Panama Papers Case Decision: The Post Mortem

Pakistan, like the world over, was taken by storm when a group of investigative journalists leaked the highly confidential documents of Mossack Fonseca, a Panama based law firm. These leaks became widely known as the “Panama Papers”. Representing Pakistan in the Panama Papers was none other than the family of its Prime Minister, Mian Muhammad Nawaz Sharif. It transpired that the Mian family owns four flats in the luxurious Park Lane area of London, United Kingdom. The flats, according to the Panama Papers, were owned by offshore companies whose beneficial owner was the daughter of the Prime Minister, Mrs. Maryam Nawaz Sharif (also known as Maryam Safdar).

The Panama Leaks created a political ruckus as opposition parties, led by Chairman Pakistan Tehreek-e-Insaaf (PTI), Mr. Imran Khan, sought the resignation of the Prime Minister and a detailed inquiry into the ownership of the flats, as well as an investigation into the source of the funds through which these flats were acquired. It is pertinent to mention that the Prime Minister himself was not named in the Panama Papers.

The Prime Minister was pressurized into addressing the nation, followed by a speech on the floor of National Assembly. The Prime Minister did not deny that his family owned the flats in London and thereafter attempted to explain the source of funds through which his family had acquired them. The issue gained importance as the Prime Minister’s family had ostensibly acquired the flats between the years 1993/1994. The Prime Minister had been occupying public offices in various capacities prior to the acquisition of the flats and hence the opposition parties alleged that the flats had been acquired through illegal means. An inquiry in this behalf was required to be made as the Prime Minister and his family had acquired assets beyond their known sources of income by misusing the public office held by the Prime Minister since the year 1985.

The government tried to resolve the issue by entering into negotiations with the opposition parties in order to form a judicial commission and to settle its terms of reference. However, the parties, after a prolonged period and multiple rounds of meetings, could not arrive at a common ground. Consequently, the matter ended before the Supreme Court. Mr. Imran Khan of PTI instituted a constitutional petition before the Supreme Court under Article 184(3) of the Constitution of Pakistan. Mr. Khan was joined by Mr. Shiekh Rashid of Awami Muslim League (AML) and Mr. Siraj-ul-haq of Jamat-e-Islami (JI), who also instituted similar petitions before the Supreme Court.

The Petitioners sought disqualification of the Prime Minister on two grounds. Firstly, that in the two speeches that the Prime Minister had given, there were glaring contradictions. Based on these contradictions, it was apparent that the Prime Minister had not been honest and ameen before the nation and hence stood disqualified in terms of Article 63 of the Constitution (which requires that a person elected to the National Assembly must be honest and ameen). Secondly, it was alleged that the Prime Minister had lied by not disclosing his true assets in his nomination papers as well as in his income tax returns and hence he was required to be disqualified on that account as well by attracting provisions of the Article 62 and 63 read with the Representation of Peoples Act (ROPA)1976. It was also alleged that the Prime Minister had declared his daughter to be his dependent in his income tax returns. In view of the Panama Papers, wherein the name of Mrs. Maryam Nawaz was mentioned as the beneficial owner of the London flats, it was mandatory for the Prime Minister to declare the London flats in his returns and his failure to do so amounted to him concealing his assets, which, in view of the provisions of the ROPA, amounted to disqualification of the Prime Minister.

The Prime Minister responded to the allegations leveled in the Petition before the Supreme Court by denying all the allegations leveled against him and his family. It was argued that there were no contradictions in the two speeches of the Prime Minister. It was accepted that there were some omissions instead, which do not amount to a contradiction.

It was also argued that the London flats were owned by the elder son of the Prime Minister, Mr. Hussain Nawaz Sharif, through offshore companies and that the name of Mrs. Maryam Nawaz Sharif in the Panama Papers was a factual inaccuracy and hence denied. Furthermore, it was also argued that Mrs. Maryam Nawaz Sharif was not the dependent of her father even though contrary statements had surfaced on media interviews. This was explained by producing the tax returns of subsequent years where it was shown that Mrs. Maryam Nawaz Sharif had an independent source of income through agricultural land owned by her.

