Force Majeure and the Coronavirus – The performance of contracts during a debilitating pandemic

The coronavirus has taken the demand and supply balance of the world by a storm and continues to cripple businesses and economies that are struggling to continue in the midst of shutdowns, disruptions, supply deficits and labour shortages. In light of this, this post discusses the effect of coronavirus on contracts and contractual arrangements between parties on a national and global level. This post discusses whether affected parties can successfully invoke a force majeure event i.e. an unforeseen event that prevents a party from fulfilling a contract that would, thereby, enable them to be released from their contractual obligations or allow them more time.

Background

The first case of the COVID-19 coronavirus was reported in Pakistan two weeks ago and has since gripped the nation in a mesh of panic, fear-mongering, propaganda and confusion. The rest of the world first heard of this virus in December last year and since then it has developed into a global threat and has been declared by the World Health Organization as a public health emergency of international concern.

As a response to the news of the outbreak in Pakistan, schools and colleges in Sindh were shut down at a first instance and recently, the offices of Engro Corp, a multinational conglomerate company, situated in an expensive area in Karachi was closed for three days.

It is foreseen that the outbreak will have substantial effect, over the coming days, upon businesses, workplaces, supply and distribution channels, labour and demand. In this light, it is important to discuss the impact that the outbreak will have on contracts and the application of the force majeure clause in such contracts.

1. Force majeure as per the laws in Pakistan

(1) Although the doctrine/term of force majeure does not have a statutory definition in Pakistan; the Islamabad High Court discussed the definitions of the same in Atlas Cables (Pvt.) Limited vs. Islamabad Electric Supply Company Limited, 2016 CLD 1833 (Islamabad). In the judgment they relied on the Advanced Law Lexicon by P. Ramantha Aiyar, 3^rd ed., that explained force majeure as “events outside the control of the parties and which prevent one or both of the parties from performing their contractual obligations; A contract provision that stipulates that unforeseen events… will excuse a party from its duty to perform the contract; A contractual provision allocating the risk if performance becomes impossible or impracticable as a result of an event or effect that the parties could not have anticipated or controlled”.

The judgment further discussed the Halsbury’s Laws of England and several cases from the superior courts in India particularly Dhanrajamal Gobindram vs. Shamji Kalidas, AIR 1961 Supreme Court 1285, where it was stated that “where reference is made to “force majeure”, the intention is to save the performing party from the consequences of anything over which he has no control”. The judgment of the Islamabad High Court concluded that “force majeure refers to legal or physical prevention and not economic profitableness”.

(2) Force majeure provisions are usually standard provisions in most contracts. In such standard provisions, a list of certain force majeure events may be provided but the lists are deemed to be inclusive and recognise that there may be such events that are not specifically part of the contract but are, nevertheless, unforeseeable and unavoidable. For example, “pandemics” are usually not specifically provided for but may be covered or addressed within other force majeure events such as government order, national emergency of Acts of God.

(3) In light of the above, what constitutes a force majeure event depends on the wording of the provision. For example, if the provision provides that the force majeure event has affected the ability of a party to perform, then such party is required to demonstrate that its performance became impossible due to the force majeure event and not just that it was difficult or costly to do so. Such provisions also, usually, require that the affected party show that it took all reasonable attempts to mitigate the event and its consequences.

2. Force majeure as per the laws of other jurisdictions

(1) English courts have consistently focused on the actual language of the provisions in contracts and have adjudicated on a case to case basis. In this regard, English courts have also found that the words in a contract, such as “prevent” or “delay” have a wider scope and force majeure may be satisfied if performance has become substantially more onerous. In this regard, the onus to prove the difficulty faced by the affected party is purely such party itself. This includes establishing that the party would have been “ready, willing and able” to perform the contract if it was not for the force majeure event. Additionally, the drafting of such provisions also includes that the affected party has taken all reasonable attempts to mitigate the event and its effects.

(2) In India, force majeure is recognised under Section 56 of the Indian Contract Act, 1872 which provides for an “”agreement to do impossible act” and gives the affected party more time to perform its obligations when events are beyond its control. In this regard, certain requisites have to be fulfilled to ensure that the event is in fact a force majeure event; these include, inter alia, that the act is beyond the control of the party, it is unforeseen and inevitable, it has rendered the contract wholly impossible, and that the suffering party exercised caution.

The superior courts in India have illustrated force majeure in different manners and on a case to case basis; some examples are as follows:

(a) In Energy Watchdog vs. Central Electricity Regulatory, Civil Appeal Nos.5399-5400 of 2016, the Supreme Court held that:

“In so far as a force majeure event occurs de hors the contract, it is dealt with by a rule of positive law under Section 56…The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view.”

(b) In Alopi Parshad & Sons Ltd. vs. Union of India, 1960 (2) SCR 793, the Supreme Court observed that:

“the [Contract] Act does not enable a party to a contract to ignore the express covenants thereof and to claim payment of consideration, for performance of the contract at rates different from the stipulated rates, on a vague plea of equity. Parties to an executable contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate, for example, a wholly abnormal rise or fall in prices which is an unexpected obstacle to execution. This does not in itself get rid of the bargain they have made.”

(3) With respect to the coronavirus being deemed to be a force majeure event in India, the Ministry of Finance vide an office memorandum on 19 February 2020 directed that all ministries treat disruptions of the supply chain due to the outbreak as a case of natural calamity and a force majeure clause may be invoked in appropriate cases.

