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UK court asks Pakistan to pay $35 million to India, Pak loses Hyderabad legal case

Pakistan has now lost the decades-old Nizam of Hyderabad’s fund case after UK High Court ruled the case in favour of India on Wednesday. The case related to an amount of £35 million which was transferred to Pakistan by the then-Nizam of Hyderabad identified as Osman Ali Khan, before its annexation by India.

In the historical judgment, the UK High Court had turned down Pakistan’s claim that the fund had been planned as payment for arms shipments.

Credits: BBC

“We welcome the judgment of Justice Marcus Smith. The High Court has rightly rejected Pakistan’s claim in favour of India, and the descendants of Mir Usman Ali Khan, the seventh Nizam of Hyderabad. The family has long awaited this judgment,” seventh Nizam’s grandson Nawab Najaf Ali Khan was quoted as saying by DN.

The United Kingdom High Court upheld the claims of India in the 70-year-old fund case that is being held by the National Westminster Bank in London. The fund had been held in the High Commissioner of Pakistan to the UK, Mr. Rahimtoola’s account since September 1948.

It had been the subject of previous proceedings in 1950s in which the UK House of Lords set aside proceedings brought by the 7th Nizam claiming the fund as ‘Pakistan invoked state immunity’.

In the year 2013, Pakistan started new proceedings itself, as a result, waiving state immunity. Another new attempt by Pakistan to discontinue the proceedings was refused as an ‘abuse of process’ by the UK Court.

The Court had issued a wide-ranging judgment after analyzing documentation going back more than 70 years and also embracing the law of constructive and resulting trusts, unjust enrichment, foreign act of state, illegality and restrictions of actions.

It turned down arguments advanced by Pakistan that the debate was non-justifiable, either in whole or in part, that the doctrine of illegality by some means barred recovery. The Court held that Pakistan’s pleading of limitation was an “abuse of process”, and that remedies in trust law and restoration were available against both Pakistan and the Bank.

Having learnt that the Nizam was beneficially entitled to the Fund, the Court had come to a firm conclusion that those claiming in right of the 7th Nizam i.e. India and the 2 grandsons of Nizam have the right to have the fund.

Written by Sagar Abhinandan

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