In a groundbreaking decision, the Supreme Court of Nepal has upheld the legitimacy of digital arbitration clauses, recognizing them as enforceable and binding under current arbitration law. The case, involving a dispute between a tech service provider and an e-commerce platform, hinged on whether an arbitration clause embedded in a digital contract was legally valid.

The court ruled that clickwrap agreements, where users accept terms and conditions online, including arbitration clauses, are equivalent to physical contracts if parties willingly consent. This sets a major precedent for Nepal’s growing digital economy, where many agreements are formed electronically.

“This ruling gives clarity to thousands of businesses operating online,” said Advocate Binita Pandey, a legal expert in cyber law. “It ensures that arbitration clauses in digital contracts will be honored, protecting both consumers and businesses.”

The verdict is especially important as Nepal’s online services sector continues to expand, with increasing cross-border transactions and service-level disputes. The judgment reinforces the flexibility and adaptability of arbitration in modern commercial relationships.

This decision also supports the government’s recent efforts to digitize dispute resolution processes. It aligns with the 2025 Amendment Bill, which supports virtual hearings and online submissions. Legal professionals expect this ruling to promote the use of arbitration clauses in digital agreements and reduce unnecessary litigation in courts.