4. Conclusion

On 3 March 2020, the China Council for the Promotion of International Trade issued more than 4,000 force majeure certificates to companies that applied for them enabling businesses in China to invoke force majeure provisions in their contracts. This, however, may have limited applicability in such contracts that are governed by other laws, for example English laws, that require specific contractual provisions and for the affected party to prove that their ability to perform the contract was made impossible by the outbreak. In recent news, Total S.A, a French multinational integrated oil and gas company, has already rejected a force majeure notice from a liquefied natural gas buyer in China (see, https://www.cnbc.com/2020/03/06/coronavirus-impact-china-invokes-force-majeure-to-protect-businesses.html).

Therefore, nations may proceed to declare the outbreak a force majeure event but the enforceability of the particular provisions continue to be governed by the governing law in the contract which may require certain requisites to be met before an affected party is provided any relief.

Photograph credit: thesun.co.uk

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Myra Khan is a Bar-at-Law from the Honourable Society of Lincoln’s Inn and Ex-Vice Chairperson Women Rights Committee of the Lahore High Court Bar Association. She is currently practicing law in Karachi, Pakistan.

Any queries may be directed to lawyereadia@gmail.com

 

Cyber crimes in Pakistan

This post is to create an awareness with respect to cyber crimes and the laws governing such crimes in Pakistan. The overarching law in this regard is the Prevention of Electronic Crimes Act, 2016 (“Act”) which addresses a wide foray of crimes including electronic fraud, unauthorized use of identity information, hate speech and terrorism. This post will address the relevant provisions in respect of:

1. Offences against the dignity of a person (Section 20 of the Act);
2. Offences against modesty of a person or a minor (Section 21 of the Act);
3. Child pornography (Section 22 of the Act); and
4. Cyber stalking (Section 24 of the Act).

A discussion on the above offences is as follows:

1. Offences against the dignity of a person

Section 20 provides that any information if transmitted or displayed, intentionally or publicly, harms the reputation or privacy of a person or is known to be false to the distributor is deemed to offend the “dignity” of such person. Such transmission of information is punishable with imprisonment for a term which may extend to three (3) years or with fine which may extend to one million (1,000,000) rupees or with both.

Under Section 20(2), an aggrieved person or his guardian, where such person is a minor, may apply to the Pakistan Telecommunication Authority (“PTA”) for removal, destruction of or blocking access to such information referred to above and the PTA, on receipt of such application, is required to forthwith pass such orders as deemed appropriate.

2. Offences against modesty of a person or a minor

Section 21 provides that whoever intentionally and publicly exhibits or displays or transmits any information which:

(a) superimposes a photograph of the face of a natural person over any sexually explicit image or video; or

(b) includes a photograph or a video of a natural person in sexually explicit conduct; or

(c) intimidates a natural person with any sexual act, or any sexually explicit image or video of a natural person; or

(d) cultivates, entices or induces a natural person to engage in a sexually explicit act, through an information system to harm a natural person or his reputation, or to take revenge, or to create hatred or to blackmail,

shall be punished with imprisonment for a term which may extend to five (5) years or with fine which may extend to five million (5,000,000) rupees or with both.

Section 21(2) provides for an increased fine and sentence in respect of an offence against a minor or a repeated offence against a minor.

Section 21 (3) provides that an aggrieved person or his guardian, where such person is a minor, may apply to the PTA for removal, destruction of or blocking access to such information and the PTA, on receipt of such application, shall pass such orders as deemed appropriate.

3. Child Pornography

Section 22(1) describes child pornography as the visual depiction of:

(a) a minor engaged in sexually explicit conduct;

(b) a person appearing to be a minor engaged in sexually explicit conduct; or

(c) realistic images representing a minor engaged in sexually explicit conduct; or

(d) discloses the identity of the minor.

Section 22 provides that a person who intentionally produces, offers or makes available such information shall be imprisoned for a term which may extend to seven (7) years or with a fine which may extend to five million (5,000,000) rupees or with both.

The mechanism for an application to the PTA by the aggrieved is similar to one provided above and detailed in Section 22(2) of the Act.

4. Cyber Stalking

Section 24(1) provides that an offence of cyber stalking is committed when a person who, with the intent to coerce or intimidate or harass any person, uses information system, information system network, the Internet, website, electronic mail or any other similar means of communication to:

(a) follow a person or contacts or attempts to contact such person to foster personal interaction repeatedly despite a clear indication of disinterest by such person;

(b) monitor the use by a person of the internet, electronic mail, text message or any other form of electronic communication;

(c) watch or spy upon a person in a manner that results in fear of violence or serious alarm or distress, in the mind of such person; or

(d) take a photograph or make a video of any person and displays or distributes it without his consent in a manner that harms a person.

Section 24(2) provides that such an offence shall be punished with imprisonment for a term which may extend to three (3) years or with fine which may extend to one million (1,000,000) rupees or with both. In the case that the victim is a minor, the term of punishment and the fine may be extended.

In light of the above, the National Response Centre for Cyber Crime (“NR3C”) was created by the Federal Investigation Agency with the mandate to manage technology based crimes. The NR3C can entertain complaints in the following categories:

(1) Unauthorized access to digital data;

(2) Email hacking or the creation of a fake ID on social media;

(3) Online fund transfer fraud; and/or

(4) Impersonation and defamation on social media.

