Nepal is witnessing a notable increase in arbitration cases, particularly within the construction and infrastructure sectors, according to recent data from the Nepal Arbitration Centre (NAC) and private law firms. This rise is being attributed to post-pandemic project delays, cost overruns, and ambiguous contract terms, which have led to a growing number of disputes between contractors, government bodies, and developers.

Construction-related disagreements—especially those involving public infrastructure such as roads, hydropower projects, and real estate developments—are increasingly being resolved through arbitration rather than litigation. Experts say arbitration is being favored due to its confidentiality, industry-specific expertise, and faster resolution times.

“Arbitration offers a practical solution for large-scale disputes where technical knowledge is essential,” said Prakash Gautam, an arbitrator with over 15 years of experience in construction law. “It saves both time and public resources.”

The growth in cases has also led to a rise in demand for qualified arbitrators with technical backgrounds, including engineers, architects, and project managers. Institutions are now expanding training programs to prepare a broader panel of professionals capable of handling complex cases.

The trend highlights the importance of clearly drafted contracts, particularly arbitration clauses that specify governing law, procedural rules, and seat of arbitration. Many organizations are now seeking pre-dispute consultation to ensure their agreements are dispute-ready.

As Nepal continues to invest in large-scale infrastructure and urban development projects, the role of arbitration in mitigating and resolving disputes is expected to grow even further in the coming years.