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Arbitration vs. Litigation in Nepal: Choosing the Right Path

Arbitration vs. Litigation in Nepal: Choosing the Right Path

Litigation in Nepal
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When business disputes arise, Nepalese parties often face the choice between arbitration and traditional litigation. Each option has its advantages and trade-offs.

Pros & Cons of Litigation
Litigation before Nepal’s courts offers formal, public adjudication and is mandatory for certain legal disputes (e.g., criminal, family law). However, drawbacks include:
– Procedural backlog and long delays;
– Limited confidentiality;
– Higher legal costs and emotional strain.

Advantages of Arbitration
Arbitration provides:

  1. Speed – Awards typically issued in 120 days, versus several years in courts .
  2. Privacy – Processes are confidential, protecting business reputations.
  3. Expertise – Parties can choose arbitrators with sector-specific expertise.
  4. Limited Appeals – Judicial scrutiny is narrow, promoting finality.

Limitations & Considerations
– Not suitable for public interest or criminal cases.
– Initial cost may be higher due to arbitrator fees.
– Domestic awards need court enforcement, though process is straightforward.

Case Study in Construction
Following the pandemic, Nepal saw a rise in construction-sector arbitrations due to project delays and cost disputes—underscoring arbitration’s appeal in technical sectors kathmanduarbitration.com+1notarynepal.com+1.

Conclusion
Arbitration is often faster, confidential, and less bureaucratic than litigation. Suitable for commercial, construction, or infrastructure disputes, it’s turbo-charging Nepal’s dispute-resolution landscape.

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