The aggrieved, in respect of the above, can register an online complaint to the NR3C or complain directly to the Cyber Crime Zone in their area. For example, the details of the Cyber Crime Zone at Karachi are as follows:

Cyber Crime Circle Karachi (Address: 6-B, South Sunset Boulevard Phase II, DHA Karachi, Sindh, Phone No: 021-99266731, Fax No: 021-99266733)

The Cyber Crime Zones for Lahore, Rawalpindi, Peshawar and Quetta are available on the NR3C website: http://www.nr3c.gov.pk

What to do if faced with a cyber crime?

1. Register the claim by filing out the forms available on the NR3C website or email helpdesk@nr3c.gov.pk. Additionally, the aggrieved can visit the Cyber Crime Zone in his/her area and submit a written application alongwith the relevant material i.e. snapshots of the alleged perpetration, any electronic record of the same etc.
2. Upon receipt of the complaint, the helpdesk should respond within 24 hours and assign the complainant with a specific number. The number will then be forwarded to the concerned department for appropriate action.
3. If the complainant requires that a fake profile on Facebook or any obscene content on Facebook be addressed, the same can be submitted via the website. The response time of such request will, however, depend on the response time of Facebook (USA).

Relevant Case Law

1. Aamir Shamas vs. The State, 2019 PCrLJ 41 (Islamabad):

A complainant filed a complaint alleging that the petitioner has hacked her Facebook account and also created a fake Facebook account and had started blackmailing her. The petitioner had further proceeded to harass her by fabricating pictures and sending obscene/fabricated pictures to her and her family members. The court held that the petitioner had, prima facie, committed the abovementioned crimes and thereafter proceeded to reject the application for suspension of sentence as was requested for in the above petition.

2. Adnan Hafeez vs. The State, PLD 2016 Lahore 318:

The complainant submitted a complaint with the FIA that the login ID of his travel agency had been hacked and fraudulently international air tickets were issued. The prosecution collected substantive evidence connecting the petition with the commission of the offence. It was further discussed that if bail was granted to the petitioner he would tamper with the evidence and even destroy it. The court further held that “as all business dealings and transactions are done internationally through the internet, therefore, cyber crime cannot be taken lightly and the legislature should consider enhancing the sentences for such crimes”.

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Myra Khan is a Bar-at-Law from the Honourable Society of Lincoln’s Inn and Ex-Vice Chairperson Women Rights Committee of the Lahore High Court Bar Association. She is currently practicing law in Karachi, Pakistan.

Any queries may be directed to lawyereadia@gmail.com

Karachi hospitals and the resistance to providing emergency services

The recent case of the passing of ten year old Amal Umer has devastated the city. A case of the absolute failure of the system was highlighted by Amal’s mother in her heartbreaking article titled “How the system failed us” in Dawn, on 16 September 2018.

In her article she has demanded accountability and justice and in her pain she has sought the change in the system so as to ensure that no person, especially child, suffers the way hers did. This is an attempt to recognize her struggle, research the law and rights of citizens and highlight the shortfalls of the system.

I. Law

1. Following the Constitution (Eighteenth Amendment) Act, 2010 (the law commonly referred to as the 18th Amendment), the topic of health was significantly devolved from the Federal Ministry to the provincial governments. However, unlike other devolved matters, health remained a controversial one with the Federal Ministry continuing to retain control over certain matters instead of a clear devolution to the provincial governments.

2. The involvement of the police in deaths resulting from criminal activity (including road accidents) in Karachi is regulated by the Sindh Police.

3. In 2014, following a number of deaths on the roads of Karachi due to the increase in street crimes, the Sindh Provincial Assembly passed the robust Sindh Injured Persons (Medical Aid) Act, 2014 (the “Sindh Medical Act”). The salient features of the Sindh Medical Act included, amongst others, that if an injured person is brought to a government hospital recognized by the government as having emergency facilities (not all hospitals), he/she shall be provided medical aid without delay on priority basis over all other medico-legal formalities (Section 3). Moreover, no police official shall be permitted to “interrupt or interfere during the period an injured person is under treatment in a hospital except with the written permission of the incharge of the hospital” (Section 4). This permission was also restricted to such cases where it was “necessary in connection with an investigation which may be carried out in the hospital so long as the injured person is under treatment”.

The Sindh Medical Act provided, unequivocally, that “an injured person shall not be shifted from a hospital until he is stabilized or the requisite treatment is not available in such hospital and while shifting him to another hospital, the doctor concerned shall complete the relevant documents with regard to the clinical conditions of the patient and handover such documents to the concerned doctor of the receiving hospital” (Section 6(1)). Section 6(2) provided that if it was necessary to shift an injured person, such person “shall not be shifted unless he is accompanied by a doctor of the referring hospital” (proviso to Section 6(2)).

4. In addition to the above the Sindh Medical Act provided for the protection of good Samaritans that brought strangers in for medical care. This appears to endeavor to encourage bystanders to assist in emergencies without the fear that they will be harassed and interrogated upon arrival at the hospital. Section 9 provides that “a person who brings an injured person to a hospital on humanitarian basis, in particular in traffic accident cases, shall not be harassed and shall be shown due respect and acknowledged for helping the injured. He shall be allowed to leave the hospital…” after relevant details have been noted by the hospital.

