The notice was served by MQM's counsel Farogh Naseem which said that the "baseless reporting" on behalf of NYT had caused damage to the reputation of Hussain.
The legal notice asked the American newspaper's editor, printer, publisher and journalist Declan Walsh to tender an unconditional apology within seven days and pay USD 10 million in damages or face legal action.
Walsh, a veteran reporter and NYT's Pakistan Bureau Chief, was expelled from the country on the eve of general elections in May this year after the interim government accused him of unspecified "undesirable activities".
The party's founder and chief Hussain has lived in the United Kingdom in self-exile since 1992 after surviving an assassination attempt in Pakistan.
His parents had moved from Agra to settle in Pakistan.
Hussain lives in London and maintains British nationality after he was granted political asylum and frequently addresses his party supporters in Pakistan through teleconference.
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