UK High Court rules in India's favour against Pak in Hyderabad funds case

The UK High Court on Wednesday ruled in favour of India and the successors of late 7th Nizam of Hyderabad, who sent £1 million to a London bank in 1948, now estimated to be £35 million.

"In the judgment today, the UK High Court has rejected Pakistan's claim that the fund had been intended as payment for arms shipments or as an outright gift. The Court has held that beneficial ownership in the fund as on 1948 lay with the 7th Nizam, and that it had been held on trust to his benefit and that of his successors in the title since then," the External Affairs Ministry said in a statement.

The fund has been held by the National Westminster Bank in London.

The fund had been held in the account of the High Commissioner of Pakistan to the UK Rahimtoola since September 1948. It had been the subject of earlier proceedings in the 1950s in which the UK House of Lords set aside proceedings brought by the 7th Nizam claiming the fund as Pakistan invoked state immunity, the statement read.

In 2013, Pakistan commenced fresh proceedings, 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 today and rejected arguments advanced by Pakistan that the dispute was non-justiciable, 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 also 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 7th Nizam was beneficially entitled to the fund, the Court today concluded that those claiming in right of the 7th Nizam, that is, India and the two grandsons of Nizam were now entitled to have the fund.