The Prime Minister’s legal team further tried to explain the source of funds through which the London flats were acquired. In this regard, handwritten agreements between the father of the Prime Minister and the Royal family of Qatar were presented in Court. An affidavit (popularly known as the Qatari Letter) of the Prince of Qatar was also presented to corroborate the story presented by the legal team of the Prime Minister. Numerous other documents were presented before the Court to show that the means through which the London flats were acquired were legal and that nothing existed on record through which it could be shown that the London flats were acquired by the family of the Prime Minister beyond its known sources of income. It was also argued that the Prime Minister himself was never the owner of the London flats. These flats had been in use of his children and are now owned by them.

The case went on for about 26 hearings spanned over at least three and a half months and after having reserved the Judgment for about two months, the Supreme Court announced the Panama Verdict on April 20, 2017. The Judgment directed through majority of 3-2 that a Joint Investigation Team (JIT) be formed to investigate the money trail that was presented by the Prime Minister and his family. The JIT has been tasked by the Court to give its findings within 60 days of its formation. The JIT, at the time of writing, has been formed and it has summoned the Prime Minister for investigation.

 

The Verdict

The first question that was to be tackled by the Supreme Court was whether the same could entertain the Constitutional Petition in exercise of its jurisdiction under Article 184(3) of the Constitution. On this point, the Supreme Court decided in the affirmative. The Supreme Court concluded that the issue before it deals with a matter which is of public importance as it impacts the fundamental rights of the citizens of Pakistan. On this account, Justice Azmat Saeed, member of the majority judges, observed that:

“…to exercise authority on their behalf by their chosen representatives is the most foundational of all the Constitutional rights of the people of Pakistan, if a disqualified person, as alleged, usurps such role and thereafter becomes the Prime Minister surely such right of the people is effected and is liable to be enforced by this Court. The contentions of the learned Attorney General for Pakistan to the contrary cannot be accepted and it is reiterated that these Petitions under Article 184(3) of the Constitution are maintainable.”

Having decided the maintainability of the petitions, the Supreme Court then had to give its findings on the issue of disqualification of the Prime Minister on account of his two speeches, declaration or concealment of his assets in the nomination papers for the election in 2013 and whether his daughter was his dependent or not. In this behalf, thousands of documents were instituted before the Supreme Court by both sides in support of their respective cases.

Given the voluminous record before the Court, including unauthenticated documents presented from both sides, the question before the Court was whether any finding can be given based on such record. Whether the Court can bypass the trial or conduct the trial itself in exercise of its jurisdiction under Article 184(3). It is a settled principle of law that whenever there are disputed questions of facts involved in a case, evidence is required to settle them. Evidence means production of documents and witnesses by one side in support of their case and cross examination of the evidence produced by the other side. The parties in the Panama Case sought a decision from the court based on documents which, legally speaking, never stood the test of cross examination to be admitted as evidence. This was the task of the trial court which the Supreme Court, under its jurisdiction under Article 184(3), could not delve into as has been held by the Supreme Court in numerous cases. If the Court did delve into this task then essentially the Court would have been setting an irregular precedent. Such a precedent would have left the trial courts of the Country redundant and every citizen would be directly approaching the Supreme Court of Pakistan.

Thus, the Supreme Court held that it cannot conclusively determine from the unauthenticated record available before it, whether Mrs. Maryam Nawaz Sharif was a dependent of the Prime Minister, whether the Prime Minister had lied in his two speeches in light of the contents of the two speeches explaining the money trail, and whether the sources of income of the Prime Minister’s family were beyond the known sources of income.

