The Securities and Exchange Commission of Pakistan (SECP) has taken steps to strengthen alternative dispute resolution (ADR) mechanisms and arbitration systems to improve the settlement of commercial disputes and reduce pressure on the country’s courts.
The move aims to create a more efficient and transparent business environment while lowering litigation costs and speeding up the resolution of financial and corporate cases.
Key stakeholders discuss legal reforms
An important meeting held under the SECP brought together judges, representatives from the Ministry of Law, members of the legal fraternity, and stakeholders from the corporate sector.
Participants discussed reforms aimed at improving the country’s regulatory framework and enhancing mechanisms for resolving commercial disputes outside the traditional court system. The discussions focused on creating a faster and more effective process for handling business conflicts, which often take years to conclude through litigation.
SECP chairman calls for transparent regulatory framework
SECP Chairman Dr. Kabir Ahmed Sidhu stressed the need for a stronger and more transparent regulatory system to reduce the occurrence of business disputes. He said that a large number of cases remain pending in courts across Pakistan, including several involving the SECP itself.
According to Dr. Sidhu, excessive litigation creates delays and increases costs for businesses. He emphasized that arbitration and mediation could offer quicker and more cost-effective solutions. He noted that alternative dispute resolution mechanisms could help ease the burden on the judiciary and accelerate recoveries for businesses and investors.
Lessons from international practices
Dr. Sidhu highlighted successful international models and referred to the experience of the United Kingdom, where mandatory pre-litigation mediation has delivered positive results. He said Pakistan also plans to introduce a similar system to encourage parties to resolve disputes before taking cases to court. Such measures, he added, could help reduce the backlog of cases and improve the overall efficiency of the country’s legal and commercial framework.
Investor confidence expected to improve
The SECP chairman stated that stronger ADR mechanisms, supported by the judiciary, could bring meaningful changes to Pakistan’s legal and business landscape.
He said faster and more predictable dispute resolution would enhance investor confidence and contribute to a more business-friendly environment. Efficient mechanisms for resolving commercial disagreements are considered an important factor for attracting both domestic and foreign investment.
Special Dispute Resolution Centre planned
The SECP also announced plans to establish a Special Dispute Resolution Centre dedicated to Pakistan’s financial sector. The proposed centre will be developed in collaboration with the US Commercial Law Development Program (CLDP).
The initiative is expected to provide specialized support for resolving disputes involving financial institutions and market participants. Officials believe the centre will strengthen the country’s financial infrastructure and support broader efforts to modernize the legal framework governing corporate and financial matters.
Efforts aimed at reducing court burden
With thousands of cases pending across courts, authorities view arbitration and mediation as practical tools to address delays and improve access to justice for businesses. By promoting alternative dispute resolution, the SECP hopes to create a more efficient system that delivers faster outcomes, lowers costs, and supports sustainable economic growth.
The latest initiative reflects growing efforts to modernize Pakistan’s commercial dispute resolution framework and align it with international standards, making the country more attractive to investors and strengthening confidence in its financial sector.