You are in your office. Sipping a cup of tea perhaps, or thinking of the many appointments that glare at you menacingly from your calendar.
Someone places a bundle of files before you. They do this everyday. And it never gets any better. You stopped reading them a long time ago. Gulping the last few sips from the cup in your hand, you resign yourself to your fate and start signing the papers.
Your mind wanders elsewhere. Is a human being a mere paper-signing machine, you perhaps wonder. What might be a good place to order lunch from today? Some financial care might also be buzzing in your brain. Eventually, the pile is done. You heave a sigh of relief. Now you can really get to your work.
Until you are made aware that one of the papers you had signed was not to be signed. The marble beneath your feet gives a crack. A tingling rises in your knees. It’s embarrassing. And you wonder at the horror of this Kafkaesque nightmare you seem to have been thrust into.
Something similar happened recently in a case involving a dispute between Hascol Petroleum and MENA energy. A flurry of activity took place at the Sindh High Court from the 29th of October this year up until the 10th of November. A prohibitory notice signed by the court’s registrar on the 29th had seemingly disadvantaged Hascol in the $9.5 million case. The exact details of this prohibitory notice have not been shared by the SHC, but the registrar admitted his mistake, claiming the document had accidentally been placed in a pile meant for his signature and he had put down his name without reading it.
Since admitting the mistake, the SHC has retracted the notice and informed the banks involved in the case. However, the details of what the order was are hazy. Hascol has either ignored requests to clarify what happened, or their legal team has said they cannot discuss the matter since it is subjudice, even though the specific matter of the retraction has been adjudicated upon. Not only this, but the court has not posted the correction anywhere on its website, and the staff at the relevant court has declined to share information or documents about the case. Why the secrecy and why now? To understand, we must go back to the original conflict.
Old news
The case is more than a decade old.
In 2014, there arose a dispute over two transactions between Hascol Petroleum and MENA Energy DMCC. Hascol, until a few years ago, was the second biggest oil marketing company (OMC) in Pakistan. Unlike other local competitors, however, it used to import its oil from abroad.
Now, they had agreed to enter into two arrangements for sourcing oil with MENA Energy, a UAE-based supplier of petroleum products. The first shipment was for high-sulfur fuel oil. There was a dispute over the quality of the products that MENA had shipped, and MENA subsequently agreed over a phone call to send another shipment with Hascol’s preferred composition of the oil. A dispute arose over the payment for this replacement shipment and the terms governing the delivery of this second shipment. MENA sought damages for Hascol’s refusal to open a letter of credit for this second shipment, while Hascol counter-claimed for damages for delay in the second shipment.
The second transaction concerned a shipment of gasoil. MENA contended that a contract had been conducted orally for the shipment, and then confirmed over email on the same day. It also claimed that Hascol had agreed to open a letter of credit five days before loading of the first shipment. Hascol, on the other hand, averred that the timeline for opening the letter of credit was never agreed upon and, therefore, there had been no contract. MENA sued for damages for Hascol’s failure to open a confirmed letter of credit.
The case was brought before the England and Wales High Court (Commercial Division). Often, in international transactions the parties agree beforehand upon the legal jurisdiction which would govern their contract. To prevent bias, usually a neutral legal framework is chosen. The United Kingdom, with its rich legal tradition dealing with transactional disputes, is usually a favoured option. Sometimes, however, a jurisdiction is chosen because the parent company of either party might be based in that particular country.
Whatever the reason, we can only surmise, but both parties presented their understandings of the events before court in the UK. Essentially, the case was concerned with determining liability. After hearing the arguments and measuring them against the evidence, the judges pronounced their verdict. Hascol’s claims for damages for the late payment for the high-sulfur fuel oil were dismissed. On the other hand, MENA Energy’s suit against Hascol’s not opening the letter of credit for both the second fuel oil and the gasoil shipment was upheld. The court decided that Hascol owed damages to MENA Energy.
Now, both parties accepted the judgment, and negotiated between them over the exact amount that Hascol owed to MENA Energy. The amount they agreed upon in the settlement agreement was USD 9.5 million, and the court issued a consent decree ratifying this agreement in 2018.