5. The penalty under this legislation amounted to imprisonment, a fine or both and provided further that “the court may direct the Pakistan Medical and Dental Council… to cancel the registration of a doctor convicted by the court” (Section 11).

6. The issue with the Sindh Medical Act is that it only applies to such government hospitals that have been notified by the Sindh Government as having facilities to deal with emergencies. So far it appears there are three (3) hospitals that have been so notified, JPMC, Civil Hospital, and Abbasi Shaheed Hospital. All other hospitals, including private hospitals, are encouraged to but not bound by the abovementioned legislation.

7. These hospitals, however, are, generally, bound by the Code of Ethics for Medical Practitioners issued by the Pakistan Medical and Dental Council (“Ethics Code”) but the Ethics Code is not law. It provides for the general principles of humanitarian duties and care and provides that a physician is under a duty to “give emergency care as a humanitarian duty unless he is assured that others are willing and able to give such care” (Article 4(e)). The same is true of the Oath of Medical Practitioners which includes the promotion of good values and humanitarian duties. It, again, does not have the force of law.

II. Matters to Consider

1. There is a requirement of medico-legal services preceding emergency care provided by a hospital which often results in delayed or refused medical care due to the hesitation of the hospitals to get involved with the long and burdensome procedure of the police and other authorities.

2. There is a shortage of staff trained for medico-legal services and it is often handed over to junior doctors and trainees. Moreover, as per the law, only female medico-legal officers can check female patients reducing the number of services available.

3. The lack of ambulance services and the lack of regulatory control over the ambulance services available. There are no specific certifications or reporting requirements on companies providing emergency services and therefore, no accountability when they fail to provide the same.

4. The lack of accountability of medical practitioners.

5. The lack of successful litigation against medical practitioners.

6. The inability of the authorities to maintain a strict register of medical practitioners(private and government).

7. There is no monitor or checks and balances over certified medical practitioners and therefore, no fear of any regulatory penalties such as revocation of certificate to practice, fines etc.

8. The lack of road and traffic regulations regulating the path of ambulance services if the ambulance services respond to the emergency call.

9. The freedom of private hospitals to run as businesses rejecting emergency services or patients with low mortality.

10. A lack of checks and balances on the facilities offered by all hospitals; i.e. how many ventilators, staff, doctors, etc.

11. No accountability when a hospital transfers or orders transfer of a terminal or emergency patient to another hospital.

12. The lack of standard procedure, policies, regulations on private or semi-government hospitals.

III. Recommendations (immediate)

1. There is a dire need for the restructuring of the hospital business in Karachi.

2. The Sindh Medical Act can be used as an effective model for a similar law/regulation affecting private hospitals that should need to comply with certain basic standards of performance to remain certified as hospitals and permitted to dispense medical care.

3. The dire need to restructure road and traffic laws to make it mandatory for traffic to make way for emergency vehicles. Such amendments were approved to the Motor Vehicles Ordinance, 1965 in the Sindh Cabinet Meeting in May, 2018. So far this has not been gazetted. Beyond the reform in legislation, the implementation of the road laws by the traffic police will remain a challenge and should be pursued on a priority. The importance of the “Golden Hour” of successfully taking an emergency patient to the hospital has been recognized by various international studies.

4. Laws and regulations with respect to ambulance service providing companies. There should be a minimum requirement of the certifications/licenses received by such companies that they will comply with the best international standards of running an ambulance service, will report the responses/rejections made, will maintain a record of call-center services that receive emergency calls, will have the basic requirements of sustaining an emergency case until it reaches the hospital etc. The ambulance companies should be held to a higher standard of care and accountability.

5. With respect to licensing of doctors, the requirements are available in Pakistan but there is not much credence given to these. Like developed countries, doctors should be required undertake regular training on how to best respond in emergency cases and be held accountable to the actions taken by them under such circumstances.

6. Awareness programs should be conducted on a regular basis to highlight stories like Amal’s, to understand the failures of the system and to ensure that they are not repeated.

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Myra Khan is a Barrister-at-Law from the Honourable Society of Lincoln’s Inn and Vice Chairperson Women Rights Committee of the Lahore High Court Bar Association. She is currently practicing law in Karachi, Pakistan.

Article 2: Islam to be state religion

Constitution Series – I

Discussion on important Articles of the Constitution of Pakistan, 1973 as amended (“Constitution”)

Topic for Discussion:

Article 2: Islam to be state religion.

I. History:

It is interesting to note that the Article under discussion was not part of the Constitution at the time of partition when the constitution of India was tweaked to form the constitution of the newly founded Pakistan. There were references, however, to Islam and the importance thereof, stemming from the Two Nation Theory and the use of Islam as a catalyst to achieve partition of India. It is noteworthy that Jinnah, an eloquent and competent lawyer, did not attempt at even a basic draft of the constitution of the newly founded state, nor firmly set the ground of a secular or Islamic state.

We are all very aware of his oft-quoted speech to the first Constituent Assembly on 11 August 1947. He is quoted to have said:

“You are free; you are free to go to your temples, you are free to go to your mosques or to any other place of worship in this state of Pakistan. You may belong to any religion or caste or creed, that has nothing to do with the business of the state. … We are starting with this fundamental principle that we are all citizens, and equal citizens, of one state.”

