Supreme Court reaffirms finality of contracts, dismissing calls for arbitration in Hayatabad Medical Complex case.

On August 7, 2026, the Supreme Court of Pakistan dismissed a petition that requested an appeal against a Peshawar High Court ruling. The case centers on the construction contract for the Hayatabad Medical Complex in Peshawar, awarded on December 16, 1993. During its execution, the contractor sought extra payments due to project delays and funding shortages. The contractor later agreed to a final payment of Rs88.555 million and signed a No Demand Certificate. That certificate expressly gave up the right to claim any further money from the contract. After the settlement, the contractor asked the court to allow arbitration to recover more money. Both the trial court and the Peshawar High Court rejected that request. The Supreme Court confirmed those decisions and ruled that a party that accepts a final settlement and signs a No Demand Certificate cannot later raise additional claims or use arbitration, unless it proves the settlement was gained through fraud, coercion or undue influence. The court said that such certainty is essential for public‑sector development projects, warning that reopening settled claims without evidence of wrongdoing would undermine legal certainty and commercial stability.