In a significant decision for international commerce and arbitration, the High Court of Sindh at Karachi has recognized and moved to enforce a foreign arbitral award in favor of Porsche Middle East and Africa FZE against Performance Automotive (Pvt.) Ltd.. The judgment, issued on May 19, 2025, by Justice Muhammad Osman Ali Hadi, underscores Pakistan’s commitment as a signatory to the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958.
The case, J.M. No. 15 of 2025, involved commercial differences between Porsche, a supplier of its luxury vehicles, and Performance Automotive (Pvt.) Ltd. (PAL), a purchaser and distributor of these vehicles in Pakistan. The dispute led PAL to initiate arbitration proceedings against Porsche in the Dubai International Financial Centre – London Court of International Arbitration (now Dubai International Arbitration Centre).
During the arbitration, both parties presented their claims and cross-claims. The Arbitrator ultimately rejected PAL’s claims and some of Porsche’s cross-claims, but upheld Porsche’s claim for outstanding sums owed by PAL, awarding €199,556 and US$47,389. Additionally, Porsche was awarded €200,290, US$189,029, and AED 3,696,653 for legal costs, along with AED 549,000 for legal expenses incurred in related Pakistani proceedings, and AED 243,500 for arbitration costs, all with interest.
Justice Hadi noted the respondent’s failure to file any objections to the award despite ample opportunity over two and a half years, and highlighted the pro-enforcement bias enshrined in the 2011 Act and the UN Convention. The court emphasized that none of the exceptions for refusal of enforcement under Article V of the UN Convention applied in this case.
In a move to expedite the enforcement, the court has converted the application into execution proceedings and has ordered the attachment of four Porsche vehicles belonging to the respondent, reportedly lying at Karachi Port, to satisfy the award. The Nazir of the Court has been appointed to ascertain the status of these vehicles from Port and Customs Authorities within three weeks.
This judgment reinforces Pakistan’s legal framework for enforcing foreign arbitral awards, signaling a supportive environment for international business and dispute resolution.
