Substantive reform of the commercial judicial system is vital for fostering a business environment capable of attracting sizeable investment. Without closing the investment gap, translating headline economic recovery into improved lived realities for the wider population will remain difficult.

Investors do not necessarily fault the commercial legal framework itself for eroding confidence, but they express deep frustration with the slow and uneven delivery of justice, which can undermine business viability. Concerns centre on weak enforcement, heavy case backlogs, limited specialised training of judges in commercial law, lack of prioritisation, and perceptions of nepotism and corruption.

These structural weaknesses are widely cited as deterrents for major investment decisions, particularly by multinationals and foreign companies evaluating Pakistan as a destination for large-scale projects.

Confirming investor sentiment, Overseas Investors Chamber of Commerce and Industry (OICCI) Secretary General Abdul Aleem noted that members are not broadly satisfied with how commercial disputes are handled in Pakistan. The OICCI has over 200 member companies (many Fortune 500 firms), operating in Pakistan across 14 diverse sectors.

Resolving a typical commercial dispute in Pakistani courts takes over five years, while only a small fraction settle within one to three years

He cited the OICCI Perception and Investment Survey 2025, which found that half the respondents view Pakistan’s contract enforcement framework as inadequate, while only about a quarter rate it positively. “Businesses acknowledge that the legal framework may align with international standards, but enforcement is seen as weak and inconsistent due to judicial delays, procedural complexity, case backlogs, and post-judgement enforcement is challenging,” he said.

Mr Aleem mentioned cost as another concern. “While attorney and court fees are generally perceived as manageable, enforcement-related expenses continue to weigh heavily on investors assessing the effectiveness of commercial dispute resolution in Pakistan.”

Legal expert Abdul Moiz Jaferii, commenting on the efficiency of commercial dispute resolution, highlighted notable provincial variation in the judicial framework. “In Punjab, dedicated commercial courts have been established where relatively competent judges are deputed to expedite matters. These courts tend to discourage unnecessary adjournments and move cases forward more decisively than the regular system.

“Judges receive specialised training, and the overall standard of the subordinate judiciary in Punjab is generally better than other provinces. Even where error occur, appellate forums, including the High Court, provide avenues to address complex commercial issues more effectively,” he stated.

He further noted, however, that legal protection costs in Pakistan are typically lower than in more established jurisdictions, largely because the system is less structured. “Lawyers often focus on securing interim relief — such as stay orders — which can then be used to negotiate outcomes rather than pursue prolonged litigation. With limited reliance on billable-hour models common in developed markets, legal costs are generally less of a deciding factor here,” he explained.

A leading corporate lawyer, speaking privately, expressed frustration over what he described as a lack of judicial focus in commercial matters. He pointed to a tendency, at times even at higher tiers, to decide cases without a full grasp of their commercial complexity.

“In disputes involving foreign investors and local firms, the playing field can feel uneven,” he said. “Local business interests are often perceived to wield greater informal influence, while multinationals operate within stricter compliance regimes. This asymmetry can shape both perceptions and outcomes in litigation.”

Pakistan’s courts are estimated to be burdened with around 2.4 million pending cases, with no standard timeline for resolution. Efforts to identify how many of these involve commercial disputes were inconclusive, as disaggregated data is not readily available. Many legal practitioners, however, believe purely commercial cases account for less than 10 per cent of the total once family property and assets disputes are excluded.

According to last year’s OICCI survey, more than half of the respondents indicated that resolving a typical commercial dispute in Pakistani courts takes over five years, while only a small fraction settle within one to three years. The most significant delays occur during trial, judgement and enforcement stages.

Mr Jaferii argues that most pending cases in Pakistan stem from property disputes, driven by weak land record systems and the absence of fully digitised, title-based registration. Multiple claimants of the same plots often prolong litigation for years, with little deterrence, as perjury is rarely punished. This sustains a cycle of contested claims.

He believes genuine commercial disputes form a small share of pending cases. “Many so-called corporate cases are in fact family asset conflicts, such as siblings contesting control of inherited companies, disguised as company matters.”

“True commercial disputes over contracts or transactions seldom reach courts,” he notes, “Parties capable of structuring complex agreements typically rely on arbitration or mediation mechanisms. Merchant communities often resolve conflicts through informal yet structured dispute-resolution systems, reflecting a broad preference to avoid courts, where resolution is widely perceived as slow and uncertain.”

Experts note that a litigant’s financial strength in Pakistan can significantly shape the outcomes by enabling access to stronger legal representation and more assertive strategies. “If you can afford to engage multiple lawyers, even beyond necessity, you are more likely to keep the wheels of justice moving faster than would otherwise be possible,” one lawyer observed.

A senior corporate lawyer offered a more nuanced view. “If money alone could secure legal protection, large multinationals would operate independently on the strength of their brands,” he said. “The fact that global companies often enter Pakistan through joint ventures reflects a different reality. In markets like ours, capital and brand value are not enough; access to power corridors, networks, and political understanding also matter for navigating the business environment.”

He noted that multinationals frequently partner with influential local business groups precisely for their ability to engage with institutional and policy stakeholders.

Published in Dawn, The Business and Finance Weekly, March 2nd, 2026