LAHORE: The Lahore High Court has enforced a foreign arbitral award worth more than $1.4 million against Ghazi Fabrics International Ltd., rejecting the company’s argument that no valid arbitration agreement existed between it and Brazilian cotton supplier ECOM Agroindustrial Corp. Ltd.
Justice Khalid Ishaq allowed ECOM’s petition filed under Section 6 of the Recognition and Enforcement (Arbitral Agreement and Foreign Arbitral Award) Act, 2011, directing that the award be treated as a judgment and decree of the Court, enforceable against Ghazi.
The dispute arose from six contracts under which ECOM agreed to supply Brazilian raw cotton to Ghazi between 2021 and 2023. ECOM alleged that Ghazi repeatedly failed to open the Letters of Credit required to complete the purchases, forcing ECOM to close the contracts and invoice back the difference in market price, plus carrying charges, under the rules of the International Cotton Association (ICAL). When Ghazi did not participate in the subsequent arbitration, the Tribunal proceeded ex parte and awarded ECOM over $1.4 million in principal, interest and costs.
At the enforcement stage before the High Court, Ghazi raised three main objections: that the sale contracts were never signed by it and so no written arbitration agreement existed as required under the New York Convention, 1958; that procedural requirements around certified copies and authorization of ECOM’s representative were not met; and that the arbitration proceedings and award were therefore a nullity.
The Court disagreed whereas it is pertinent to mention that the case turns on one central point: an arbitration agreement does not have to be signed to be “in writing.” Article II(2) of the New York Convention explicitly recognizes an arbitration clause as valid if it is “contained in an exchange of letters or telegrams” – even without signatures. The judgment applies this rule to modern communication, holding that emails can satisfy the same requirement.
The Court found that Ghazi’s own managing director had sent emails to the ICAL Secretariat and ECOM during the dispute, discussing shipment schedules, requesting more time to open Letters of Credit, and explicitly asking to “not proceed for unnecessary arbitration.” The judgment held that these emails amounted to clear acknowledgment of the contracts and the arbitration process – even though Ghazi never signed the contracts themselves.
The Court also invoked the principle that once a challenger raises a defence to enforcement under Article V of the Convention, the burden shifts to them to prove it – and Ghazi failed to explain what its emails were referring to, if not the very contracts and arbitration it was denying.
On procedure, the Court held that Ghazi’s objections came too late: since Ghazi never contested the arbitration agreement’s validity before the Arbitral Tribunal itself, nor filed an appeal against the award under ICAL’s own rules, it could not raise the same objection for the first time at the enforcement stage.
The judgment reiterated Pakistan’s “pro-enforcement bias” toward foreign arbitral awards, meaning courts should recognize and enforce them with minimal interference, absent clear proof of one of the narrow grounds for refusal under the Convention.
Objections regarding notarization of documents were also rejected, with the Court noting that Pakistan’s accession to the Apostille Convention in 2023, and the subsequent Apostille Act, 2024, simplified the authentication process – and ECOM had duly complied by submitting apostilled documents.
The Court accordingly recognized and enforced the award as a decree, converting the matter into execution proceedings, with the case set to next appear before the Court on September 28, 2026.
SEO Title:
Meta Description: Lahore High Court enforces $1.4 million foreign arbitral award against Ghazi Fabrics, ruling emails exchanged during dispute satisfy New York Convention’s written agreement rule.
