Nizam fund: UK High Court rules in favour of India

The UK High Court on Wednesday ruled in favour of India and dismissed Pakistan’s claim over funds belonging to the late 7th Nizam of Hyderabad at the time of Partition in 1947 and now worth around 35 million pounds.

The ruling marks an important conclusion to the over 70-year-long legal dispute which also witnessed the Indian government, the descendants of the 7th Nizam and the administrator of his estate burying their differences and entering into a confidential settlement agreement last year, which meant the case was effectively an India-Pakistan clash in the British courts.

The Nizam’s descendants, Prince Mukarram Jah — the titular eighth Nizam of Hyderabad — and his younger brother Muffakham Jah, joined hands with the Indian government in the legal battle against Pakistan for possession of over around 35 million pounds lying with NatWest Bank plc in London. NatWest Bank held on to the funds deposited into the London bank account of then Pakistan High Commissioner Habib Ibrahim Rahimtoola in safekeeping until its rightful legal owner is established.

In his judgment handed down at the Royal Courts of Justice in London, Justice Marcus Smith ruled that the “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”.

“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 verdict noted, in a setback to Pakistan. The dispute revolves around 1,007,940 pounds and nine shillings transferred in 1948 from the then Nizam of Hyderabad to the High Commissioner in Britain of the newly-formed State of Pakistan. That amount has since grown into 35 million pounds as the Nizam’s descendants claimed it belongs to them and Pakistan counter-claimed.

“We are delighted that today’s judgment recognises His Exalted Highness the VIII Nizam’s rights to funds which have been in dispute since 1948. Our client was still a child when the dispute first arose and is now in his 80s. It is a great relief to see this dispute finally resolved in his lifetime,” said Paul Hewitt, partner in Withers LLP, who has acted for the VIII Nizam. In 2013, Pakistan had waived sovereign immunity by issuing a claim for the fund that opened the way for the current case to proceed. The UK High Court had been asked to determine the “central question” of who exactly is the “beneficial” owner of the funds belonging to the late Nizam, Osman Ali Khan. The Nizam was in dilemma of joining Pakistan or staying with India in 1948 and reportedly sought the return of the funds.