ISLAMABAD - Pakistan on Wednesday lost the Hyderabad fund case in a United Kingdom’s high court as Islamabad claimed historical context was overlooked.

A foreign ministry statement said: “Pakistan has taken note of the judgment by the High Courts of Justice of the UK in the Hyderabad fund case, after a two-week trial in June 2019.  The judgment rejects the longstanding claims of the two major parties and upholds the claims of the heirs of Nizam of Hyderabad.”

Earlier, the British High Court granted Mukarram Jah, the titular Nizam of Hyderabad, the ownership of a fund which has been in dispute for over 70 years and now amounts to £35 million. The Pakistan government had claimed the ownership of the fund and had filed a case against Mukarram Jah in the UK court in 2013.

“We are delighted that today’s judgment recognises His Exalted Highness the VIII Nizam’s rights to funds which have been in dispute since 1948,” Paul Hewitt, one of Nizam’s lawyers said.

“The judgment covers a complex historical and legal set of issues, interpreting facts and events that occurred 70 years ago to establish that the funds, which now amount to £35 million, were always held in trust for our client’s grandfather, HEH the VII Nizam,” Paul Hewitt stated.

The Pakistan foreign ministry said: “The ruling does not take the historical context of the transfer into account when India illegally annexed Hyderabad in violation of International Law and all civilised norms, leading the Nizam of Hyderabad to make desperate efforts to defend his people and the state from Indian invasion. The Nizam also raised the matter with the UN Security Council where the issue remains on the agenda to date. The Nizam as a sovereign approached Pakistan for assistance which the Government of Pakistan provided.”

Pakistan, it said, “is closely examining all aspects of the detailed judgment and will take further action in light of legal advice received.”

The dispute started around the time of partition. In 1948, the Nizam of Hyderabad Asaf Jah sent £1 million and one Ginni to the then Pakistan High Commissioner’s London account as a fund for “trust for safekeeping” of Hyderabad from India if there were an invasion. At that time, the princely state of Hyderabad was not under the Indian government.

However, a few days later, the Nizam denied that the fund was transferred with his consent and asked it back. But the bank denied the request as the money was not in his name. The bank said that the fund could not be transferred without the agreement of Pakistan, which now had legal title to the fund.

The Nizam issued proceedings against the bank in the 1950s. The case reached the House of Lords, which held that the question of who owned the fund could not be decided because Pakistan had claimed sovereign immunity. The money had been frozen ever since and the fund is now worth £ 35 million at the NatWest bank in the UK.

In 2013, Pakistan waived its sovereign immunity by issuing a claim for the fund that opened the way for the current case to proceed. The central question, in this case, was who was beneficially entitled to the fund following the original transfer, the Nizam or Pakistan?

The last and the seventh grandson of the Nizam - Mukkaram Jah, who now lives in Turkey – pursued the case to claim the money. The Indian government supported the Nizam’s claim.