The Securities and Exchange Commission of Pakistan (SECP) published a press release announcing that its Appellate Bench has dismissed two appeals filed by United Insurance Company of Pakistan Limited and SPI Insurance Company Limited, which has since fully merged into United Insurance. The appeals challenged an SECP direction to encash an insurance guarantee of PKR 50 million in favour of Sukh Chayn Valley Limited and a separate SECP penalty order issued for non-compliance with that direction. The dispute arose from a land purchase agreement under which Sukh Chayn paid a mobilisation advance backed by an insurance guarantee issued by SPI Insurance; after the agreement was cancelled, Sukh Chayn sought encashment of the guarantee. Following proceedings in the civil court, the Islamabad High Court and the Supreme Court of Pakistan, SECP issued a direction under Section 60 of the Insurance Ordinance to encash the guarantee, which the insurers did not implement. The Appellate Bench relied on an Islamabad High Court order stating that the insurer’s obligation under the guarantee was absolute regardless of disputes between the parties, noted that the order was upheld by the Supreme Court, and rejected as unsubstantial the objection that SECP lacked jurisdiction. The Bench also dismissed two other appeals filed by United Insurance.
Securites & Exchange Commission of Pakistan 2025-01-03
Securities and Exchange Commission of Pakistan appellate bench dismisses United Insurance and SPI Insurance appeals over PKR 50 million guarantee encashment
The Securities and Exchange Commission of Pakistan's Appellate Bench dismissed appeals by United Insurance Company of Pakistan Limited and SPI Insurance Company Limited, upholding an SECP direction to encash a PKR 50 million insurance guarantee for Sukh Chayn Valley Limited. The Bench affirmed the insurer's absolute obligation under the guarantee, supported by the Islamabad High Court and the Supreme Court of Pakistan, and rejected claims of SECP's lack of jurisdiction.