India wins Hyderabad Nizam's £35m fund case against Pak

Pakistan has lost the decades-old Nizam of Hyderabad's fund case after a High Court in the United Kingdom ruled in favour of India on Wednesday. The case pertains to an amount of £35 million transferred to Pakistan by the then-Nizam of Hyderabad, Osman Ali Khan, before its annexation by India.

In the historical judgment, the UK High Court rejected Pakistan's claim that the fund had been intended as payment for arms shipments or as an outright gift. The Court held that beneficial ownership in the fund as at 1948 lies with the seventh Nizam Usman Ali, and that it had been held in trust to his benefit and that of his successors in title since then.

“We welcome the judgment of Justice Marcus Smith. The High Court has rightly rejected Pakistan's claim in favour of India, and the descendants of Mir Usman Ali Khan, the seventh Nizam of Hyderabad. The family has long awaited this judgment,” seventh Nizam’s grandson Nawab Najaf Ali Khan told DH.

The UK High Court upheld the claims of India in the 70-year-old fund that is being held by the National Westminster Bank in London. The fund had been held in the High Commissioner of Pakistan to the UK, Mr. Rahimtoola's accound since September 1948. It had been the subject of earlier proceedings in 1950s in which the UK House of Lords set aside proceedings brought by the seventh Nizam claiming the fund as Pakistan invoked state immunity.

In 2013, Pakistan commenced fresh proceedings itself, thereby waiving state immunity. A subsequent attempt by Pakistan to discontinue the proceedings was rejected as an abuse of process by the UK Court.

The Court issued a wide-ranging judgment after analyzing documentation going back more than 70 years and embracing the law of constructive and resulting trusts, unjust enrichment, and foreign act of state, illegality and limitation of actions.

It rejected arguments advanced by Pakistan that the dispute was non-justifiable, either in whole or in part; that the doctrine of illegality somehow barred recovery; or that the claims of other parties were time barred. The Court held that Pakistan's pleading of limitation was an "abuse of process”, and that remedies in trust law and restitution were available against both Pakistan and the Bank.

Having found that the Nizam was beneficially entitled to the Fund, the Court concluded that those claiming in right of the seventh Nizam i.e. India and the two grandsons of Nizam were now entitled to have the fund.