The Trade Dispute Resolution Commission: a new route for cross-border trade claims
Pakistan has established a statutory forum for disputes arising out of the export and import of goods and services. The Trade Dispute Resolution Act, 2022 has been operationalised by the Trade Dispute Resolution Rules, 2026, notified on 25 March 2026 and gazetted on 2 April 2026.
The problem this addresses
A Pakistani exporter ships and is not paid. A Pakistani importer pays against documents and receives goods that do not conform. In both cases the counterparty is abroad, the sum matters to the business but is modest by the standards of international litigation, and the options have been foreign proceedings costing more than the claim, an arbitration clause nobody negotiated, or writing it off.
Most businesses have written it off. That is the gap this framework is built to close.
What counts as a trade dispute
Section 3(2) defines a trade dispute as any dispute or complaint concerning, relating to or arising out of the export and import of goods and services — including disputes arising with the carrier of the goods, and export and import through e-commerce — conducted wholly or partially in, or otherwise connected with, the territory of Pakistan.
Two features of that definition matter commercially. It reaches the carrier: disputes about shipment, damage in transit and delivery fall within scope, not only disputes between buyer and seller. And the connecting factor is wide — a transaction conducted only partially in Pakistan, or "otherwise connected with" Pakistani territory, is within scope.
Separately, section 3(3) allows any provision of the Act to be applied by agreement of all parties to any existing or future trade dispute, without any restriction as to territory, and section 7(2) provides that where parties have agreed to refer disputes to the Commission, those disputes are to be settled under the Act. The framework is therefore available by contract even where the territorial link would not otherwise carry it.
Section 3(4) gives the Act effect notwithstanding any other law, and section 4 provides that no court or tribunal may intervene in matters governed by the Act except as the Act provides.
Filing
Jurisdiction is engaged where the claim is not less than USD 5,000 (rule 3(1)).
An application may be presented to the Secretary, sent by registered post, sent to the designated email address, or filed online (rule 3(2)). A party outside Pakistan may refer the dispute to a Pakistan embassy or mission abroad, which is empowered to collect the documentation and facilitate filing (section 28(2)), or file through an International TDRC Support Desk (rule 3(3)).
The application sets out the parties and representatives, a concise statement of facts and the nature of the claim, the nature and extent of the breach or loss, the amount claimed, a description of the goods and services, and the prayer — with all documentary evidence relied on, the authority letter, and proof of fee (rules 3(5) and 4). Everything is in English or authenticated translation (rules 3(6) and 29).
Two cautions. The application must carry the evidence with it: the Commission examines whether the material establishes a prima facie case and rejects the application, with detailed written reasons, as soon as it is satisfied that sufficient evidence is not available (section 30). And under section 28(3) and rule 6, a referral may be refused where competing proceedings exist elsewhere, or the availability of a competent forum elsewhere makes acceptance inappropriate. A party contemplating parallel foreign proceedings should resolve that question before filing here.
On admission, the counterparty's government is told
Notice of admission is served on both parties (rule 8(1)). The Commission must then immediately inform the embassy of the country whose exporters or importers are involved (rule 8(2)), and section 31(2) requires it to inform the relevant government with a request that the complaint be forwarded to the party.
A foreign counterparty that ignores a demand letter from a Pakistani supplier is in a different position once its own government has been formally notified that it is respondent before a Pakistani statutory commission. That leverage is structural, and it operates before anything is decided.
The timetable
Reply within twenty days of issue of notice (rule 9(1)), extendable for sufficient cause. Appearance is notified immediately after the reply and may be by video conference (rule 13). The Commission then assists the parties in negotiation, to be concluded within thirty days of first appearance (rule 14; section 33(1)(a)).
Settlement that does not need to be re-litigated
Where negotiation succeeds, the parties execute a settlement agreement, binding on them, filed with the Commission. Where proceedings are online, the parties certify that an electronic agreement is binding under their local laws and no challenge may be raised in any forum merely because it is electronic (rule 14(3)).
Rule 14(4) is what gives that agreement value. Breach of the settlement can be brought back before the Commission, which will attempt amicable resolution and, failing that, treat the matter as a complaint and pass a final determination.
The settlement is supervised by a forum that can convert its breach into an enforceable determination — which is not true of a privately negotiated compromise.
The hundred-million line, and why it is not a barrier
Rule 15 fixes the minimum threshold at USD 100 million, and rule 16 read with sections 33(1)(b) and 50 provides that referral to a commercial bench of a High Court may be made only where the claim equals or exceeds it. Commercial benches are constituted by the Chief Justice of each High Court and must decide a referred dispute within four months (sections 49 and 50(2)).
The threshold is the ceiling of the Commission's own machinery, not the floor of its jurisdiction. Everything below USD 100 million is designed to be resolved inside the Commission.
Allocation, and the futility of silence
Where negotiation fails below the threshold, the Commission seeks consent to refer the dispute to conciliation, to arbitration, or to proceed to final determination; consent must be given within seven days (rule 17; section 33(1)(c)). The Commission may direct that a referred matter be concluded within a specified period, and where that period passes the proceedings terminate and the matter reverts to the Commission (section 33(2)).