It appears that the state Jinnah envisaged seemed to be one where “religion” would have “nothing to do with the business of the state”. Though, contrarily, Jinnah never confirmed the involvement or non-involvement of religion in the affairs of the state; whether this was due to lack of foresight or an attempt to recognize the sacrifice of the muslim majority pouring into Pakistan from India, is a matter for academics to debate and beyond the scope of this discussion.

An interesting anecdote in this regard was recalled by Mr. Yasser Latif Hamdani in his article titled “Religion under our constitution” in the Daily Times, 1 November 2014:

“As a member of the Viceroy’s Council, Jinnah, the founding father of this country, had argued in favour of the bill to allow members of different communities to marry each other without compulsorily renouncing their links with their parent community. When a law member of the council objected on the grounds that this would be un-Islamic, Jinnah opined that as a matter of policy the legislature had the right to overrule religious and customary laws where necessary or where it is a matter of public policy.”

The topic, and recognition, of Islam as a state religion, did not enter the houses of parliament up until 1962. Further along, the separation of Bangladesh sparked the debate around religion with an increased fervor. Muslim brothers had separated from Muslim brothers. The ideology that a separate state needs to be created for the Muslims came under threat. There was a separate state created, why could the Muslim brothers not live peacefully in it? The fragility of internal institutions and the involvement of outside forces is a matter of constant debate but the ideology, nevertheless, took the hit. The 1973 Constitution, as it stands today, appeared to be the carrot that the then Bhutto-led government had to hand over to the religious parties, eager to be part of the state salad. With the appropriate amendments, the 1973 Constitution included, in letter, the involvement of the religion in the state but retained its state-supreme abilities such as: (i) the laws would be made by the parliament and the parliament would be elected by the general will of the citizens of Pakistan, all citizens, irrespective of “religion, creed and caste”; (ii) the interpreters of such laws would be the Supreme Court of Pakistan and not a religious body; and (iii) the freedom to practice religion, any religion, as a citizen of Pakistan. Theory is, however, very different from practice.

II. Implications of Article 2

Article 2 appears in the introductory part of the Constitution, distinguishable from the next part on “Fundamental Rights”. It may be argued that Article 2 is a direction to the Constitution and how the citizens of Pakistan are encouraged (not forced) to live their lives. They are basic principles on good values instead of an enforcement of a way of life.

The jurisprudence of the courts, in this regard, from 1970 onwards, show a general trend of the environment of the country. The judgments range from discussing it as a way of life or an emphasis on the principles of natural justice to a harsher and stricter implementation of the same.

Today, the legal mechanism of the country is prepared to instantaneously recognize a law abhorrent to Article 2 and strike it down. Article 227 of the Constitution, read with Article 228 of the Constitution, provide, unequivocally that “all existing laws shall be brought in conformity with the injunctions of Islam as laid down in the Holy Quran and Sunnah” and “no law shall be enacted which is repugnant to such injunctions”. Moreover, Article 228 constituted the Islamic Council whose functions involve making recommendations and advising the parliamentary bodies, the assemblies, governors and the President on how to bring the laws within the injunctions of Islam.

Additionally, the injunctions of Islam are preserved in various other important laws as well, such as inter alia, in the criminality of alcohol and blasphemy laws, marriage, family and custody laws, inheritance laws, property laws, etc.

Due to Article 40 of the Constitution, the foreign affairs of Pakistan are also affected by the injunctions of Islam, in that, the state shall “shall endeavour to preserve and strengthen fraternal relations among Muslim countries based on Islamic unity, support the common interests of the peoples of Asia, Africa and Latin America, promote international peace and security, foster goodwill and friendly relations among all nations and encourage the settlement of international disputes by peaceful means.”

Arguably, the controversial Article 62 and 63, also find their basis in the Islamic influence of the Constitution.

With the inclusion of the Objectives Resolution in the Constitution vide Article 2A, the principles of Islam were reinforced as an essential, albeit introductory, component of the Constitution. Certain resolutions are stated herein below to give a synopsis of what the annexure entails:

“Whereas sovereignty over the entire universe belongs to Allah Almighty alone and the authority which He has delegated to the State of Pakistan, through its people for being exercised within the limits prescribed by Him is a sacred trust;

…. Wherein the principles of democracy, freedom, equality, tolerance and social justice as enunciated by Islam shall be fully observed;

Wherein the Muslims shall be enabled to order their lives in the individual and collective spheres in accordance with the teachings and requirements of Islam as set out in the Holy Quran and the Sunnah…”

III. Courts interpretation of Article 2 of the Constitution

1. The trends of the jurisprudence of the courts have remained fluid in the discussion of Article 2 of the Constitution, a few examples are provided to understand the variety of views of the courts:

(1) In PLD 1976 Lahore 930, the courts held that the courts could enforce only basic judicial principles and concepts of Islam where permissible by the Constitution but the entire way of life as envisaged by Islam cannot be enforced by the courts;

(2) In PLD 1983 Supreme Court 457, the courts held that the injunctions of Islam were only used as emphasis of the principles of natural justice and used as the principle of “due process” is used in the American Constitution. Article 2 was not a fundamental right as it only embodies the rule of law and cannot be used to invalidate a law but only to invalidate an action which does not have the sanction of law.

