in establishing such a structure, taking into account the legal implications and potential benefits for your particular circumstances.

At Josh and Mak International, we have a team of experienced legal professionals who can assist you in navigating the complexities of cross-border transactions and company structuring. If you require further assistance or have any additional questions, please do not hesitate to reach out to us.

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I want to rescind my current contract with an Oil Marketing Company and sign a contract for Petrol Pump with another one.What are my options to do this under the law?

To provide you with accurate guidance, it is necessary for us to review your current contract with the oil marketing company (OMC). If you have a copy of the contract, please share it with us so that we can assess whether your contract permits you to convert to another company. Additionally, we will determine if there are any penalties or specific processes outlined in the contract that need to be followed.

It’s important to note that this matter is governed by the terms and conditions set forth in your private contract, rather than specific laws or regulations. Each contract may have its own provisions and procedures for making changes or terminating the agreement. Therefore, it is essential to understand that dissolving the contract without adhering to the proper agreed process outlined within it may not be legally valid.

Please provide us with the necessary contract details, and we will be able to offer you tailored guidance and recommendations to address your specific circumstances.

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2016 Archived 

Reference given for the research at the land registry of Bahawalnagar.The overseas querent  obtained the address of the property in Pakistan. Client wanted to know if it was possible  to proceed to the research at the land registry having the address of the property? It would be important to do a land registry  check using the address of the property and the name of the dead father of the querant.Whether it was necessary to identify the real owner or the owners of the property.

Context :Inheritance Matter and Property Due Diligence for Pakistani citizens living in Italy.The querent was the law firm representing them.Records (Fard Nama) at the Land Registry and the High Court were traced.

We have previously discussed some of these points in our email communications. However, this document serves as our final opinion on the matter we have been instructed for.

Please take note of the following information regarding the land registry documents, marked as Annexure A and B. Annex A displays the titles in the names of X, son of BK, and X, daughter of BK, who hold the land titles.

In Annex B, you can review the details of the land title, which is registered under the Revenue Department of the Government of Punjab, Pakistan. Currently, the caretaker of the land is XYZ, and the contract for cultivation has been granted to the Government of Punjab, which governs all financial matters. This arrangement will remain in place until the case pending before the Honorable Lahore High Court resolves the land title issue.

Based on your instructions, we have conducted extensive research on the land registry at (name redacted) and the related case at the Lahore High Court. Our findings indicate that this land was allocated to individuals who migrated from India during the Partition of 1947 and claimed the land in Pakistan, relinquishing their titles in India. The land was allotted to various people, including BK’s family. In the 1960s, a dispute arose, leading the revenue department to reclaim certain lands, resulting in litigation.

In this specific case, actions were taken by the Pakistan Revenue Department to reclaim lands. The initial dispute was referred to the Revenue Commissioner, who subsequently forwarded it to the collector of the revenue department. Eventually, the collector confiscated all the lands involved in different parts of the Province of Punjab, including the land in question, even though it was not directly part of the dispute. The revenue department now states that they will return the land once the Lahore High Court issues its decision in this case.

It is important to note that your clients’ land is not mentioned in this case, and they have not been made parties to the litigation. In our opinion, if they request to become parties to the case, there is a good chance of reclaiming the land earlier. The issue we observe here is that your clients have not taken any steps to reclaim the land thus far.

When we spoke to (name redacted), he informed us that he consulted some lawyers from Lahore and officials from the local Revenue Department. They assured him that their land is safe and not dependent on the outcome of the pending case. According to their advice, the land will be returned once the case is decided. However, we find it perplexing that if the land is indeed safe, why has it been confiscated by the Revenue Department? Our question is why this land is not mentioned in the main case.

It is important to understand that land disputes and cases in Pakistan are not resolved easily and often take a significant amount of time. Our recommendation is to request your clients to become parties to the main case and ask the court to treat their matter separately from other disputed lands. By doing so, they can seek a court directive for the revenue department to return the land to its original owners. It is entirely up to your clients whether they wish to pursue the matter further or await the final judgment. However, we cannot provide an estimate of the duration of this process.

Currently, the land measures a total of 15 acres, out of which the revenue department has taken ten acres, while 4.75 acres remain in the name of your client(s) and their brother.

Please be advised that if your clients wish to reclaim the land, we can assist by making them parties to the main case and requesting the court to consider their land as a separate entity from the main dispute. In doing so, we can seek a court order directing the revenue authorities to return the land.

Additionally, we can offer our assistance in selling the land currently in your clients’ names by identifying suitable buyers and handling all legal formalities associated with the transfer.

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Archived from 2019

“My name is (redacted) I am a Pakistani citizen currently residing in the Middle East (Country Name redacted).My Father sadly passed away last month and has left me a property in my name in Punjab (city redacted) along with a Bank account in his name. I am his sole beneficiary without any brothers and sisters. I need help in the inheritance process and acquiring a Succession Certificate . I cannot be present currently in Pakistan due to my obligations abroad. I would provide you with all the necessary documents and perhaps set a visit in July. Please advise on the matter.”

Follow up questions :

For context the client was asked if the late father left any Will.

“….my father did not leave any Will and I am his only child along with my mother who is residing in Middle East (Country Redacted). Just for your information my father is of the Christian faith. Also my parents were divorced 20 years ago. I do have the divorce letter from Pakistan and Jordan.”

Based on the information provided, it appears that your deceased father was a “Pakistan Christian” as defined in Section 2(d) of the Succession Act, 1925. Since he had his domicile in Pakistan, the succession of his moveable and immovable property would be governed by the Succession Act, 1925, as per Section 5(2) of the Act.

