The Supreme Court of Pakistan has struck down the controversial amnesty deal protecting President Asif Ali Zardari and his allies from past graft charges, dealing a serious blow to the embattled leader.  On December 16, a 17-member bench of the court headed by the chief justices declared unconstitutional the amnesty decree known as the National Reconciliation Ordinance (NRO), which pardoned thousands of politicians and bureaucrats who faced graft and criminal cases.

The court ruling has increased pressure on President Zardari to step down and face corruption and criminal charges that stand revived after the verdict. Legal experts said the judgment could open the way for a challenge to the legitimacy of Zardari’s election, given that he was elected while the immunity was in place.

“The NRO is in conflict with the constitution,” the court headed by Iftikhar Mohammed Chaudhry declared in a late night decision. The court has also ordered restoration of all cases against Zardari, including a money laundering case in a Swiss court.

The judgment would also affect the defense and interior ministers and some key advisers to the president who also benefited from the amnesty. Many of them face arrest after the decision.

The Supreme Court earlier this year said the parliament had to ratify the ordinance by November for it to stay in effect. But it did not, leaving it to the court to decide its fate.

The opposition and lawyers hailed the decision as a landmark. “It is a defining moment for the judiciary, “said Hafeez Pirzada, a former law minister and a leading constitutional lawyer.

The development has deepened political turmoil in the Muslim nation in the midst of a critical battle with Islamic militancy. Tension mounted in Zardari’s home province of Sindh where his supporters protested against the decision. Incidents of sporadic firing were also reported in Karachi. However, his party was distancing itself from any of the unrest. “We respect the court’s decision,” said Farhatullah Babar, the chief spokesman for Zardari. He said the president was prepared to face any situation.

There is no indication that Zardari, aged 53, would resign. However, his hold on power appears to have weakened. He is also under pressure from his opponents and his hand-picked prime minister to surrender his sweeping powers, including the power to dismiss the parliament and appoint military chiefs. “With no moral authority it will be difficult for the president to stay in power” said Hasan Askari Rizvi, a former professor of politics at Punjab University and a leading political commentator.

The NRO was introduced in October 2007 by the then president, General Pervez Musharraf, as a part of a deal brokered by the US and Britain that allowed Benazir Bhutto, the former prime minister, to return home from self exile.

Bhutto was assassinated just over two months later, leaving Zardari, her widower, to lead her party to victory in the national parliamentary elections in February 2008 and then become president after General Musharraf, under threat of impeachment, resigned in August 2008.

Corruption is endemic and widespread among Pakistan political leaders, but the scale allegedly involving Zardari was shocking. An investigation, which spanned more than ten years, provided an extraordinarily detailed look at high-level corruption in Pakistan. The president has been accused of accumulating assets worth 1.5 billion across the world through illegal means. A worldwide search for properties secretly bought by Zardari found that he bought properties in the US, Britain, Spain, France and other countries through offshore companies he owned and through frontmen. In 1996, he allegedly bought a $4-million, 355-acre estate south of London.

A report produced before the court by National Accountability Bureau, the country’s top anti-corruption body, said the riches of Zardari were “beyond his means.”

An official of the bureau informed the court that some 60 million dollars received in illegal commissions and kickbacks for contracts awarded to foreign companies had allegedly been deposited in the Swiss bank accounts held by Zardari and Benazir Bhutto.

Out of it, 13 million dollars were received in commission from two Swiss companies, Cotecna and Société Générale de Surveillance, after they were awarded a contract for pre-shipment inspections for imports to Pakistan.

This enormous wealth was largely made during his wife Bhutto’s two terms in office as prime minister in the 1990s, investigators said. A Swiss court had convicted Zardari and Bhutto, and sentenced them to six months in prisn, which was later suspended on appeal.

Zardari never appeared before the Swiss court, even after he was released from jail, and he stayed in New York on the pretext that he suffered from mental illness. Zardari spent total 11 years in jail on corruption and murder charges. He was freed on bail in 2004 and was allowed to leave the country.

In the largest single payment investigators had discovered, a gold bullion dealer in the Middle East was shown to have deposited at least $10 million into an account controlled by Zardari after the Bhutto government gave him a monopoly on gold imports. The money was reportedly deposited into a several bank accounts for companies owned by Zardari.

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