Nizam VII, Mir Osman Ali Khan (Source: Wikimedia Commons) Nizam VII, Mir Osman Ali Khan (Source: Wikimedia Commons)

Adjudicating on the 70-year-old legal dispute over 35 million pounds belonging to the Nizam of Hyderabad at the time of Partition in 1947, the UK High Court Wednesday dismissed Pakistan’s contentions to rule in favour of Osman Ali Khan’s family.

The focal point of the dispute was 1,007,940 pounds and nine shillings, which was transferred in 1948 by the then Nizam of Hyderabad Osman Ali Khan to the high commissioner in Britain of the newly-formed state of Pakistan.

That amount has since grown into 35 million pounds and the Nizam’s descendants— Prince Mukarram Jah, the titular eighth Nizam of Hyderabad, and his younger brother Muffakham Jah— who joined hands with India, claimed that it belongs to them while Islamabad counter-claimed that it was rightfully theirs. The fund is presently lying with the National Westminster Bank in London.

Pronouncing his judgment at the Royal Courts of Justice in London, Justice Marcus Smith ruled: “Nizam VII was beneficially entitled to the Fund and those claiming in right of Nizam VII – the Princes and India – are entitled to have the sum paid out to their order.”

The verdict added: “Pakistan’s contentions of non-justiciability by reason of the foreign act of state doctrine and non-enforceability on grounds of illegality both fail.”

The fund had also been the subject of earlier proceedings in the 1950s in which the UK House of Lords had set aside the proceedings which were brought by Nizam VII to claim the funds as Pakistan invoked state immunity. However, in 2013, Pakistan had waived sovereign immunity by issuing a claim for the fund that opened the way for the current case to proceed.

“Justice Smith’s judgment covers a complex historical and legal set of issues, interpreting facts and events that occurred 70 years ago to establish that the funds, which now amount to 35 million, were always held in trust for our client’s grandfather, the VII Nizam. The judgment also makes important findings on justiciability… and whether a nation-state can be a trustee,” Paul Hewitt, a partner in Withers LLP fighting the case on behalf of VIII Nizam was quoted as saying by PTI.

Commenting on the verdict, Pakistan’s Foreign Office said it would take further action after looking at the detailed judgment in the case. “Pakistan is closely examining all aspects of the detailed judgment and will take further action in light of legal advice received,” the FO was quoted as saying by PTI.

Pakistan’s legal team had claimed the fund on two alternative bases— one, referred to as the “Arms for Money Argument” which claimed that funds were transferred to compensate/reimburse/indemnify Pakistan for assistance provided in procuring/facilitating the supply or transportation of weapons. Whereas, the second ground was that the funds were transferred in order to keep them out of the hands of India, referred to by the judge, as the “Safeguarding Argument”.

Pakistan Foreign Office alleged that the ruling had failed to take into account the historical context of the transfer when “India illegally annexed Hyderabad…”

The court rejected Pakistan’s claims of illegality as it concluded that the Nizam family’s submission was well-founded, and that even if there were illegality of the nature alleged by Pakistan in the annexation of Hyderabad, it would be irrelevant to the claim.

-with PTI inputs

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