London/Islamabad: The UK High Court ruled Wednesday in favour of India and dismissed Pakistan’s claim over funds belonging to the late seventh Nizam of Hyderabad at the time of Partition in 1947 and now worth around 35 million pounds.
The ruling marks an important conclusion to the over 70-year-long legal dispute which also witnessed the Indian government, the descendants of the Nizam and the administrator of his estate burying their differences and entering into a confidential settlement agreement last year, which meant the case was effectively an India-Pakistan clash in the British courts.
The Nizam’s descendants, Prince Mukarram Jah – the the titular eighth Nizam of Hyderabad and his younger brother Muffakham Jah, joined hands with the Indian government in the legal battle against Pakistan for possession of over around 35 million pounds lying with NatWest Bank in London.
NatWest Bank held on to the funds deposited into the London bank account of then Pakistan High Commissioner Habib Ibrahim Rahimtoola in safekeeping until its rightful legal owner is established.
In his judgment handed down at the Royal Courts of Justice in London, Justice Marcus Smith ruled that the ‘Nizam VII was beneficially entitled to the fund and those claiming in right of Nizam VII – the Princes and India – are entitled to have the sum paid out to their order’.
“Pakistan’s contentions of non-justiciability by reason of the foreign act of state doctrine and non-enforceability on grounds of illegality both fail,” the verdict noted.
The dispute revolves around 1,007,940 pounds and nine shillings transferred in 1948 from the then Nizam of Hyderabad to the high commissioner in Britain of the newly-formed state of Pakistan. That amount has since grown into 35 million pounds as the Nizam’s descendants, supported by India, claimed it belongs to them and Pakistan counter-claimed that it is rightfully theirs.
“We are delighted that today’s judgment recognises His Exalted Highness the VIIIth Nizam’s rights to funds which have been in dispute since 1948. Our client was still a child when the dispute first arose and is now in his 80s. It is a great relief to see this dispute finally resolved in his lifetime,” said Paul Hewitt, partner in Withers LLP, who has acted for the VIIIth Nizam since Pakistan issued proceedings in 2013.
“Justice Smith’s judgment covers a complex historical and legal set of issues, interpreting facts and events that occurred 70 years ago to establish that the funds, which now amount to 35 million, were always held in trust for our client’s grandfather, the VIIth Nizam. The judgment also makes important findings on justiciability… and whether a nation state can be a trustee,” noted Hewitt.
In 2013, Pakistan had waived sovereign immunity by issuing a claim for the fund that opened the way for the current case to proceed. The Pakistan government’s legal team had claimed the fund on two alternative bases.
One was referred to as the ‘Arms for Money Argument’ while the second ground was that the funds were transferred in order to keep them out of the hands of India, referred to by the judge as the ‘Safeguarding Argument’”.
Advocate Harish Salve, who was part of the legal team on behalf of the Indian government, told reporters after the ruling that ‘historians will be interested in seeing Pakistan’s open acceptance that they were supplying arms. It is an interesting dimension which has publicly been acknowledged’.
PTI