If the parties cannot agree on a method within thirty days, or if a respondent fails to appear on the notified date, the Commission may proceed to a final determination of its own motion (rule 18; sections 34 and 39). Section 39 is explicit: non-appearance does not prevent a binding and valid final determination.
Declining to participate does not stall the process. It forfeits any influence over the outcome.
Interim protection
Where a final determination is likely to take time and serious or irreparable damage may occur, the Commission may — after hearing the party — issue an interim determination directing a party to do, or refrain from doing, a specified act (section 36).
Determination
Final determination follows hearings (which may be by video conference), written submissions and review of the documents (section 35(2)), and is to be reached within four months, and in no case more than six months, of initiation of proceedings (section 35(4)).
What a determination actually does
Under section 40, the Commission may in its final determination declare a party's misconduct or liability; direct a party to do or refrain from doing any act; order a fine; freeze or attach any property belonging to the party or to any person controlling it; permanently or temporarily seize the exports of an exporter from Pakistan through the Customs authorities; and request the relevant authorities in the exporter's country to resolve the dispute immediately.
Two definitions extend that reach. "Property" means movable and immovable property situated within or outside Pakistan (section 2(32)). "Freeze" includes attachment, sealing, prohibiting, holding, controlling or managing property, through a receiver or otherwise, and where necessary disposal by sale or auction (section 2(18)). Section 38 provides that these powers may be exercised within Pakistan and, so far as local law permits, in any foreign jurisdiction, with or without the assistance of a Pakistan mission.
For recovery, section 56 supplies conventional machinery of an unusually complete kind: attachment of immovable property or sale of movables including the party's bank account; appointment of a receiver; recovery as arrears of land revenue; and notices requiring any person who owes money to the party, holds money for it, or is responsible for paying it, to pay the Commission instead. A bank or other person served with such a notice that fails to comply is itself treated as a defaulter and may be penalised. For recovery purposes the Commission has the powers of a Civil Court, and it may seek the assistance of regulatory bodies including the State Bank.
And under sections 35(5) and 51(a), a party that fails to comply within the time allowed may be entered on the list of black-listed parties, published on the Commission's website and circulated to chambers of commerce in Pakistan and abroad, with foreign chambers invited to share their equivalents. The name is removed on compliance.
How much of this bites on a given respondent depends on where its assets and trade sit. The recovery machinery in section 56 — bank accounts, receivers, recovery as arrears of land revenue — operates against parties with a presence in Pakistan. Section 38 extends the powers to foreign jurisdictions only so far as local law permits, which will vary. Seizure of exports under section 40(g) reaches goods leaving Pakistan. What reaches a purely foreign respondent most directly is the blacklist under section 51(a), published and circulated to chambers of commerce abroad, and the diplomatic notification the framework builds in at several points.
The framework is new and its enforcement provisions are untested in practice. What can be said is that the statutory toolkit is considerably wider than a paper determination.
Appeal
An appeal lies to the commercial bench of the High Court within fifteen days of receipt of the final determination (section 41; rule 24). Fifteen days is short and runs from receipt.
On jurisdictional objections, section 7(1) and rule 25 give the Commission exclusive jurisdiction over all matters under the Act, including its interpretation and application. A jurisdictional challenge is argued before the Commission, not used to remove the dispute elsewhere.
Evidence, confidentiality, and a warning
The Commission has civil court powers to summon and examine witnesses on oath, compel production of documents in hard copy or electronic form, requisition public records, and receive evidence on affidavit; proceedings before it are judicial proceedings for sections 193 and 228 of the Penal Code (section 25).
Confidential information given to the Commission is not disclosable to any ministry, department or agency without the submitting party's prior consent (section 24(2)) — relevant where a claim requires disclosure of pricing or costing.
And section 57 should be read before any application is signed: knowingly or wilfully providing false, misleading or incorrect information to the Commission is an offence punishable with imprisonment up to three years, a fine up to five million rupees, or both.
Two points of caution
The Act contemplates arbitration under the Arbitration Act, 1940 (sections 23(1)(b)(iv) and 47), while the Rules provide for allocation to arbitration under the UNCITRAL Arbitration Rules (rules 2(d) and 21). Which framework governs a given reference is a question to be settled at allocation rather than assumed.
Neither the Act nor the Rules prescribes a limitation period for filing. The position on older claims should be taken specifically rather than assumed either way.
What this means
Claims previously written off may be worth re-examining. The entry threshold is USD 5,000, the cost of the neutral is shared equally (rules 20 and 22), and the framework reaches determination within four to six months of initiation.
Non-engagement by a foreign counterparty is no longer an effective answer — between government notification on admission, determination in absentia, and blacklisting circulated to chambers abroad.
The framework should now be reaching contracts, not only disputes. Given section 3(3) and section 7(2), parties can agree to this route in advance, without territorial restriction. That is a drafting decision worth taking deliberately in supply, distribution and agency agreements — and one that interacts with rule 6(c) and section 28(3), which allow a referral to be refused where a competent forum exists elsewhere.
This note describes the framework as published and is not legal advice. The Rules are recent and practice under them is developing; the position should be confirmed in relation to any specific matter. Please read our full disclaimer.