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You Can Run, You Cannot Hide

In a judgement that will constitute judicial precedent, a British Court, the High Court of Justice, Queen’s Bench Division, (Royal Courts of Justice), London ordered registration of the judgement and decree dated April 12, 1999 passed by Justice S A Sarwana of the Sindh High Court (SHC). This was in a suit filed by Habib Bank against Mian Aftab Ahmed of Firdaus Spinning and Weaving Mills Limited for approximately Rs 45 crore plus mark-up from Sept 7, 1995 under the Foreign Judgements (Reciprocal Enforcement) Act, 1933. Habib Bank had sought to register and enforce the judgement of the SHC against Mian Aftab Ahmed in the UK since he was residing and carrying on business in the UK. The registration had initially been ordered on Sept 17, 1999 when the banks outstanding claim stood at about Rs 78 crore. Obviously the amount will now be higher.

Habib Bank was represented initially in Pakistan by Liaquat Merchant Associates while the legal proceedings in the UK were filed and pursued by the Bank’s solicitor in the UK, Piers Lane of Lane and Partners in conjunction with Liaquat Merchant, Advocate as the Pakistan legal consultant of Habib Bank. Syed Sharifuddin Pirzada was also appointed as a legal consultant on the Constitutional and Public Policy Issues in Pakistan while Justice (Retd) G H Malik gave audience on behalf of HBL as the expert witness on Pakistan laws and judgments pronounced by the superior Courts of Pakistan. The Honourable Justice Carnwath held in favour of HBL in accepting that viz (1) there is nothing in Pakistani law which makes it inappropriate for the English Court to treat the judgement of SHC as incorrect (2) the judgement was not obtained by fraud and (3) the defendant had an opportunity to defend the suit before October 1999 and registration of judgement and enforcement was not opposed to Public Policy. In the Court itself HBL was represented by Alistair R MacGregor, QC. This judicial precedent will enable Pakistani banks to pursue recovery proceedings against bank loan defaulters who have fled to foreign countries. By persisting with this action despite the psychological mindblock in many quarters that loan defaulters residing in other countries have somehow become outside the pale of law because of their “successful escape” from Pakistan, a clear message has been sent to bank defaulters that given the will and persistence, they can and will be pursued wherever they are for recovery of amounts due under judgements passed by Pakistani Courts of Law.

There are three major types of secreted funds and assets abroad, viz (1) those who have taken kickbacks either directly in foreign exchange abroad, or locally and then had money transferred abroad (2) monies and assets belonging to smugglers and (3) bank defaulters who have transferred money abroad and are living in luxury, either doing business or in retirement. These must be distinguished from those Pakistani expatriates working or doing business abroad, their income is legitimate and they must be treated with respect. Before Oct 12, 1999 there was much talk about action to retrieve illegal wealth secreted abroad but unless Pakistan had physical custody of such persons it was an impossibility. Because of their own loans, very few foreign governments will take action against our “illegals” unless there was proof and what better proof than legal action in a court of law. All this takes time and patience, both of which are in short supply in Pakistan. The course of action is to make a credible case before a Pakistani court of law, obtain a decree from the court and then armed with that decree proceed the legal route in a court of law abroad. To obtain information you will have to hire a local investigation agency. All this will also cost money, another luxury that we can hardly afford but on the other hand we cannot afford not to do so. Uptil now, corruption has been rampant because white collar criminals know that once outside Pakistan, the country is helpless in trying to touch them, and in that knowledge, the country does not even try. As such whatever the cost, a clear message has to be sent to the corrupt. Take the National Accountability Bureau (NAB) and their attempt to get illegal wealth back from abroad. Inexperienced and naive but well meaning, they suggested to major investigation companies like Pinkerton’s, Kroll, etc that they should bring back illegal wealth on “commission” basis. Very politely NAB was told that such companies do not work as “bounty hunters”. Private investigation companies can ferret out details of assets/monies abroad, however once they have been located, Pakistani entities including NAB, like banks, etc will have to go to court and obtain necessary decree before taking legal action abroad against the accused. Physical custody of the accused can only be obtained once he/she is extradited to Pakistan, only then can one hope money will be brought back to Pakistan. However by the taking of court action, the accused will not be able to live a life of luxury abroad on ill-gotten wealth.

The acknowledgement by a superior British Court that a Pakistani Court’s decree can stand in UK is a major, major achievement that will become a tremendous precedent against those who have looted Pakistan at will, and in many ways. This judgement will act as a deterrent for future crooks who may be interested in looting the till in their own particular ways. For this persistence Habib Bank has to be commended. In ensuring that the laws of Pakistan are applicable against those who are living abroad but have committed white-collar crimes in Pakistan, one giant step has been taken for the rule of law in Pakistan. People who rob this country can run, they cannot hide. Moreover they will have nowhere to hide after this legal precedent. This is a landmark judgement that will put the fear of God into bank defaulters, smugglers and the corrupt alike. Other banks should be encouraged to take this route and take action immediately against the corrupt.

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