Pakistan International Airlines Corporation - PIA (Conversion) Act, 2016

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THE PAKISTAN INTERNATIONAL AIRLINES CORPORATION 
(CONVERSION) ACT, 2016 
 
 
 
 
CONTENTS 
1. Short title, extent and commencement. 
2. Definitions. 
3. Conversion of Corporation into a Company. 
4. Power to pass orders for the transfer of assets. 
5. Guarantees to remain in force. 
6. Waiver from taxes, duties, fee etc.  
7. Name and Headquarters of Company. 
8. No gain or loss. 
9. Act to override. 
10. Removal of transitional difficulties. 
11. Repeal. 
 
  
 

  
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THE PAKISTAN INTERNATIONAL AIRLINES CORPORATION 
(CONVERSION) ACT, 2016 
ACT NO. XV OF 2016 
[15th April, 2016] 
An Act to provide for setting up of the Pakistan International Airlines Corporation into a public 
limited company. 
WHEREAS it is expedient to provide for conversion of the Pakistan International Airlines 
Corporation into a public limited company under the Companies Ordinance, 1984 (XLVII of 1984) 
and to deal with ancillary matters; 
It is hereby enacted as follows: 
1. Short title, extent and commencement. __ (1) This Act may be called the Pakistan 
International Airlines Corporation (Conversion) Act, 2016. 
(2) It extends to the whole of Pakistan 
(3) It shall come into force at once. 
2. Definitions.__ In this Act, unless there is anything repugnant in the subject or context,― 
(a) “arrangement” means an arrangement in writing between the Company and 
any relevant entity setting forth the terms, conditions and manner of transfer 
of one or  more assets of the Company to a relevant enti ty along with the 
consideration for the same, which transfer is subject to be provisions of 
section 4; 
(b) “assets” includes all properties, rights and entitlements of every description 
and nature whatsoever, whether present or f uture, actual or contingent, a nd 
tangible or intangible, in Pakistan or elsewhere and includes but not limited 
to property held on trust, both movable and immovable, benefits, claims, 
receivables, cash balances, documents, investments, privileges and powers; 
(c) “Company” means Pakista n International Airlines Corporation Limited 
incorporated under the Companies Ordinance; 
(d) “Companies Ordinance” means the Companies Ordinance, 1984 (XLVII of 
1984); 
(e) “Company request” means a written request made by the Company to the 
Federal Government to issue an order pursuant to section 4 to effect transfer 
to a relevant entity of specified assets in terms of the relevant arrangement, 
provided nevertheless, such request may only be made once the Company has 
to that extent complied with the provisi ons of sub-section (3) of section 196 
of the Companies Ordinance and the applicable code of corporate 
governance; 
  
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(f) “conversion” with all its cognate expressions means, in accordance with the 
provisions of this Act, the conversion of the Corporation into a Company; 
(g) “commencing date” means the date of promulgation of this Act; 
(h) “Corporation” means the Pakistan International Airlines Corporation 
established under the Pakistan International Airlines Corporation Act. 1956 
(XIX of 1956); 
(i)  “liabilities” includes all borrowings, duties, obligations, loans encumbrances 
of every description and nature whatsoever in Pakistan or elsewhere, whether 
present or future, actual or contingent, and disclosed or undisclosed; 
(j)  “order” means any order issued by the Federal Government pursuant to sub- 
section (1) of section 4 and notified in the official Gazette and the expression 
“orders” shall be construed accordingly; 
(k)  “PIAC Act” means the Pakistan International Airlines Corporation Act, 1956 
(XIX of 1956); 
(l) “proceedings” includes any suit, arbitration or other legal or administrative 
proceedings applications , appeals, awards, reviews or revisions filed or 
pending; 
(m) “relevant entity” means any body corporate or company owned or controlled 
by the Federal Government or the Federal Government itself; 
(n) “specified assets” means the assets specified in the relevant arrangements; 
(o) “undertakings” include all projects, ventures and operations undertaken by 
the Corporation, individually or collectively, in collaboration with some other 
person; and 
1[(p)  “validity     period”     means    the    period    starting     on    the commencing 
date and  ending  on the 30th  day of June,  2025  or on such  date  as the  
Federal  Government may,  by notification  in the official  Gazette,  appoint;] 
 3. Conversion of Corporation into a Company.⸻ (1) The Corporation shall be deemed 
to have been converted into a public company limited by shares with effect from the commencing 
date. 
(2) As and from the commending date,⸻ 
(a) the Company shall be deemed to hold and own all assets and liabilities of the 
Corporation without any conveyance, alienation or assignment and without 
any further act, deed or r egistration and without discharging or invalidating 
any contract; and 
 
