LONDON/ISLAMABAD: Pakistan has scored a legal victory in London with the British High Court ruling in its favour in a case concerning the ownership of £35 million of funds claimed by Pakistan, India and various offspring of the 7th Nizam of Hyderabad. The high court dismissed the argument made by India and the Nizam’s grandsons to strike out Pakistan’s claim on the basis that it was hopeless.

Khawar Qureshi QC, the lawyer representing the government of Pakistan, said: “This case raises very significant legal and historical issues relating to partition and its aftermath. I am pleased at the result for the government of Pakistan and we will continue to work to achieve the best outcome.”

The Foreign Office said the ruling was “a clear vindication of Pakistan’s principled stance”.

“The (British High Court) judge accepted that there was good evidence in support of Pakistan’s claim to the funds, which needed to be fully considered at a trial. The judge also accepted that there were good legal arguments which were supportive of Pakistan’s position,” it said in a statement issued in Islamabad.

The case goes back to 1948 when funds of just over £1m were deposited by the state of Hyderabad into the London bank account of the Pakistan High Commissioner, Habib Ibrahim Rahimtoola. The transfer was made as Indian troops began their annexation of Hyderabad immediately after the death of Mohammad Ali Jinnah. Interest paid on the funds means the original £1m deposit has turned into over £35m today.

The transfer was made by then Hyderabad finance minister Moeen Ali and his representative in London Mir Ali. But a week after the transfer, by which time Hyderabad was under Indian control, the 7th Nizam, Osman Ali Khan, said the payment had been unauthorised and Pakistan had no right to the money.

The British bank that held the funds said it would hold onto them until it was established who it belonged to. Over 60 years later it is still waiting for a clear ruling.

In 2013, the case became more complicated when some new claimants came forward in the form of India, the 8th Nizam of Hyderabad, his younger brother and a group of 29 people who all claimed to be the descendants of the illegitimate offspring of the 7th Nizam. The Indian government argued that since it is the successor state to Hyderabad, it should get the money.

During his lifetime, Osman Ali Khan was often described as the richest man in the world and since his death in 1967, his descendants have fought many battles for shares of his wealth.

To bolster its case, the Pakistan government engaged two researchers who reviewed British government archives for the period from 1947 onwards. They found documents showing that fearing an Indian invasion of Hyderabad, the 7th Nizam had asked Mr Jinnah to provide an airlift of weapons from Karachi to Hyderabad. A British pilot, Frederick Sidney Cotton, made at least 35 trips to the state.

The money in the London bank account, Pakistan explained, was a payment for the assistance provided to Hyderabad.

The British High Court judge, Mr Justice Henderson, accepted the evidence that the money was used: “to finance the supply of arms and other military equipment to Hyderabad through the instrumentality of Pakistan”.

The new ruling is by no means the last word in the case. It simply dismisses the claim of India and the Nizam’s offspring — advanced by no less a lawyer than former Indian Solicitor General Harish Salve — that Pakistan’s position should be dismissed without a full trial.

Justice Henderson found that, on the contrary, Pakistan had a credible case. The ruling means that unless there is a negotiated settlement there will be a full trial in six to 12 months time.

Pakistan has said it is willing to negotiate a settlement, but it is unclear this will happen.

Confirming the Pakistani offer of mediation, Pakistan High Commissioner in London Syed Ibne Abbas welcomed the ruling. “We are satisfied that the British justice system has upheld its legendary fairness and vindicated Pakistan’s position,” he said, adding: “We are confident that our principled position will prevail if the matter proceeds to trial.”

The claim would now proceed for adjudication if India persists with its position of not accepting mediation on the matter.

Pakistan had last July offered India mediation, but the latter rejected it on the pretext Pakistani claim was not valid.

“Pakistan remains committed to resolving all disputes by negotiation and believes that the path to peace and progress lies in dialogue,” the FO said while renewing the offer for mediation.

Published in Dawn, June 22th, 2016