Essentially, the Supreme Court held that it cannot go into questions which are disputed questions of facts and conduct a trial itself. The authenticity of submitted documents and disputed facts require further investigation. This exercise, in fact, is envisaged under the law i.e. National Accountability Bureau (NAB) Ordinance. When a question pertains to assets acquired beyond the means of a public office holder, the NAB has been empowered under the NAB Ordinance to inquire into the sources from which such assets have been acquired. If upon inquiry, a reasonable case appears, a reference can be initiated before the Accountability Court where the accused is given a proper chance to cross examine evidence presented against him and also to produce complete evidence in his support. Justice Ejaz Afzal observed in this regard as follows:

“Any liability arising out of these Sections has its own trappings. Any allegation leveled against a holder of public office under these provisions of law requires an investigation and collection of evidence showing that he or any of his dependents or benamidars owns, possesses or has acquired assets etc disproportionate to his known means of income. Such investigation is followed by a full-fledged trial before an Accountability Court for determination of such liability. But where neither the Investigation Agency investigated the case, nor any of the witnesses has been examined and cross examined in an Accountability Court nor any of the documents incriminating the person accused has been produced and proved in accordance with the requirements of Qanoon-e-Shahadat Order, 1984, nor any oral or documentary pieces of evidence incriminating the person accused has been sifted, no verdict disqualifying a holder of public office could be given by this Court in a proceeding under Article 184(3) of the Constitution on the basis of a record which is yet to be authenticated.”

Justice Afzal further observed that:

“We must draw a line of distinction between the scope of jurisdiction of this Court under Article 184(3) of the Constitution and that of the Accountability Court under the Ordinance and between the disqualifications envisioned by Articles 62 and 63 of the Constitution and Section 99 of the ROPA and the criminal liabilities envisioned by Sections 9, 10 and 15 of the Ordinance lest we condemn any member of Parliament on assumptions by defying the requirements of a fair trial and due process. We cannot make a hotchpotch of the Constitution and the law by reading Sections 9 and 15 of the Ordinance in Articles 62, 63 of the Constitution and Section 99 of the Act and pass a judgment in a proceeding under Article 184(3) of the Constitution which could well be passed by an Accountability Court after a full-fledged trial. Nor could we lift Sections 9 and 15 of the Ordinance, graft them onto Article 63 of the Constitution, construe them disqualifications and proceed to declare that the member of Parliament so proceeded against is not honest and ameen and as such is liable to be disqualified. A verdict of this nature would not only be unjust but coram non judice for want of jurisdiction and lawful authority. If a person is sought to be proceeded against under Section 9(a)(v) and 15 of the NAB Ordinance resort could be had to the mode, mechanism and machinery provided thereunder. Let the law, the Investigation Agency and the Accountability Court and other Courts in the hierarchy take their own course. Let respondent No. 1 go through all the phases of investigation, trial and appeal. We would not leap over such phases in gross violation of Article 25 of the Constitution which is the heart and the soul of the rule of law. We also don’t feel inclined to arrogate to ourselves a power or exercise a jurisdiction which has not been conferred on us by any of the acts of the Parliament or even by Article 184(3) of the Constitution. Who does not know that making of a statement on oath in a trial lends it an element of solemnity; cross examination provides safeguards against insinuation of falsehood in the testimony; provisions of Qanoon-e-Shahadat Order regulate relevancy of facts, admissibility of evidence and mode of proof through oral and documentary evidence and thus ensure due process of law. We for an individual case would not dispense with due process and thereby undo, obliterate and annihilate our jurisprudence which we built up in centuries in our sweat, in our toil, in our blood.”

Thus, the Supreme Court decided that it will not change the settled jurisprudence of the country by taking upon itself a role which was otherwise not envisaged or entrusted upon it. It was argued before the Supreme Court by the Petitioners that the institutions and organizations responsible for conducting investigation and looking into this matter have turned a blind eye as the government has appointed its handpicked individuals as the heads of these organizations. In this regard, the heads of NAB, Federal Investigating Agency (FIA) and Federal Board of Revenue (FBR) were also summoned. Their explanation as to their response to this scandal was found to be unsatisfactory by the Supreme Court and in fact admonished in the harshest possible terms. Therefore, the Court was faced with a query. When State institutions are reluctant in doing their jobs, should not the Court enter into their shoes and in contravention of the settled law, conduct a trial itself in exercise of its Constitutional jurisdiction vested in it under Article 184(3)? To this, Justice Afzal of the majority members of the bench observed that:

