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:
- Speed – Awards typically issued in 120 days, versus several years in courts .
- Privacy – Processes are confidential, protecting business reputations.
- Expertise – Parties can choose arbitrators with sector-specific expertise.
- 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.
