Pakistan’s commercial litigation landscape has shifted meaningfully heading into 2026. Three changes matter most for businesses and their counsel: a tighter, restructured system for appealing tax assessments; a rebuilt alternative dispute resolution (ADR) mechanism for tax cases specifically, alongside an expanding civil ADR framework for ordinary commercial disputes; and a genuine, if uneven, move toward digital court operations at the Supreme Court and High Court level. None of these developments are cosmetic — each changes how quickly a dispute moves, what it costs, and where a company’s legal team needs to focus first.

This guide walks through what actually changed, the deadlines businesses now need to track, and what digitisation means in practice for anyone litigating — or trying to avoid litigating — in Pakistan this year.

Tighter Deadlines for Tax Appeals

The starting point for understanding 2026’s tax dispute landscape is the Tax Laws (Amendment) Act, 2024, which took effect on 16 June 2024 and restructured how income tax, sales tax, and federal excise disputes move through the appeals system. Two changes stand out for anyone currently facing an FBR assessment:

• The appeal filing window was cut from 60 days to 30 days. Taxpayers used to the old timeline need to recalibrate — 30 days from an adverse order is a narrow window to instruct counsel, assemble evidence, and file.
• The appellate route now depends on the size of the dispute. Cases below the statutory thresholds (broadly, PKR 20 million for income tax, PKR 10 million for sales tax, and PKR 5 million for federal excise) go to the Commissioner (Appeals) first; larger disputes go directly to the Appellate Tribunal Inland Revenue (ATIR). Appeals from the Commissioner (Appeals) now proceed to the High Court rather than back through the Tribunal, while direct Tribunal decisions are challenged via reference applications to the High Court.

Decision timelines were also tightened: the Appellate Tribunal is expected to decide within 90 days (extendable by a further 90 days), and the High Court within six months. Stay-of-recovery provisions changed too — a Tribunal-granted stay now runs 90 days rather than 180, and a High Court stay requires payment of 30% of the disputed tax and lapses after six months.

The practical takeaway: businesses need a much shorter internal escalation path from “assessment received” to “counsel engaged” than they may currently have, and should map any live dispute against the new thresholds to confirm which forum it’s actually headed to.

A Rebuilt ADR System for Tax Disputes

Separately from the appeals timeline, Pakistan’s National Assembly passed the Income Tax Ordinance (Third Amendment) Act, 2026 in early 2026, which substitutes the alternative dispute resolution scheme at section 134A of the Income Tax Ordinance, 2001. This is a meaningful rebuild of the ADR committee mechanism taxpayers can use as an alternative to the standard appeal track, and it includes several changes worth flagging to clients:

• Revised rules for how the ADR Committee is constituted and how it operates once formed.
• New, firmer timelines for the Committee to reach a determination, with clearer consequences if it fails to do so within the window.
• A notable carve-out for state-owned enterprises: SOEs generally gain a right to appeal ADR decisions, except where the SOE is wholly owned — directly or indirectly — by the federal government.
• Courts are now given an explicit mechanism to refer eligible disputes into the ADR process, alongside automatic-transfer provisions for certain categories of cases.
• Changes to how the ADR Committee’s chairperson and the taxpayer-nominated member are compensated.

For commercial clients, the headline is that ADR is being positioned as a faster, more structured off-ramp from full litigation — but the mechanism itself has just changed shape, so any ADR strategy built around the pre-2026 process needs a second look before it’s relied on.

Civil and Commercial ADR More Broadly

Outside the tax-specific mechanism, Pakistan’s general ADR framework has continued to mature and is increasingly the first stop for ordinary commercial and contractual disputes. The Alternative Dispute Resolution Act, 2017 remains the cornerstone federal statute, empowering courts to refer civil disputes — including commercial ones — to accredited mediators, typically with a 30-day completion window extendable by a further 15 days. Provinces have layered their own statutes on top: the Punjab ADR Act, 2019, the Khyber Pakhtunkhwa ADR Act, 2020, and the Balochistan ADR Act, 2022.

Two more recent procedural instruments matter for practitioners advising on commercial disputes: the ADR Mediation Accreditation (Eligibility) Rules, 2023, which set professional standards and certification requirements for mediators, and the Mediation Practice Direction (Civil) Rules, 2023, which standardise how court-referred mediation is conducted. Courts have been explicit about wanting corporate, commercial, and contractual disputes routed through mediation where appropriate, citing the time and cost savings for business litigants specifically.

