Arbitration and mediation as a legal means of dispute resolution was in practice in Nepal much before the country welcomed democracy and a codified judicial system. During the Panchayat era, for example, the Panchayat was an informal tribunal of five gentlemen chosen from among the electorate of a village to settle disputes between local people and deliver justice. However, it was subordinate to the court of law. In the Licchavi period, the Panchali, also called Pancha Sabha, had the power to issue judgments on local disputes. The concept of arbitration in its modern sense was first found in government contracts. Currently, we have a plethora of laws promoting amicable settlement of disputes.
Cases of civil nature can be mediated at any stage even if they have entered the court of law. Mediation can happen before evidence collection, after evidence collection or even during the implementation of judgements. If the Bench has reasons to believe that the dispute can be resolved through mediation, the judge can pass an order, directing the parties to sit for mediation before the mediation center of the concerned District Court or the High Court.
The Mediation Act, 2068 BS (2011) and its rules framed in 2070 BS (2013) provide for the procedure of mediation to settle a dispute in a speedy and simple manner. Section 3 of this Act provisions that if parties intend to settle a case pending in the court through mediation, the adjudicating authority may pass an order to refer it to a mediation center for reaching a compromise.
After passing the order, the court officials engaged in providing dates of appearances to the parties would request the parties to appear before the mediation center on a specified date. Then, the parties themselves, not their legal representatives, would (in person) have to appear before the center on a specified date to participate in a discussion for reaching a negotiated settlement.
Before entering the mediation process, the parties must choose a mediator from a roster of mediators maintained at the District Court. After the selection of a mediator, the mediation process formally begins. Discussions can happen in phases—up to three phases. In case of failure on the part of the mediator to facilitate a unanimous decision despite rounds of talks between the parties, the center must furnish a report announcing the termination of the mediation process. Afterwards, the court itself should hear the case under normal proceedings.
The District Court Regulations, 2075 empowers the District Court Registrar to maintain a roster of mediators. Any individual from the legal fraternity, teaching, social service or other sector may be enlisted as a mediator, provided that the person has received training on mediation and has not been convicted under offenses involving moral turpitude. Rule 52 of the regulations has given the judges the authority to initiate a case for mediation by passing an order to that effect.
In order to resolve disputes through mediation, judges may give the parties concerned up to three months of cooling period for reaching an amicable settlement. Rule 53 of the regulations prescribes that the Registrar of the District Court should facilitate the selection of the mediator on the basis of consensus among the parties, whereas Rule 57 prescribes procedures for mediation. If a party or parties fail to appear before the mediation center on a stipulated date, and the mediation process cannot proceed as a result, officials of the center should furnish a report to the court, stating that the mediation could not proceed.
However, if the parties reach an amicable settlement, the mediator should prepare a compromise document by duly stating the details of adjustment. Later, the compromise document is presented before the bench and the presiding judge approves the document through consent of the disputants in writing along with their signatures. This document is also a form of court verdict, which is duly archived in court case file. Both High Court and Supreme Court Regulations recognise mediation as an agreeable means for dispute resolution and the arrangements are at par with District Court Regulations.
Mediation under major laws
The National Civil Code, 2017, a general substantive law in Nepal, has provisions for mediation in civil matters. Take divorce, for example. Section 97 of the Code, 2017 provides that if a husband or wife has filed a petition for divorce in district court, the court must pass an order, directing the parties to sit for mediation. If the court fails to make conciliation between husband and wife through counseling, it must issue a divorce order within a year of the petition. There can be a compromise deed for divorce, of course.
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