7 October 2019
TLT has secured a significant victory for the Government of India following a complex dispute that has spanned over 70 years.
The long-running dispute between the governments of India and Pakistan, and the grandsons of the Nizam VII of Hyderabad (pictured left), Prince Muffakham and Prince Mukarram, centred on the ownership of a fund of over £35 million.
The TLT team, led by Neil Meakin with support from Gary Freeman and Dixson Lee, acted for the Government of India, whose claims, together with those of Prince Muffakham and Prince Mukarram were upheld when the Judge dismissed Pakistan's claims.
Natwest had held the fund in an account in the name of Pakistan’s former High Commissioner, Habib Rahimtoola since September 1948. Ownership of the fund had been the subject of an earlier court action in the 1950s in which the House of Lords set aside the proceedings brought by Nizam VII of Hyderabad because to determine who owned the fund would have breached Pakistan’s entitlement to state immunity.
However, in 2013, Pakistan started fresh proceedings waiving state immunity as a result. Its later attempt to discontinue those proceedings was rejected by the High Court as an abuse of process and the case continued to trial in June this year.
Pakistan argued that the fund represented a payment for arms or was an outright gift to Pakistan. India and the Princes disputed this and contended that, in 1948, Nizam VII of Hyderabad was the beneficial owner of the fund, that Pakistan/ Rahimtoola held on trust for him and his successors in title.
The Judge considered the complicated historic facts of the case and ultimately rejected Pakistan's arguments that the dispute was non-justiciable, that the doctrine of illegality barred recovery and that the claims of the other parties were time barred.
He held that Pakistan’s pleading of limitation was an abuse of process; that Nizam VII was the beneficial owner of the fund and that remedies in trust law and restitution were available against Pakistan and the Bank.
The Judge further held that those claiming in the right of the Nizam - India, Prince Muffakham and Prince Mukarram - were entitled to have the fund paid out to their order.
The full judgment can be viewed here.