The UK High Court Wednesday ruled in favour of India and the grandsons of the last Nizam of Hyderabad in a decades-old legal dispute with Pakistan over funds belonging to the Nizam at the time of Partition and deposited in a London bank account.
The Nizam’s descendants, Prince Mukarram Jah, the titular eighth Nizam of Hyderabad, and his younger brother Muffakham Jah, had joined hands with the Indian government in the legal battle against the Pakistan government over some 35 million pounds lying with the National Westminster Bank in London.
In his judgment handed down at the Royal Courts of Justice in London, Justice Marcus Smith ruled that the “Nizam VII was beneficially entitled to the Fund and those claiming in right of Nizam VII — the Princes and India — are entitled to have the sum paid out to their order”.
“Pakistan’s contentions of non-justiciability by reason of the foreign act of state doctrine and non-enforceability on grounds of illegality both fail,” the order stated.
The dispute revolves around 1,007,940 pounds and nine shillings transferred in 1948 from the then Nizam of Hyderabad to the High Commissioner in Britain of the newly-formed state of Pakistan. That amount has since grown to 35 million pounds. The Nizam’s descendants, supported by India, claimed it belongs to them but Pakistan said it is rightfully theirs.
In New Delhi, the Ministry of External Affairs said: “The Fund had been held in the account of the High Commissioner of Pakistan to the UK Rahimtoola since September 1948. It had been the subject of earlier proceedings in 1950s in which the UK House of Lords set aside proceedings brought by the 7th Nizam of Hyderabad claiming the Fund as Pakistan invoked state immunity.”
In 2013, Pakistan commenced fresh proceedings, thereby waiving state immunity. A subsequent attempt by Pakistan to discontinue the proceedings was rejected as an abuse of process by the UK Court.
“The Court has issued a wide-ranging judgment today after analysing documentation going back more than 70 years and embracing the law of constructive and resulting trusts, unjust enrichment, foreign act of state, illegality and limitation of actions. The Court rejected arguments advanced by Pakistan that the dispute was non-justiciable, either in whole or in part; that the doctrine of illegality somehow barred recovery; or that the claims of other parties were time barred. The Court held that Pakistan’s pleading of limitation was an ‘abuse of process’, and that remedies in trust law and restitution were available against both Pakistan and the Bank,” the MEA statement said.
“Having found that the 7th Nizam was beneficially entitled to the Fund, the Court concluded that those claiming in right of the 7th Nizam i.e. India and the two grandsons of Nizam were now entitled to have the Fund,” the MEA said.
Paul Hewitt, partner in Withers LLP, who have acted for the VIII Nizam since Pakistan issued proceedings in 2013, said: “We are delighted that today’s judgment recognises His Exalted Highness the VIII Nizam’s rights to funds which have been in dispute since 1948. Our client was still a child when the dispute first arose and is now in his 80s. It is a great relief to see this dispute finally resolved in his lifetime.”
“Justice Smith’s judgment covers a complex historical and legal set of issues, interpreting facts and events that occurred 70 years ago to establish that the funds, which now amount to 35 million, were always held in trust for our client’s grandfather, the VII Nizam. The judgment also makes important findings on justiciability… and whether a nation state can be a trustee,” he noted.
Commenting on the ruling, the Pakistan Foreign Ministry in Islamabad said it would take further action after examining the detailed judgment. It also said that the ruling failed to take into account the historical context of the transfer when India “illegally” annexed Hyderabad.