“Yes, the officers at the peak of NAB and FIA may not cast their prying eyes on the misdeeds and lay their arresting hands on the shoulders of the elites on account of their being amenable to the influence of the latter or because of their being beholden to the persons calling the shots in the matters of their appointment posting and transfer. But it does not mean that this Court should exercise a jurisdiction not conferred on it and act in derogation of the provisions of the Constitution and the law regulating trichotomy of power and conferment of jurisdiction on the courts of law. Any deviation from the recognized course would be a recipe for chaos. Having seen a deviation of such type, tomorrow, an Accountability Court could exercise jurisdiction under Article 184(3) of the Constitution and a trigger happy investigation officer while investigating the case could do away with the life of an accused if convinced that the latter is guilty of a heinous crime and that his trial in the Court of competent jurisdiction might result in delay or denial of justice.

Courts of law decide the cases on the basis of the facts admitted or established on the record. Surmises and speculations have no place in the administration of justice. Any departure from such course, however well-intentioned it may be, would be a precursor of doom and disaster for the society. It as such would not be a solution to the problem nor would it be a step forward. It would indeed be a giant stride nay a long leap backward. The solution lies not in bypassing but in activating the institutions by having recourse to Article 190 of the Constitution. Political excitement, political adventure or even popular sentiments real or contrived may drive any or many to an aberrant course but we have to go by the law and the book. Let us stay and act within the parameters of the Constitution and the law as they stand, till the time they are changed or altered through an amendment therein.”

Therefore, based on the “…bulk of unauthenticated documents brought on the record by the petitioners” which when “… pitched against another bulk of unauthenticated documents brought on the record by the respondents” the Supreme Court was found itself unable to conclusively determine whether the Prime Minister had been dishonest, whether Mrs. Maryam Nawaz Sharif was her dependent, whether the Prime Minister failed to disclose assets which transpired to be owned by his family in the Panama Papers.

However, the Court did analyse the provisions of the Constitution, in particular Articles 62 and 63, the provisions of NAB Ordinance and the provisions of ROPA. After thoroughly analyzing the provisions of the law, Justice Ejaz Afzal concluded that:

“Where none of the provisions of the Constitution or the Act dealing with disqualifications requires a member of Parliament to account for his assets and those of his dependents, even if they are disproportionate to his known means of income, how could this Court on its own or on a petition of any person under Article 184(3) of the Constitution require him to do that, and declare that he is not honest and ameen if he does not account for such assets. Given Section 9(a)(v) of the Ordinance requires him to account for his assets and those of his dependents and benamidars if they are disproportionate to his known means of income in a trial before an Accountability Court but not in a proceeding under Article 184(3) of the Constitution. Therefore, failure of respondent No. 1 to do that which he is not required by law to do would not be of any consequence. It, thus, cannot call for his disqualification at least at this stage”.

 

Justice Afzal further observed that:

“But mere contradiction between the speeches of respondent No. 1 and statements of respondents No. 7 and 8 does not prove any of his speeches false or untrue unless it is determined after examining and cross-examining both of them that their statements are correct and true. Where it is not determined that statements of respondents No. 7 and 8 are correct and true, no falsity could be attributed to the speeches of respondent No. 1. If at all, the speeches of respondent No. 1 are sought to be used to incriminate him for declaring that he is not honest and ameen, he has to be confronted therewith. Where no effort was made to prove the statements of respondents No. 7 and 8 to be true and correct, nor was respondent No. 1 confronted with his speeches, it would be against the cannons of law of evidence to use such speeches against him…”

Thus, the Supreme Court conclusively held that by merely giving contradictory speeches, a person cannot be declared as dishonest unless the same has been confronted by the contents of the speech. Therefore, the argument of the Petitioners that the Prime Minister having made contradictory speeches was deemed to be not honest and ameen and hence disqualified was rejected by the Supreme Court.

