Explainer: Why is the government asking Nawaz for an indemnity bond?


The incumbent government has allowed former premier Nawaz Sharif to travel abroad for medical treatment on the condition that he submit an indemnity bond worth Rs7 billion.

For readers who are not familiar with the legal terminology, indemnity is a contractual agreement between two parties whereby one party agrees to pay for potential losses or damages caused by another party whereas a surety bond acts as coverage for loss of an obligee when a principal fails to perform according to the standards agreed upon between the obligee and the principal.

In this case, this means that if the Pakistan Muslim League-Nawaz (PML-N) supreme leader fails to return to the country, the government can cash the indemnity bond submitted by him to compensate for the penalty given to him by the courts.

According to legal experts, Exit Control List (ECL) law of 1981, which was mentioned by Law Minister Farogh Naseem, permits the government to stop anyone from going abroad if it considers it necessary and for this purpose it can add travel restrictions or add their name on the ECL. However, experts said, no rule permits the government to impose conditions on someone’s travel. Experts further added that the absence of a rule provided the government space to impose conditions on Nawaz’s travel abroad.

Highlighting the difference between indemnity bonds and bail bonds, experts said that the former are usually in the form of contracts, adding that the government should clarify details of the bond they seek. They further said that banks issue bonds after something is secured against them and the only way the government can compensate for the loss is if something of financial worth is secured against the indemnity bond because personal commitments would amount to nothing if they are breached.

Other legal experts were of the view that Pakistan’s criminal law has no mention of such bonds, only the civil law explicitly mentions them. They added that while the court has allowed Nawaz to travel abroad, the government only wants to make it conditional.