The matter appeared to have been settled. Hascol owed the sum to MENA Energy. But the payment never came.
Hascol’s Problems
Now, around that time, Hascol was struggling, to put it mildly.
Remember we mentioned earlier that unlike other players in Pakistan, Hascol used to import its oil rather than sourcing it from local refineries? Buying from abroad reduces profit margins for the importer because of increased costs. It also makes them vulnerable to changes in price. In international markets oil and petroleum products are traded in US dollars. And, in Pakistan, the price in rupees is set by the Oil and Gas Regulatory Authority (OGRA), and not by the OMCs like Hascol.
If, let’s say the price of oil decreases in the international market, and the OMC has bought its oil at a higher rate, there’s not much it can do. Another vulnerability in this model is that even if the dollar price remains the same, if the value of rupee depreciates, the cost to local companies increases.
Hascol, therefore, was much more vulnerable to fluctuations in international markets than its local competitors.
And in 2017-2018, the price of the rupee plummeted. Hascol’s standing took a major hit. Although the profits were by the look of it increasing, net profits actually fell from PKR 2.7 billion in 2017 to PKR 65 crores in 2018.
For years, Hascol had also been pursuing an aggressive growth strategy, borrowing heavily to finance its expansion. However, despite rumours of scams being run by some members of the company, through some wizardry with their financial reports and clever financial posturing, the company still stayed afloat. But, the conditions were undoubtedly worsening.
Then the pandemic hit. The demand for oil died. Debt continued to pile, and the losses just wouldn’t stop growing. The creditors Hascol had been borrowing from became nervous and started to file petitions against Hascol for the recovery of their loans. The final blows, it seemed, had been landed. Hascol was barely on its feet, its breath already sputtering.
Then the post-final punch came. Hascol had accumulated a debt of over a staggering PKR 54 billion. And the FIA opened an investigation against it for financial fraud. Details of how the fraud was carried out can be found here, but to sum it up, it appeared to be a mix of overvaluing assets overvalued, exaggerating profit numbers, misuse of some domestic letter of credit facilities, all to get more loans than the company would on merit qualify for.
Some of its top officials were also arrested, while the company was being plagued by harrying debtors, anxious to recover what they were owed.
We can only speculate why Hascol did not pay MENA the amount it had agreed to pay. But the reason is probably a combination of the different woes Hascol had begun to court around that time.
MENA DMCC takes Hascol to Court Again
MENA, of course, didn’t care for all this: it simply wanted what it was owed. So, it brought an execution application against Hascol in the Sindh High Court, calling for the court to enforce the $9.5 million payment outlined in the consent decree. Since Hascol had its assets within Pakistan, it made sense for MENA Energy to open the case here.
Hascol’s major argument in the proceedings was that although there was a provision that allowed the Court to enforce foreign decrees from “Courts in the United Kingdom and [any] other reciprocating territory,” the current case fell in one of the exceptions to the rule. Therefore the court did not have the authority to grant an execution order in this case. The consent judgment the England and Wales court had passed, ratifying the settlement agreement, was not based on the “merits of the case,” and therefore fell into one of the exceptions to the rule outlined in sub-section (3) of section 44-A of the Civil Procedure Code.
The court, however, reasoned that since this consent decree was given based on a litigation in which liabilities had been determined, and therefore was not an isolated order, it was based indeed on the ‘merits of the case’ and, therefore, the exception did not apply here.
The second argument pertained to obtaining State Bank of Pakistan’s (SBP) approval. Hascol, essentially, argued that the settlement agreement could not be executed without SBP’s approval, which had not been obtained. MENA Energy argued that it was in fact Hascol’s responsibility to obtain the necessary approval. The court dismissed Hascol’s reasoning, arguing that their stance was insufficient to show that they were otherwise willing to make the payment.
Hascol’s final major argument was that the parties had already agreed that in case of any dispute relating to the settlement agreement, only the courts of England and Wales would have the authority to decide it. Here again the court concluded against Hascol. Its reasoning was that the matter before the court was not to decide upon the dispute but to enforce a consent decree.
