Firm Secures Landmark Order Protecting Decree Holder Against Three Decades of Currency Devaluation

Mohsin Tayebaly & Co. successfully represented a decree holder before the Court of the Senior Civil Judge, Karachi (South), in a complex execution proceeding involving a three-decade-old foreign currency dispute.

The matter pertained to the execution of a recovery decree for USD 100,000 originally passed in 2004, which had recently been modified and upheld by the Supreme Court of Pakistan.

The central legal controversy revolved around the applicable date for converting the foreign currency decretal amount into Pakistani Rupees, specifically, whether the conversion should be based on the exchange rate prevailing on the date the suit was filed (1998) or the date of actual payment and realization.

The judgment debtors sought to fully satisfy the decree by depositing an amount calculated on a frozen exchange rate dating back to 1998, placing heavy reliance on a 2018 judgment of the High Court to argue for conversion at the suit-date rate.

However, our team successfully demonstrated that applying an obsolete exchange rate would not only defeat the purpose of the decree but also violate the core principle of equitable recompense. We established before the Executing Court that the 2018 precedent relied upon by the opposing side was distinguishable on facts and inconsistent with the binding jurisprudence of the Supreme Court of Pakistan.

Relying on settled Supreme Court precedent, we successfully argued that the “Payment Date Rule” must strictly apply, and the conversion into local currency must occur at the exchange rate prevailing on the date of realization, particularly as the plaintiff had never voluntarily restricted their claim to a fixed rupee equivalent in their pleadings.

By a detailed order dated April 02, 2026, the executing court upheld our arguments, ruling that the general rule for foreign currency decrees mandates conversion at the exchange rate prevailing on the date of actual payment. The Court declared the judgment debtors’ prior deposit as insufficient for full satisfaction and entitled the decree holder to a fresh calculation of the decretal amount at the current exchange rate, protecting our client against decades of severe currency devaluation.