ISLAMABAD: Lahore High Court (LHC) on Thursday upheld the legality of the PIA privatisation process, validating the advertisements and valuations undertaken, while reminding that the judiciary’s role is to safeguard legality and transparency, not to obstruct government policy in the absence of illegality.
In a significant ruling with wide-ranging implications for Pakistan’s economic reform agenda, the LHC, Rawalpindi Bench, delivered a detailed judgement on the privatisation of Pakistan International Airlines Corporation Limited (PIACL).
The judgement, authored by Justice Jawad Hassan, addresses challenges raised in a pro bono publico petition questioning the transparency and legality of the privatisation process of the national flag carrier.
The writ petition was filed by a practicing advocate, Sardar Amber Maqood, who argued that the Privatisation Commission failed to comply with the statutory requirements of Sections 23 and 24 of the Privatisation Commission Ordinance, 2000. The petitioner alleged that notices of intent to privatise PIACL were not properly published and that the airline’s assets had not been transparently evaluated, thereby violating constitutional guarantees of fairness and the public’s right to information.
The petition sought to restrain the Privatisation Commission and the federal government from proceeding with the privatisation of PIA until a Privatisation Appellate Tribunal was constituted, and demanded disclosure of the full record of the airline’s assets.
The petitioner’s counsel contended that the lack of proper advertisement and valuation rendered the privatisation process unlawful. On the other hand, the federation and the Privatisation Commission, represented by senior counsel, Barrister Sardar Kalim Ilyas, rejected these claims. They argued that international advertisements had been published in Financial Times, China Daily and The Wall Street Journal, alongside leading Pakistani dailies including Dawn, Business Recorder, Jang and Express.
The Privatisation Commission further disclosed that financial advisory services had been contracted to Ernst & Young Consulting LLC, Dubai, to conduct the valuation of PIACL’s assets in line with statutory requirements. It was also pointed out that the bidding process had already been annulled, rendering the petition largely infructuous.
The Competition Commission of Pakistan also submitted its assessment, confirming that the transfer of non-core assets into a holding company raised no competition concerns, thereby paving the way for the proposed restructuring.
In his meticulously reasoned 70-plus page judgement, Justice Jawad Hassan emphasised that privatisation has remained a cornerstone of Pakistan’s economic policies for decades, and courts are not to interfere in executive decision-making unless there is a clear violation of law or fundamental rights.
The LHC noted that advertisements had indeed been published both nationally and internationally, fulfilling the mandatory requirements of Section 23. Likewise, the appointment of Ernst & Young as financial advisors satisfied the independent valuation criteria of Section 24. Thus, the court held that the Privatisation Commission had complied with its statutory obligations.
On the petitioner’s request for full disclosure of asset valuations, the court observed that such documents fall within the category of “confidential” under the Privatisation Commission’s Confidentiality Regulations of 2003, and cannot be released publicly except under narrowly defined circumstances.
Perhaps the most important aspect of the judgement lies in its reaffirmation of judicial restraint in matters of economic policy. Justice Jawad Hassan warned against the dangers of excessive judicial intervention in privatisation and foreign investment matters, noting that such actions create regulatory uncertainty and undermine investor confidence.
He cited Supreme Court precedents such as Dr Akhtar Hassan Khan vs Federation of Pakistan (2012 SCMR 455) to stress that policy choices, especially in financial and contractual domains, rest with the executive branch. Courts, he observed, lack the technical expertise to substitute their own preferences for government policy unless there is arbitrariness, mala fides, or violation of constitutional guarantees.
