Effectiveness of Arbitration in Nepal Construction Dispute Resolution

Abstract

This study looks at how arbitration works in resolving disputes related to construction contracts in Nepal. It focuses on how the procedures and the arbitration process affect whether people think it is successful. The study used a combination of methods to analyze information from 121 people involved in these disputes along with information from reports by the Nepal Council of Arbitration. The results show that the skills of the arbitration tribunal, the size of the tribunal and how evidence is presented are very important for making arbitration effective. On the other hand the value of the claim and complexity of the dispute do not seem to make a difference on effectiveness of arbitration. People do not think arbitration is an affordable way to resolve disputes. It takes an average of 430 days to reach a decision, which is much longer than the 120 days required by law as stated in the Section 24 of the Arbitration Act 2055 (1999). The study concludes that for arbitration to be really successful it depends more on the people involved being honest and working together than on the laws themselves. The study suggests that changes should be made to improve how arbitration decisions are enforced which would make arbitration more effective in resolving construction contract disputes in Nepal.