Section 5: Commercial transactions and contracts to be performed in Pakistan

5. Commercial transactions and contracts to be performed in Pakistan.___ (1) A State is not immune as respects proceedings relating to___ (a) a commercial transaction entered into by the State; or (b) an obligation of the State which by virtue of a contract, which may or may not be a commercial transaction, falls to be performed wholly or partly in Pakistan. (2) Sub-section (1) does not apply to a contract of employment between a State and an individual or if the parties to the dispute are States or have otherwise agreed in writing; and clause (b) of that subsection does not apply if the contract, not being a commercial transaction, was made in the territory of the State concerned and the obligation in question is governed by its administrative law. (3) In this section “commercial transaction” means___ (a) any contract for the supply of goods or services; (b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and (c) any other transaction or activity, whether of a commercial, industrial financial, professional or other similar character, into which a State enters or in which it engages otherwise than in the exercise of its sovereign authority.

Effective date: 1981-01-01

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