As the only child of the deceased, the succession would be regulated by Section 47 of the Succession Act, 1925, making you the sole legal heir. It is well-established law that matters of inheritance and succession for Pakistani Christians are to be determined by applying the provisions of the Succession Act, 1925. This has been clarified in cases such as Inayat Bibi v. Issac Nazir Ullah (PLD 1992 SC 385) and Lilian Sen v. Mrs. Phyllis Merlin Xavier (PLD 2003 Karachi 270).

Chapter II of the Succession Act, 1925 deals with cases of intestacy for individuals other than Parsis, which includes cases of Christian intestates. Section 32 of this chapter outlines the devolution of property for intestates and provides guidelines for distribution among the spouse and kindred of the deceased.

In cases where the intestate is survived by lineal descendants, the rules for distribution are set out in Sections 37 to 40 of the Succession Act, 1925. However, since it is claimed that the deceased is not survived by any lineal descendant or other kindred except you, the distribution of the subject properties would be governed by Section 47 of the Act, making you the sole beneficiary.

Section 47 of the Succession Act, 1925 states that when an intestate has left neither a lineal descendant, nor a father, nor a mother, the property shall be divided equally between the brothers and sisters of the intestate, as well as the child or children of any deceased sibling, with such children receiving shares as if their respective parents were living at the time of the intestate’s death.

Please note that the specific application and interpretation of the Succession Act, 1925 may vary based on the circumstances and evidence presented.

For the purposes of this query the domicile of the father has been assumed as being Pakistan’s.

General advice for the public

Non-Muslim succession in Pakistan, specifically for Christians, is governed by the Christian Personal Law (CPL) and the Succession Act of 1925. These laws provide guidelines for the distribution of assets and the process of inheritance among Christians in Pakistan.

Under the CPL, Christians are allowed to make a will to determine the distribution of their assets after their demise. A will is a legal document that outlines the wishes of the deceased regarding the division of their property and assets among their heirs. It is important for Christians to draft a clear and valid will to ensure that their assets are distributed according to their wishes.

In the absence of a valid will, the Succession Act of 1925 comes into play. According to this Act, the inheritance of a Christian individual who dies intestate (without a will) will be distributed among their legal heirs. The legal heirs in this context are determined based on the rules of succession outlined in the Act.

The Succession Act of 1925 recognizes certain categories of heirs, including the spouse, children (both legitimate and illegitimate), parents, and other close relatives. The distribution of assets among the legal heirs is determined by the rules of intestate succession mentioned in the Act.

It is important to note that the laws regarding non-Muslim succession in Pakistan may vary depending on the individual’s religious affiliation. For example, Hindus and other non-Muslim minorities may have their own personal laws governing succession.

More context on Succession and Inheritance Law in Pakistan  

In Pakistan, inheritance provisions vary based on religious affiliations. Regardless of nationality or residential status, individuals of sound mind are entitled by law to inherit immovable and movable property in Pakistan. However, the specific inheritance provisions depend on whether the deceased was a Christian, Hindu, or Muslim.

Within the Muslim category, the definitions of heirs and their respective shares are determined based on their sects and sub-sects, such as Cutchi Memon, Khoja, Sunni, or Shia. The jurisdiction for property and inheritance matters depends on the domicile of the deceased.

Competent judges to handle property and inheritance issues are those located in the deceased’s last domicile. If this is disputed or unknown, the jurisdiction is determined by the location of the property. For properties situated in Pakistan, inheritance matters are addressed by a Civil District Court or a High Court.

National laws may apply to non-Muslims domiciled outside Pakistan. If a deceased foreigner who is not a Muslim is governed by a national law that states the applicable inheritance law is based on the country of domicile or the country where the deceased’s property is located, then the laws of that country will be applied in Pakistan. Therefore, if a Hindu or Christian with assets in Pakistan passes away while domiciled outside Pakistan, the courts in Pakistan would generally distribute the assets according to the provisions of the foreigner’s national inheritance law.

Muslims, whether domiciled in Pakistan or abroad, must follow Muslim Law. In matters of succession to the estate of a Muslim, the courts in Pakistan can only apply Muslim inheritance law, regardless of the domicile or nationality of the deceased. If a Muslim citizen of Pakistan dies while domiciled in a foreign country, the laws of their domicile cannot be applied to their estate in Pakistan. The Muslim Law of inheritance in Pakistan is based on the following principles:

1. There is no concept of a Will, and shares are distributed to legal heirs through intestate succession.A Muslim can only Will their land upto 1/3 of the total Estate.
2. Section 19 Succession Act 1925. Succession to moveable property in Pakistan, in absence of proof domicile elsewhere. If a person dies leaving moveable property in Pakistan, in the absence of proof of any domicile elsewhere, succession to the property is regulated by the law of Pakistan.
3. The distribution of shares depends on the closeness of the relationship between the legal heirs and the deceased. The shares vary depending on the number of children, siblings, parents, and other relatives the deceased had, and it varies from case to case.
4. In most cases, a man’s share of the inheritance is twice that of a woman’s. Any gift given by the woman’s husband is her own property, and her husband has no legal right to claim it even after marriage. Upon marriage, she is entitled to receive a marriage gift called “Mehar,” which is her own property.
5. Muslim heirs have an absolute interest in specific shares of the ancestor’s estate, even before distribution. The timing of distribution is not relevant, as succession opens based on the situation at the time of the ancestor’s death. In the event that an heir dies before distribution but was alive at the ancestor’s death, their share of the vested inheritance passes on to their heirs.
6. Muslims have the ability to donate property during their lifetime. A Pakistani Muslim can freely give away personal property before their death, and even legitimate heirs cannot challenge this decision after the donor’s death.

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