Justice Azmat Saeed, agreeing with Justice Afzal, also gave his opinion on the issue of the Prime Minister being not honest and ameen in view of Article 62 and 63. Justice Saeed observed that:

“Before the said provisions can be pressed into service, there must be a declaration by Court of law. At the risk of stating the obvious, it may be clarified that the Courts of law are concerned with the matters of law not morality. There can be no manner of doubt that the term “honest” as employed in Article 62(1)(f) refers to legal honesty, an objective concept and not mere moral or ethical honesty, which is subjective. The Courts have never wandered into the realm of morality, in this behalf.

Such is the true and obvious import of Article 62(1)(f) of the Constitution, as has been consistently without any exception interpreted and applied by this Court. Article 62(1)(f) of the Constitution cannot be permitted to be used as a tool for political engineering by this Court nor should this Court arrogate unto itself the power to vet candidates on moral grounds, like a Council of Elders as is done in a neighbouring Country. Under our Constitutional dispensation, Pakistan is to be governed by the Representatives chosen by the people and not chosen by any Institution or a few individuals.

The aforesaid speeches and interviews are, at best, previous statements with which the makers thereof could be confronted in the event of an evidentiary hearing, especially as the said Respondents were under no legal obligation to make such statements or give such interviews. The compulsion was political and so to its effect.

To rely upon the statements/interviews of Respondents No.7 and 8, in the above context, would require rewriting the Laws pertains to Elections, including Articles 62 and 63 of the Constitution and the corresponding provisions of ROPA, 1976. In the current legal dispensation attributing vicarious liability to a father for the acts and omissions of his son, more particularly, oral statements would result in a legal farce, which cannot be contemplated.”

In a nutshell the Supreme Court has held that honesty as mentioned in the Constitution is legal honesty and not moral honesty. To determine whether a person is honest or not, a declaration to such effect must be made before a Court of competent jurisdiction. That, in turn, requires the person so accused of being dishonest to prove his case by following the due process of law i.e. right to fair trial. Since the Prime Minister was not declared to be dishonest by any Court and since the Prime Minister was not confronted with the evidence that was brought against him to have him declared as dishonest, the Supreme Court rejected the allegations of the Petitioners to this effect.

 

Joint Investigation Team (JIT)

The Supreme Court next examined the second part of the disqualification argument i.e. concealment of assets and acquisition of assets beyond known sources of income. For this purpose the Supreme Court analysed two principle statutes – NAB Ordinance and ROPA, along with the provisions of the Constitution.

While analyzing the two principle statutes, the Supreme Court held that the scheme of ROPA provided that the candidate seeking nomination for an election to National Assembly is required to give a statement of his assets. Such assets must include those of his spouse, children and those held as benamidars and must be declared as such. A non declaration of assets will render a candidate as ineligible for election to the National Assembly. Furthermore, it was also held that if upon inquiry by the Election Commission of Pakistan, it was found post elections that the Member elected to the National Assembly had concealed his assets or that of his/her spouse or children or those held as benamidars then the Member National Assembly stands disqualified and the Election Commission shall issue a notification to this effect de-notifying him/her.

However, neither the Constitution nor the provisions of ROPA make it mandatory for the candidate to disclose the source of income or assets acquired. The requirement pertains only to disclosure of assets. Therefore, if the person has disclosed his assets in the nomination papers but has failed to disclose the means or source through which the same were acquired, the candidate or the member cannot be disqualified. In this behalf, Justice Saeed observed that:

“A bare reading of the aforesaid provisions of the Representation of the People Act, 1976 makes it clear and obvious that if a person fails to disclose any asset owned by him, his spouse or dependent in his Nomination Papers in terms of Section 12 of ROPA, he exposes himself not only to disqualification but also prosecution for corrupt practices under Section 78 of ROPA besides any other liability prescribed by the law.

…In the aforesaid provisions reference to the source of funds for acquisition of such undisclosed assets is conspicuous by its absence, hence; wholly irrelevant. Even, if a delinquent person offers a perfect, legally acceptable explanation for the source of funds for acquiring the undeclared assets, he cannot escape the penalty of rejection of his Nomination Papers or annulment of his election. Such is the law of the land and as has been repeatedly and consistently interpreted by this Court…”

 

Justice Saeed further observed that:

“In the above backdrop to hold that an MNA, who may (or may not) own an undeclared property yet his explanation for the source of the funds for acquiring such property, though legally irrelevant, is not acceptable, hence, such MNA is disqualified, is a legal absurdity under the laws of the Islamic Republic of Pakistan.