The Supreme Court in this case further held that Article 2 was not at par with Article 6 in so far as it places limitation on power of legislature to legislate so as to deprive a person of his life, liberty and property.

(3) In 1997 MLD 229 (Lahore), the Lahore High Court held that this Article being a substantive part of the Constitution, certainly has meaning, purpose and practical utility and “is singularly different from an empty slogan”. The purpose is to declare unequivocally that in the State of Pakistan, the Islamic way of life shall be following and that it shall be governing in accordance with the Islamic Sharia.

(4) The Lahore High Court in 1997 PCRLJ 1437 Lahore seemed to equate it with the general good principles of life and held that laws that promote immorality and vices are neither valid nor permissible.

(5) The Supreme Court, in PLD 1998 Supreme Court 388, held that Articles 2, 2A and 227 of the Constitution have given Islamic character to the Constitution by fully securing the independence of the judiciary and by providing that all existing laws should be brought in conformity with the injunctions of Islam as laid down in the Holy Quran and Sunnah.

2. The superior courts have remained fluid in their discussion of Article 2 and have either held that Article 2 merely introduces a good way of life or, conversely that it is the controlling provision for all the laws of the land. A study of the laws of the land suggests that in certain matters such as family, inheritance, marriage, custody, murder, rape (and other criminal provisions), the injunctions of Islam are supreme with limited involvement of the legislators. There have also been times in the history of Pakistan where the Islamic provisions of the Constitution have been held as the justification for certain diplomatic and foreign relations. In any case, a purview of history suggests that the involvement of religion is a marked diversion of the supposed (and contested) secular notion of the newly founded state in 1947; there are many academics who suggest that the involvement of religion was foreseen if not deliberately included in the affairs of the state.

With the recent, uncontested, dismissal of Dr. Atif Mian, it seems that the influence of religion is rooted in the internal workings of the state wherein even an outspoken, and valiant attempt by a democratically elected government could not sustain the pressure and had to succumb to it.

Companies Ordinance, 2016 – The progression of the companies law from 1984 to 2016

The Government has, in November 2016, promulgated the Companies Ordinance, 2016 replacing the Companies Ordinance, 1984. After various seminars, conferences, expert groups, discussions and debates, the Companies Ordinance, 2016 (the “2016 Ordinance”) was drafted, debated and promulgated. The new law encourages a movement towards simplifying certain procedures, enabling greater use of technology, and encouraging a paperless record keeping environment.

The constitution for companies and the backbone legislation for the economy has experienced a cardinal shift. The salient changes to the legislation are provided below and will be revised accordingly; the history of the law and the analysis and discussion on the projected effect will follow in a subsequent post.

1. Classification of Companies as provided by Section 224 and the Third Schedule of the 2016 Ordinance.

The Third Schedule provides for Public Interest Companies and Large Sized Companies (“PILSCs”), Medium Sized Companies (“MSCs”); and Small Sized Companies (“SSCs”). Small Sized Companies, for example, shall include private companies having (1) paid up capital up to Rs. 10 million; (2) turnover not exceeding Rs. 100 million; or (3) employees not more than 250.

The classification of a company shall be based on the previous year’s audited financial statements and can be changed if it does not fall under the previous criteria for two consecutive years.

Special provisions are provided to facilitate small and medium companies.

The 2016 Ordinance also provides for relaxations for Free-Zone Companies (Section 454) and the establishment of an Investor Education and Awareness Fund (Section 245). The 2016 Ordinance further provides for companies that are “Inactive Companies” to seek such status from the registrar to avail limited procedural and accounting requirements (Section 424).

Moreover, the 2016 Ordinance provides for streamlining lengthy processes by introducing an efficient dispute resolution mechanism through the Mediation and Conciliation Panel (Section 276), passing of members’ resolution by circulation and simplified provisions for Mergers and Acquisitions.

2. Memorandum of Association

The 2016 Ordinance requires that companies engage in such business that is the “principal line of business” (Section 26) to reduce the issues related to the doctrine of ultra vires whereby the company undertakes acts that are beyond its scope of work or powers. The principal line of business shall be mentioned in the memorandum of association or notified to the registrar.

3. Conversion of Shares into Electronic Format.

Electronic or “demat” form is the concept of dematerialization in finance and financial law and refers to the substitution of paper-form securities by book-entry securities. This is a form of an indirect holding system which is used as an intermediary, such as a broker or a central securities depository and holds the records of the ownership of the shares in an electronic format. The Central Depository System in Pakistan, established under the Central Depositories Act, 1997 has a similar system of electronic filing, record and transfer for and of securities.

4. Special provisions for Independent and Non-Executive Directors (Section 166).

The 2016 Ordinance provides for the inclusion of independent directors and non-executive directors on the Board including provisions for the manner of selection and maintenance of the data bank of such directors.

5. Increased provisions for Disclosure of Directors, and Beneficial Owners and Increased Transparency by local and foreign companies.

The 2016 Ordinance provides for increased disclosure by companies to the regulatory. It further provides for the companies to maintain a Companies’ Global Register of Beneficial Ownership (Section 452) for every substantial shareholder or officer of a company incorporated under the 2016 Ordinance, having ten percent (10%) or more shares in a foreign company or body corporate.

