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September 2014 Economy and Policy

Published on: 2014-09-18 00:00:00     648 times read    0  Comments
--By Gunja B. Khadka
 
Nepal Inc. is finding mediation way for dispute resolution more effective that than fighting it over in the courts. 
 
• Italian civil contractor Impregilo S.P.A. filed a case in an international court claiming Rs. 5.1 billion payment from Nepal Electricity Authority (NEA). But the dispute was finally settled through mediation on 16th Shrawan, 2068 under which NEA was required to pay only Rs. 740 million. 
 
• Two renowned housing companies— The Comfort Housing and Empro Housing—have resolved dispute between them that started in 2061 BS through mediation.
 
• Mediation efforts are going to resolve the dispute between H&B Development Bank and Nepal Cooperative Institute regarding good-for-payment cheques of Rs. 820 million.
 
Though each year hundreds (if not thousands) cases are still filed in the Nepali courts, these few examples indicate growing popularity of mediation way to settle disputes. The major reasons behind this popularity are faster speed, better impartiality and lower cost in the process of dispute resolution. But as the awareness about such faster and simpler mechanism is still low among the people, even corporates, the tendency to go to the courts is not falling down significantly. 
 
Since the mediation law was introduced in Nepal only in 2011, lower level of awareness about it should not be a surprise. Institutes like Nepal Mediators Society (NMS) have been extending help in this. Its chairperson and senior advocate Ram Prasad Bhattarai claims that mediation will continue to evolve in Nepal due to its cost effectiveness. 
 
The Mediation Act of 2011 defines mediation as a process to be followed to settle a dispute or case with the assistance of a mediator. Section 2 of this Act also defines a mediator as a person or organization who negotiates between the mediation parties and motivates them to reach voluntary agreement. Mediation can be followed in all cases except in criminal cases.
 
Scenario of mediation
A large number of business-related cases are directly filed in courts. Along with this, complains of court orders/rulings being not implemented are also filed in the courts. In such scenario, mediation can be anappropriate way to resolve differences. It is not an easy task for the judges to resolve business disputes to the satisfaction of both the parties. The judges are required to have deep understanding of the technicalities of the business and that might not be possible for judges that do not specialize in business cases. And, Nepal is still not in a position to have specialized judges for business-related cases. 
 
NMC claims that there are 2,441 mediators in 92 mediation centres across the country of which 21 are qualified mediator trainers. These centres have resolved 321 disputes so far. 
 
Uses and benefit
Presently banking-related cases with a total claim amount of Rs. 25 billion are pending trial at the Debt Recovery Tribunal (DRT). Bed Prasad Uprety, sub-registrar at the commercial bench of Patan Appellate Court, opines that resolving these cases through mediation will be highly cost-effective. Parties have to pay 2 percent of consideration amount as the court fee if they go to the court. But this cost goes down considerably if they go to the mediators.
 
Know the mediator
Mediator is a neutral person who helps the parties to reach a resolution in a dispute. It is an informal, confidential and flexible process in which the mediator helps the parties to understand the interest of everyone involved, and their practical and legal choices. Mediation programmes have proved to save the parties time and money and improve satisfaction of the outcome. They help the parties to communicate better, explore legal and practical settlement and reach an acceptable solution of the problem. For every meeting, at whatever stage of the process, the mediator as process manager needs to be clear about the purpose of the meeting as well as possible benefits and risks. 

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