London high court rules in favour of Hyderabad Nizam in £35m legal battle

LONDON: The High Court in London has settled a decades-old dispute over a deposit left in a NatWest bank account by Hyderabad’s last monarch around the time of the partition of India.

The last Nizam of Hyderabad transferred £1 million into the account—which has since grown with interest to £35 million—as the Indian Army invaded the state in 1948, about one year after India gained independence from British rule.

In a dispute lasting more than 70 years, which was considered by the House of Lords in 1957, the Nizam’s heirs and the governments of India and Pakistan all claimed they were entitled to the money.

But, in a lengthy written ruling issued on Wednesday, Mr Justice Marcus Smith concluded it should go to the grandsons of the Nizam. The judge concluded that the Nizam’s “motivation” for the transfer was to “keep the fund away from India—to safeguard it”.

He added: “That motivation arose from the Nizam’s ... views as regards India’s intentions toward Hyderabad.” The Nizam was the absolute ruler of Hyderabad from 1911 until 1948 when it was one of pre-independence India’s princely states—areas with native rulers which had treaties with the British.

He made the transfer to the account, which was in the name of the then High Commissioner of recently-formed Pakistan in London, days after his army surrendered to India following the annexation of Hyderabad.

A letter to the High Commissioner from Hyderabad’s finance minister, which was part of the evidence in the case, read: “In view of the situation that is now developing in Hyderabad and in order to safeguard the interests of the state, I would be very grateful if you would kindly agree to permit the transfer into your account of just over one million pounds sterling that is now lying at the credit of the Nizam’s Government in the Westminster Bank, London.

“This amount may kindly be kept by you in trust.”The Nizam, who died in 1967, made an attempt to recover the money shortly after the transfer was made, triggering the row over its ownership. A legal battle over the ownership of the funds in the 1950s came to a halt when Pakistan asserted sovereign state immunity—which was upheld by judges in the House of Lords.

The proceedings were revived in 2013 after Pakistan waived the immunity and brought a claim against NatWest, which said it would pay the funds to whoever the court ordered.The Nizam’s heirs reached a confidential settlement with the Indian government last year as to how the funds would be distributed in the event they won their case.

Philip Barden, partner at Devonshires law firm—who represented one of the Nizam’s heirs, said: “This was an unusual and fascinating case that required the court to delve into the history books and reconstruct events that took place over 70 years ago, around the time of the partition of India and annexation of Hyderabad.”

Meanwhile, Pakistan’s Foreign Office said on Wednesday the ruling by the High Court in London on the Hyderabad Fund case ignored the historical context of transfer as India illegally annexed the princely state in violation of international law.

“The ruling does not take into account the historical context of the transfer when India illegally annexed Hyderabad in violation of International Law and all civilized norms, leading the Nizam of Hyderabad to make desperate efforts to defend his people and the state from Indian invasion,” a Foreign Office statement said. It added Pakistan was closely examining all aspects of the detailed judgment of Hyderabad Fund case and would take further action in light of legal advice.