For a company weighing whether to litigate or mediate a commercial dispute in Pakistan today, the honest answer is that the accreditation and procedural infrastructure is now real enough — where it wasn’t, a few years ago — to make ADR a credible first move rather than a delay tactic.

Digital Courts: Real Progress, Unevenly Distributed

The third major shift is digitisation of the court system itself, and 2026 has produced the clearest evidence yet that this is more than a pilot project. In April 2026, the Supreme Court of Pakistan operated a multi-city hearing with the bench sitting in Islamabad while counsel appeared simultaneously from Quetta, Hyderabad, Karachi, and Lahore — supported by digitised case files, barcode-based file tracking, electronic transmission of orders, online payment, and an e-office system.

The High Courts are at varying stages of the same transition:

• The Islamabad High Court runs an e-court system where lawyers can request a video-link appearance (via Microsoft Teams, with identity verification), alongside daily cause lists published on its website and mobile app.
• The Sindh High Court offers e-filing through a dedicated e-services portal, advanced case search, online proceedings, and cause lists across its Karachi, Hyderabad, Sukkur, Larkana, and Mirpurkhas registries.
• The Lahore High Court, supported by the Punjab Information Technology Board, has the most extensive build-out on paper: electronic case filing, a lawyer’s e-filing portal, rules-based scheduling, a judges’ workbench, performance dashboards, and SMS case alerts.

For litigants and counsel, the practical effect is real but not yet uniform: case status tracking, e-filing, and remote appearances are genuinely available in more forums than even two years ago, but the specific tools, portals, and procedural requirements still differ court to court. Anyone litigating across more than one jurisdiction in Pakistan in 2026 needs to check each forum’s current e-filing and video-link requirements rather than assume they match.

What This Means for Businesses in 2026

Put together, these three shifts point to the same practical advice: build a shorter internal clock for tax disputes given the 30-day appeal window, revisit any ADR strategy in light of the restructured section 134A mechanism, treat civil mediation as a genuine first option for commercial disputes rather than a formality, and confirm the specific digital procedures of whichever court a dispute will actually be heard in. Commercial litigation in Pakistan is getting faster and more structured — but only for parties who track the deadlines and forums closely enough to use the new system as designed.

Frequently Asked Questions

How long do I have to appeal an FBR tax assessment in 2026?

Under the Tax Laws (Amendment) Act, 2024, the standard appeal filing window is 30 days from the date of the order, down from the previous 60 days. Which forum the appeal goes to first — the Commissioner (Appeals) or the Appellate Tribunal Inland Revenue — depends on the size of the disputed amount.

Is tax ADR in Pakistan still available in 2026?

Yes, but the mechanism changed. The Income Tax Ordinance (Third Amendment) Act, 2026 restructured the ADR Committee process under section 134A of the Income Tax Ordinance, 2001, including new timelines and rules on how committees are formed and how appeals from their decisions work.

Can ordinary commercial disputes be mediated in Pakistan, or only tax matters?

Ordinary commercial and contractual disputes can be referred to mediation under the Alternative Dispute Resolution Act, 2017, and equivalent provincial statutes. This is a separate track from the tax-specific ADR mechanism under the Income Tax Ordinance.

Are Pakistani courts fully digital now?

Not uniformly. The Supreme Court and each High Court have rolled out e-filing, case tracking, and video-link hearing capability, but the specific systems and requirements differ by court, so this should be confirmed forum-by-forum rather than assumed.

Given how recently these reforms took effect, and how much still depends on forum-specific rules, it’s worth confirming your dispute’s current procedural posture with a lawyer who practices in Pakistan before relying on any specific deadline above. Connect with a vetted commercial litigation or tax lawyer in Pakistan through Global Law Experts.

Sources consulted

• EY Global — Pakistan implements amendments to tax appeals system
• KPMG Pakistan — A Brief on Income Tax Ordinance (Third Amendment) Act, 2026
• KPMG US — Pakistan: Changes to alternative dispute resolution
• Courting The Law — Mediation as an ADR Mechanism in Pakistan
• ProPakistani — SC Goes Digital with Multi-City Hearings and E-Courts System
• PakLawyer — Digital Courts in Pakistan 2026