Therefore, in its Execution Order (no. 51 of 2019), decided in 2021, the court decided that Hascol’s argument against the court deciding on the execution were not valid, and issued an attachment order, ordering certain assets of Hascol to be frozen.
Hascol, therefore, gained little consolation from these proceedings. It still had to pay $9.5 million to MENA Energy. The Execution Order hung like a heavy weight around its neck. The pain from this stubborn obligation was compounded by a seething, trident-bearing army of problems that was relentlessly devastating the possibility even of their existence. We have already seen these above.
The creditors were worried now. If Hascol’s assets were frozen, it would be tough to get their money back. So, three Banks – Meezan, Samba, and Summit – filed objections to the Sindh High Court’s execution order in 2022. Their main argument was that in freezing the assets, the court had overlooked their rights as secured creditors to be the first ones to receive any payment should Hascol go insolvent.
In such matters, there is a hierarchy of who gets their money first from the liquidation of the debtor’s assets. The first priority is the secured creditors’. These are parties whose loan to the debtor is conditioned on a specific property of the debtor being set as collateral. Then, in descending order of priority, come unsecured creditors, decree holders (such as MENA Energy, in this case), and so on.
The court, however, decided in 2025 that their rights had not been overlooked, and that Execution Order no. 51 of 2019 already made provision for their claim in its attachment order.
Currently, however, there is an ongoing effort to set Hascol back on its feet, and an extensive debt restructuring plan is in the process of being finalized. Creditors are working together to shape the debt in such a way that enables Hascol to avoid bankruptcy, and try to obtain some certainty that they will receive their due amounts in the future.
The Elusive Order
Now, let’s go back to our signature-happy official.
On 29th October, just a few weeks ago, a notice by the Sindh High Court dated 27th October, was placed in front of the Additional Registrar along with matters of routine correspondence. This notice was related to the attachment order MENA Energy had obtained from the court against Hascol. In full fervour of overweening officialdom, he signed the High Court’s notice along with routine correspondence without noticing what exactly he was signing. As it turns out, he wasn’t supposed to sign that order.
Instead, the notice appears to have been supposed to be transferred to the competent District Court. For context, the pecuniary jurisdiction of lower courts was recently increased. These lower courts could now decide on cases involving amounts higher than what they could do before, and therefore the case was being shifted to the District Court.
The Registrar’s office admitted its responsibility in the lapse, clarifying that “the notice was not within the Registrar’s authority and was not issued under any court directive”. Later, the Sindh High Court also issued a corrigendum retracting the notice since it was meant to be issued by the competent district court, and not by the Sindh High Court’s Registrar’s office.
That, unfortunately, is the extent of the information we have available for now. Profit pursued multiple avenues to figure out what the incorrect order was that the registrar signed. However, the correction was not available anywhere on the SHC’s website. An initial media report indicated that the order had “disadvantaged” Hascol. Thinking the company would want to clear the air, Profit reached out to Hascol. Its officials were cagey, the comms department had nothing to say, and a member of the legal team declined to share details about the incident.
Why was a seemingly small procedural matter causing such aversion from everyone involved? Profit’s team in Karachi also attempted to get information from the court. At the court, Profit was first told someone else had come looking for the case file the day before and had fought with the clerk, leaving him unwilling to share the file with anyone. Engaging the services of a professional paralegal service and making requests with both the district and high courts had no effect. The case file was lost somewhere in the transfer from high court to district court, this correspondent was told. All we were able to confirm was that the notice had something to do with the original case between Hascola and Meena, and the complaint made by banks that had given loans to Hascol. The court sent the retraction notice to the banks that had filed the appeal against the earlier implementation decision.
On the face of it, it appears to be a simple case of a procedural error. However, it does give rise to a few questions about the exact nature of this notice, and its context within the case between Hascol and MENA Energy, as well as the ongoing debt restructuring process. Similarly, it invites speculation as to what became of the Execution Order, and when does Hascol expect to pay the PKR 9.5 million it owes to MENA.
Is this payment also supposed to be a part of the debt restructuring process Hascol is going through? What is the nature of the courts’ involvement in this case and its relation to the efforts to prop up Hascol? And how does the transfer of the case to the lower courts change the projected timeline of the payment? What, exactly, is happening in this case?
