Trade Dispute Resolution

Pakistan's Trade Dispute Resolution Act, 2022, and the Trade Dispute Resolution Rules, 2026 made under it, have created a new commission — the Trade Dispute Resolution Commission — for the resolution of cross-border commercial disputes between Pakistani parties and their foreign counterparts. The implementing organisation sits under the Ministry of Commerce.

This is new machinery addressing an old problem. A Pakistani exporter who is not paid by a foreign buyer, or a Pakistani importer who receives goods that do not conform, has historically faced a choice between foreign proceedings that cost more than the claim and doing nothing at all. Most chose the second.

What it covers

Section 3(2) of the Act 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. Jurisdiction is engaged where the claim value is at least USD 5,000.

The framework is also available by agreement. Section 3(3) allows the provisions of the Act to be applied by agreement of all parties to any existing or future trade dispute without restriction as to territory, and section 7(2) provides that disputes the parties have agreed to refer to the Commission are to be settled under the Act.

How it works

The process is staged. The Commission first assists the parties in negotiation, to be concluded within thirty days of first appearance. Where that does not succeed, the dispute is allocated — with the parties' consent — to conciliation, to arbitration, or to determination by the Commission; and where the parties cannot agree, or a respondent fails to appear, the Commission may proceed to a binding final determination of its own motion.

Claims at or above the minimum threshold set by rule 15 are referred instead to a commercial bench of the High Court.

Determination is to be reached within four months, and in no case more than six months, of initiation of proceedings. An appeal lies to the commercial bench of the High Court within fifteen days of receipt.

Why it matters commercially

Cross-border commercial disputes are usually abandoned for a structural reason: the cost and uncertainty of pursuing a foreign counterparty exceeds the expected recovery. This framework alters that arithmetic — a domestic forum, staged procedure with negotiation and mediation first, costs of the neutral shared equally, and a monetary threshold low enough to reach ordinary trading disputes.

It also alters the arithmetic prospectively. Businesses trading internationally should be considering, at the contracting stage, whether their dispute resolution clauses should point here.

How we act

For complainants and respondents at every stage — assessing whether a dispute falls within jurisdiction, filing and responding, representation through negotiation, conciliation, arbitration and Commission determination, and enforcement. The firm's founding partner is an accredited mediator under the International Mediation Institute and is gazetted as a mediator under Pakistani law.

We also advise on dispute resolution clauses in supply, distribution and agency agreements, including whether and how to route future disputes to the Commission.

A fuller note on the 2026 Rules is published under Insights.