 
 
1Subs. by Act No. LVII of 2023, s. 2. 
  
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(b) without prejudice to the generali ty of the foregoing clause, the Company 
shall,⸻ 
(i) be entitled to the benefit o f all notifications, licenses, permissions , 
sanctions, authorizations, concessions, decrees , air service 
agreements, orders and benefits whatsoever issued or granted in 
favour of the Corporation as on the commencing date , including but 
not limited to the permission connected with the listing of the  
securities of the Corporation on the relevant stock exchanges; and 
(ii) be deemed  to have taken over and shall be entitled  to enforce,  all 
rights, licenses, grants and concessions  and to have assumed  all 
liabilities  of the Corporation  and shall be liable to pay and discharge  
all liabilities of every description  and nature whatsoever  of the 
Corporation. 
(3) The shareholders of the Company shall be deemed without any fresh issuance of shares 
to own and hold the same number of fully paid shares with  such rights and privileges (including as 
to class, kind and face value) as they owned and  held in the Corporation on the commencing date; 
and the authorized capital of the Company shall be deemed to be equivalent to the authorized capital 
of the Corporation as on the commencing date and no fee or charges shall be payable in this regard. 
(4) All proceedings of every description and nature whatsoever by or against or relating to 
the Corporation pending on the commencing date in any court, tribunal, or other authority shall be 
continued, defended, prosecuted and enforced by or against or relating to the Company in the same 
manner and to the same extent as they would have been continued, defended, prosecuted and 
enforced by or against or relating to the Corporation, and the same shall not abate, be discontinued, 
prejudiced or otherwise affected by the provisions of this Act. 
(5) The Company  shall be deemed to be the successor -in-interest of the Corporation, and 
the name of the Company  shall be deemed  to have been substituted  for the name of the  Corporation   
in  all  contract,  agreements,   licenses,  orders,  certificates,   powers  of attorney,   consents,    
undertakings,   leases,   grants,   concessions,    records   of  Central Depository  Comp any  of 
Pakistan  Limited  and  all  other  instruments  or  documents  of every  description  and  nature  
whatsoever  relating  to  the  Corporation  and  no  objection shall be entertained by any court, 
tribunal or authority in regard to such substitution or on the ground that any such contract,  agreement  
or document  as aforesaid  was, or is, I, or with, the name of the Corporation  and not the Company. 
(6) All  employees   of the  Corporation  shall  be  deemed   to  be  employees   of the 
Company on the same remuneration  and other conditions of service, rights and privileges including  
but  not  limited  to  the  provisions  as  to  their  pension,  provident   fund  and gratuity,  as the  case  
may  be, and  other  matters  as were  applicable  to them  before  the conversion, including all 
existing retirement benefits of the employees  whether funded or non-funded: 
Provided that ⸻ 
(i)        Notwithstanding   anythi ng  contained  in this Act  or any other  law, or any 
decision  of any  court  or  tribunal,  the  employees  of the  Company  shall 
continue  to  be governed  by  non -statutory  contractual  terms,  conditions, 
  
