High Commissioner for Pakistan in the United Kingdom v Prince Mukkaram Jah, His Exalted Highness the 8th Nizam of Hyderabad

Summary disposal is inappropriate where the outcome depends on inferences from a complex historical record, disclosure or cross-examination. A claim should proceed to trial if it has a realistic prospect of success, even though the opposing evidence is substantial. The act of state or non-justiciability doctrine is a substantive limit on the court’s competence and cannot be waived by the state. Limitation legislation does not necessarily exclude the court’s inherent power to prevent a defendant relying on limitation where that reliance may itself abuse the court’s process. Claims alleging resulting trusts or constructive trusts of the de facto trustee kind are not subject to the ordinary six-year limitation period. A restitutionary claim against a bank holding disputed funds remained sufficiently arguable for trial.

The proceedings concerned competing claims to approximately £35 million held by National Westminster Bank in an account opened in 1948 in the name of the then High Commissioner for Pakistan. Pakistan claimed beneficial ownership. India and the Princes claimed the fund through the 7th Nizam of Hyderabad, and India also claimed directly against the Bank.

The court heard cross-applications for summary judgment and strike-out concerning beneficial ownership, act of state and non-justiciability, limitation and abuse of process, trust and restitutionary claims, and India’s claim against the Bank. The central question was whether any material issue could be determined without a trial.

1. Summary disposal. The applications were dismissed except that, in principle, Pakistan’s limitation defence to the trust claims of India and the Princes was held to have no real prospect of success and should be struck out. The court left open whether case-management considerations warranted deferring that order.
2. Pakistan’s beneficial-ownership claim. The claim could not safely be characterised as having no real prospect of success. The evidence permitted a realistic inference that the governments of Hyderabad and Pakistan intended the transfer to confer beneficial ownership on Pakistan, rather than create a trust or agency. The issue depended on a unique historical context, further disclosure and evaluation of evidence at trial.
3. Act of state and non-justiciability. The doctrine is a substantive rule concerning the court’s adjudicative competence, unlike sovereign immunity, which is a procedural bar capable of waiver. Pakistan was therefore entitled to plead it, and doing so was not an abuse merely because Pakistan had commenced the proceedings or had not raised the doctrine in earlier litigation. The possible governmental character of the transactions could not be excluded summarily. Their international character also meant that territoriality could not by itself defeat the plea.
4. Limitation. Limitation defences are permissive and procedural. Although statutory periods and extension provisions are comprehensive, the court’s inherent jurisdiction may in principle prevent reliance on a limitation defence which is abusive. Resulting-trust claims and constructive trusts involving persons who intended to act as trustees fall outside the six-year limitation period under section 21 of the Limitation Act 1980.
5. Restitution and the Bank. The section 5 limitation issue for the restitution claims was treated as settled in principle, but the effect of sovereign immunity and the related abuse question required trial. India’s claim against the Bank remained arguable because authority recognised possible restitutionary liability where funds credited to a customer’s account had not become irreversible.