There is increased regulatory control vis-à-vis fraud, terrorist or corrupt financing, and money laundering.

6. Certificate of Shariah Compliance.

Section 451 enables companies to seek for a Shariah compliance certificate from the Securities and Exchange Commission of Pakistan. No company shall be permitted to be called “Shariah compliant” unless it is conducting business according to the principles of Shariah and has been so certified by the Commission.

7. Agriculture Promotion Companies (Section 457).

The 2016 Ordinance enables the registration of agriculture promotion companies for the development and enabling of the agriculture sector.

8. Table of Fees, amended, to be Paid to the Registrar.

The Seventh Schedule updates the Table of Fees to be paid to the Registrar (Section 462 and 469).

Protection of Women Against Violence – New bill passed by the Punjab Assembly

On 25 February 2016, the Provincial Assembly of Punjab passed the Punjab Protection of Women Against Violence Bill, 2015 (the “Protection Bill”).

Q. What is it?

The Protection Bill aims to make a “special provision for the protection of women”, “to protect women against violence including domestic violence, to establish a protection system for effective service delivery to women victims and to create an enabling environment to encourage and facilitate women freely to play their desired role in the society, and to provide for ancillary matters”.

Q. What is domestic violence?

Section 2 (h) defines “domestic violence” as:

the violence committed by the defendant with whom the aggrieved is living or has lived in a house when they are related to each other by consanguinity, marriage or adoption;

Section 2 (r) defines “violence” as:

any offence committed against a woman including abetment of an offence, domestic violence, emotional, psychological and verbal abuse, economic abuse, stalking or a cybercrime;

Q. What are the other key definitions of the Protection Bill?

The following definitions, in Section 2, are key:

(a) “aggrieved person” means a woman who has been subjected to violence by a defendant;

(e) “dependent child” means a child who is below the age of twelve years of age and includes any adopted, step or foster child;

(j) “house” includes a place where the aggrieved person lives in a domestic relationship irrespective of right to ownership or possession of the aggrieved person, defendant or joint family;

Q. What are the plans for implementation?

For implementation, Section 3 provides that the Government shall, amongst others:

(a) institute (establish) a universal toll free dial-in-number for the aggrieved persons;

(b) establish Protection Centres and shelter homes under a phased programme;

(c) appoint necessary staff at a Protection Centre for mediation and reconciliation between the parties, rescue, medical examination, medical and psychological treatment and legal help of the aggrieved persons and proper investigation of offences committed against aggrieved persons;

(d) raise awareness about the issues involving women and the requirements of protection and relief of the aggrieved persons.

Q. What steps should be taken to seek protection and what happens then?

1. The aggrieved person, or any other person authorized by the aggrieved, or a Women Protection Officer, appointed under Section 14 of the Protection Bill, may submit a complaint for obtaining a protection, residence or monetary order for the aggrieved.

2. The relevant court shall be (1) where the aggrieved resides or carries on business; (2) where the defendant resides and carries on business; (3) where the aggrieved and the defendant last resided together.

3. The court shall then start proceedings not more than seven (7) days of the date of receipt of the complaint by the court.

4. The defendant shall be notified to show cause (appear in court) within seven (7) days. If a defendant fails to respond within the specific time, the court shall, subject to another notice to the defendant, assume that the defendant has no plausible defense and proceed to pass such order as the court deems fit.

Q. How will the court protect the victim.

1. Protective Order: If the court is satisfied that any violence has been committed, or is likely to be committed, the court may pass a protection order in favour of the aggrieved person and direct the defendant to, inter alia, not communicate with the victim, stay away from the victim, stay at a particular distance from the victim, wear an ankle or wrist GPS tracker to track the movement of the defendant at all hours, surrender any weapons, refrain from entering the place of employment of the victim, refrain from causing or aiding or abetting any act of violence; and/or refrain from committing such acts as may be specified in the protection order.

2. Residence Order: In the event of domestic violence, the court may pass a residence order directing that, inter alia, the victim shall not be evicted from the house, the victim has the right to stay in the house, the defendant shall not sell or transfer the house to any person other than the victim, the victim may be relocated to a shelter home (established under Section 13 of the Protection Bill), and/or the victim be relocated to some alternative accommodation.

3. Monetary Order: The court may also pass a monetary order ordering the defendant to pay monetary relief to meet the expenses incurred and losses suffered by the defendant which may include, inter alia, loss of earning, medical expense, damages for destruction of property, and/or maintenance of the victim and her dependent children.

Q. Where does the aggrieved person go during proceedings?

Under Section 5 of the Protection Bill, the victim shall not be evicted from the house without her consent.