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rules  and  regulations  which  shall  not  acquire,  or  be  deemed  to  hav e 
acquired or be treated as having acquired, statutory status; 
(ii)       no  person  deemed  to be employed  by  the  Company  under  this  section 
shall be entitled to any compensation  or benefit  as a consequence  of the 
conversion of the Corporation into a Company; 
(iii)      The salaries, emoluments and all other terms of service of employees, whether    
permanent    or   contractual, shall   not   be   changed   to   their disadvantage; 
and 
(iv)     Pensions and other existing   obligations   of the  Corporation   to retired 
employees shall not be changed to their disadvantage. 
(7) Notwithstanding the provisions of section 146 of the Companies Ordinance, the Company   
shall,   upon   conversion,   continue   all   business   and   undertakings of the Corporation as were 
being carried on immediately prior to the commencing date. 
4. Power to pass orders for the transfer of assets.⸻ (1)  During  the validity  period  and 
subject to a prior Company  request, the Federal Government  may issue orders providing  for the 
transfer of specified assets to a relevant entity substantially  on the terms  set forth in the relevant 
arrangement. 
(2) The orders shall binding on the Company, the relevant entity and any other person having 
any right, claim or liability in relation to the Company or any relevant entity. 
(3) As and from the date specified  in  the order,  the  specified  assets  shall, by virtue and 
to the extent provided  in  the relevant  order,  stand  transferred to,  and  vest  in, the relevant entity,  
without any conveyance, alienation or assignment and without any further act,  deed  or registration  
and  without  discharging  or  invalidating  any  contract,  and  be subject to the terms of the relevant 
order in all cases. 
1[(4) Representation on the Board of Directors and all  other rights and privileges of 
shareholders of the company, or any of its subsidiary companies, shall be proportionate to 
shareholding] 
1[* * * * * * *] 
(5) The Federal Government  shall carry out or cause to be carried out valuation of the assets 
of the Company,  and its subsidiary  companies  carrying  on air-transport  business, by a recognized  
valuator  before  transferring  any  shares  of these  companies  to a third party. 
1[(6) Notwithstanding anything contained  in the Public Procurement Regulatory Authority 
Ordinance,  2002 (XXII  of 2002)   and  the  rules  and  regulations   made  thereunder,  th e 
procurement rent  and  lease  of aircraft  and  parts  thereof an d such other  items as the Federal  
Government may from time to time  specify  through  a notification   in the official  Gazette  by the 
Company  shall  be made through  one or more committees in the manner prescribed  by the rules.] 
 
1 Subs. and omitted by Act No. LVII of 2023, s. 3. 
 
  
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5. Guarantees  to  remain  in  force. ⸻ Notwithstanding   the  repeal   of the  PIAC  Act,  
all guarantees   given   by   the   Federal   Government   to  any  person,   including   foreign   or   
local institutions, to secure any of the liabilities of the Corporation  shall remain  in full for ce and 
affect as though they were given on behalf of the Company. 
6. Waiver from taxes, duties, fees etc. ⸻ The Federal  Government  may, by notification  
in the Official Gazette, waive any tax, duty, fee or any other charge that may be payable under any 
Federal law for the time being in force. 
7. Name and Headquarters of Company. ⸻(1) The name of the Company shall not be 
changed without the consent, in writing, of the Federal Government. 
(2) The Headquarters of the Company and any of its subsidiary companies  carrying on air-
transport business shall be at Karachi. 
8. No gain or loss. __ Neither the conversion nor the transfer of any asset of the Company 
through an order shall given rise to any gain or Loss under the Income Tax Ordinance, 2001 (XLX 
of 2001). 
9. Act to override.⸻ The provisions of this Act and the orders issued hereunder shall have 
effect notwithstanding anything to the contrary contained in any other law for the time being in force. 
10. Removal of transitional difficulties.⸻ if any difficulty arises during the validity period 
in giving effect to any provision of this Act,  the Federal Government  may, be notification  in the 
official Gazette, make such provisions  as may appear to it to be necessary  for the purpose of 
removing the difficulty. 
11. Repeal.⸻ (1) The PIAC Act is hereby repealed. 
(2)       On repeal of PIAC Act under sub-section (1), nothing contained in the said Act shall 
be applicable to the Company, its shareholders or any other person that may  have had interest in the 
Corporation immediately prior to the conversion.