…We cannot resort to exceptionalisim by making a departure from the settled law and inventing a new set of rules merely because Respondent No.1 holds the Office of the Prime Minister. The last time in our legal history, when such a course of action was followed, it had tragic consequences…”

The question of source of income or the means through which assets are acquired by a person aspiring to be a Member of the National Assembly are in fact governed by the NAB Ordinance. If, on a complaint received by NAB or on its own suspicion, it comes to the knowledge of the NAB that a person has acquired assets beyond his known sources of income, then the NAB can initiate inquiry against that person in accordance with the provisions of the NAB Ordinance. Inquiry involves the carrying out of a thorough investigation into the assets and the means through which the same were acquired by the accused. For this purpose, NAB has been empowered to arrest the accused and attach the properties/assets of the accused as well. Upon completion of the inquiry, if the investigating officer concludes that the accused is guilty of making wealth or acquiring assets through illegal means or beyond its known sources of income then the same submits its report to the Chairman NAB, who then officially initiates a reference against the accused before the Accountability Court. If, upon inquiry, no evidence is found, the investigating officer submits the report to the Chairman NAB regarding his findings that the accused is not guilty. Upon reference to the Accountability Court, a trial is initiated which is termed as “reference” in the scheme of NAB Ordinance.

Due process of law is followed and upon giving the accused a fair trial i.e. an opportunity to present his case and rebut case against him through evidence, a finding is recorded by the Accountability Court which can be in the form of fine or a sentence or both. The decision of the Accountability Court can be challenged before the competent forum.

In the Panama Case, the Supreme Court, under the provisions of NAB Ordinance, held that there is no conclusive evidence to declare that the Prime Minister had acquired assets beyond his known sources of income. In this behalf, Justice Saeed observed that:

“…There is a possibility that the alleged grounds for disqualification and the allegations constituting an offence under Section 9(a)(v) of the NAB Ordinance may partially overlap. However, it is a legal impossibility to disqualify a person merely upon allegations. Though, such allegations may be sufficient for initiation of criminal proceedings under the NAB Ordinance. To disqualify a person in such an eventuality would require turning our entire Legal System on its head and would constitute an act of jurisprudential heresy.

…The primary basis of the case of the Petitioners are the series of documents, which allegedly formed a part of the record of a Panamian Law Firm Mossack-Fonseca, which was leaked and are commonly referred to as the Panama Papers. The said documents are, in fact, copies, including of e-mails and are by and large unsigned. Furthermore, the said documents to the extent that the same pertains to the private Respondents are, in fact, denied. In the circumstances, only an innocent simpleton could expect this Court to give a finding or pronounce judgment based upon the copies of unsigned documents, which are disputed and have not come from proper custody. This is a legal impossibility in view of the provisions of Qanun-e-Shahadat Order, 1984. Such documents cannot form the basis of a judicial pronouncement in any civilized country with a developed or even a developing Legal System. There is no legal precedent, in this behalf…

…Such revelations regardless of the credibility of the journalists responsible therefore, legally, at best, would form the basis of allegations until proved through admission or evidence before the Court of Law…”

 

Conclusion

Therefore, the allegations of the Petitioners that the Prime Minister had acquired London Flats beyond his known sources of income or through illegal means was rejected by the Supreme Court on the above reasoning.

However, the Supreme Court did find it mind boggling that no State institution was willing to initiate an inquiry into the case of Panama Leaks. According to the Supreme Court, enough material had transpired through the Panama Leaks for the State institutions like NAB and FIA to initiate an inquiry into the matter.

However, since the heads of all investigation agencies and bodies had displayed reluctance, the Supreme Court held that in exercise of its Constitutional Jurisdiction under Article 184(3) of the Constitution, it directs the formation of the JIT. The purpose of the JIT in essence is to do what the NAB and FIA are otherwise required to do under the law.

by Wasim Abid & Rahman Ali Khan

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