Q. What are some of the shortfalls of the Protection Bill?

Some shortfalls are:

1. The offender, it appears, can only be a person who is known to the victim by consanguinity, marriage, or adoption and does not cover such relations that the victim may have to face on a day to day but do not fall within this category, such as relatives-in-law.
2. The legislation only provides for domestic violence against women; whereas, men may also be victims of domestic violence.
3. The stringent timelines in the Protection Bill places a heavy burden on the courts without any mechanism of assistance to the courts.
4. The requirement to consistently monitor protection officers to ensure that such officers do not add to the distress and instead handle issues with care, empathy, and efficiency.
5. Regular training to the toll-free number representatives to ensure that they are able to provide advice in a quick and efficient manner, respect anonymity, and are available round the clock.
6. The legislation does not cover dowry and the culpability of giving or receiving the same. The analogous legislation in India, Protection of Women from Domestic Violence Act, 2005, criminalized the offence of giving and receiving dowry.
7. The need for mechanisms to ensure that this legislation is not misused, for example, verbal abuse is a wide term to report violence. Such mechanisms, though, should not be at the cost of restricting, reserving or downplaying genuine cases of violence against women and should not give too much discretion to the reporting officers.
8. Custody of children should have been included in the legislation to ensure that the victim is not deprived of full right to her children.
9. The legislation appears to have the limited scope of civil instead of (the more preferable) criminal law. Criminal sanctions (arrest and imprisonment) require a further offense by the accused respondent (such as violating a protection order issued under this law). This may, however, be a deliberate factor of the legislators to ensure quick and flexible relief for the victim.

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Myra Khan is a Barrister-at-Law from the Honourable Society of Lincoln’s Inn and (ex) Vice Chairperson Women Rights Committee of the Lahore High Court Bar Association. She is currently practicing law in Lahore, Pakistan.

Any queries may be directed to lawyereadia@gmail.com

Whistleblower Protection in Pakistan

A whistleblower is a person who raises concern or awareness about a wrongdoing in their workplace, either state or private. 

In the recent years, with the testimonies of Edward Snowden (an American computer professional, former CIA and US Government employee who copied classified information from the United States National Security Agency (the “NSA”) in 2013 without prior authorization. This information revealed numerous global surveillance progams and brought the issue of privacy, security and surveillance to global discussion), Julian Assange (the founder of Wikileaks that publishes secret information, news leaks, and classified media from anonymous sources), and Bradley Manning (a US army officer who disclosed information to Wikileaks), whistleblowing has become a much discussed topic receiving equal amounts of support and opposition.

Whistleblowing, however, has been practiced for centuries. From the Ramayana, where Vibhishan, younger brother of the King of Lanka, Ravana, informs Ram about the whereabouts of Sita, the consort of Ram, to the Watergate scandal that toppled the presidency of Richard Nixon on the information provided by a secret informant known as Deep Throat (revealed in 2005 as Mark Felt). Whistleblowing has grave consequences for the accused and the accuser. The whistleblower, though seemingly working for the greater good, is oft seen as dangerous and misguided (e.g. why did he have to make the information public, why didn’t he use the correct mechanisms) and forced to live either in hiding, never revealing his identity, or in exile.

In Pakistan, there is no specific legislation on whistleblower protection on a Federal level. Within the provinces, only Khyber Pakhtunkhwa, vide the Khyber Pakhtunkhwa Right to Information Act, 2013 (the “KPK 2013 Act”), provisions for the protection of whistleblowers (Section 30). Section 30 of the KPK 2013 Act provides for protection of whistleblowers as follows:

30. Whistleblowers.—(1) No one may be subject to any legal, administrative or employment related sanction, regardless of any breach of a legal or employment obligation, for releasing information on wrongdoing, or which would disclose a serious threat to health, safety or the environment, as long as they acted in good faith and in the reasonable belief that the information was substantially true and disclosed evidence of wrongdoing or a serious threat to health, safety or the environment.

(2) For purposes of sub-section (1), wrongdoing includes the commission of a criminal offence, failure to comply with a legal obligation, a miscarriage of justice, corruption or dishonesty, or serious maladministration regarding a public body.

The other provinces also have similar acts: Punjab has the Right to Information Act, 2013; Balochistan has enacted the Freedom of Information Act, 2005; and Sindh has enacted the Sindh Freedom of Information Act, 2006 (collectively referred to as the “Acts”). However, there is no provision in the Acts which is analogous to Section 30 of the KPK 2013 Act or provides for protection of whistleblowers.

The fate of whistleblowers is, therefore, left to the jurors deciding each case upon its facts. The following factors act as a deterrent against whistleblowing:

1. Red-tapism; no outcome of the complaint made using the correct procedures, if any, available.
2. Defences, such as national security, interest of the state, and confidentiality obligations, argued, usually successfully, by the accused.
3. No procedure for the protection of the identity of the whistleblower.

The Eighteenth Amendment to the Constitution of Pakistan, 1973, with the insertion of Article 19A, allowed citizens the right to have access to information in all matters of public importance. The Eighteenth Amendment was an attempt to bring information “in all matters of public importance” to the public sphere. Public bodies, officials, institutions were now required to record, store and be accountable for the information used and processed by them. Unfortunately, the Eighteenth Amendment was qualified with the proviso “subject to regulation and reasonable restrictions imposed by law” that resulted in curtailing the rights of citizens. The proviso provided an opening for the holders of information to restrict access. The only remedy available to citizens seeking information under Article 19A is challenging any refusal in the courts which include the usual issues with court proceedings, i.e. years of litigation, costs, waste of time, etc.

The text of Article 19A is as follows:

19A. Right to information.−Every citizen shall have the right to have access to information in all matters of public importance subject to regulation and reasonable restrictions imposed by law.

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Myra Khan is a Barrister-at-Law from the Honourable Society of Lincoln’s Inn and Vice Chairperson Women Rights Committee of the Lahore High Court Bar Association. She is currently practicing law in Lahore, Pakistan.