How Nepal Can Transform Its Mediation Landscape With Insights From Singapore's Success

Mediation has long been a part of Nepalese tradition, where disputes were traditionally settled by village elders. This community-based approach was formalized with the Local Self Governance Act of 1999, which empowered Village Development Committees (VDCs) to resolve various disputes through mediation. Despite this, it was not effectively implemented. A significant development occurred in 2011 with the enactment of Nepal's Mediation Act, 2068, and the Constitution's Article 51(k)(2) mandates the use of alternative dispute resolution methods for ordinary disputes.

Traditional community mediation in Nepal is now a regulated practice. Each district has a committee overseeing the process, while the Mediation Council, led by a senior judge and including a Registrar, handles the licensing and management of mediators. In the mediation process, both parties select a mediator each, and the VDC appoints a third mediator to ensure a diverse panel in terms of ethnicity and gender. This model of community mediation offers valuable lessons for other nations.

Community mediation is favoured for its informal, convenient,and flexible nature. However, it has limitations in certain scenarios. For instance, in complex commercial matters involving parties belonging to different nationalities. In such instances, community mediation may not be the best option as these cases often require specialized expertise that community mediation may not adequately provide.

The Nepal International ADR Centre (NIAC) plays a crucial role in offering international commercial dispute resolution services, fostering an environment where both domestic and global parties can seek effective mediation. Under NIAC's oversight, the KathmanduCommercial Mediation Center specializes in addressing complex commercial disputes through mediation, striving to provide a balanced and efficient process. As a founding member of the Asia PacificCentre for Arbitration and Mediation (APCAM), NIAC is positioned at the forefront of regional arbitration and mediation efforts, aiming to enhance its service offerings for a diverse clientele. Despite these significant strides, Nepal's mediation infrastructure faces challenges in fully addressing the complexities of international commercial disputes. The system is still maturing, and there is a need for continued development to handle sophisticated cases with the level of expertise and infrastructure found in leading global mediation hubs. Strengthening this infrastructure could involve advanced training for mediators, expanding resources, and fostering international partnerships to better serve the needs of global business communities.

Mediation is increasingly favoured for commercial disputes due to its confidentiality, which protects sensitive business information and helps preserve relationships. It is used in variouscontexts, including insurance claims, construction disputes, and high-stakes contractual issues. By facilitating open dialogue, mediation helps identify mutual interests and maintain business relationships.

Despite the presence of the NIAC, Nepal has not yet emerged as a leading destination for mediation. The country's journey in mediation mirrors that of Singapore, which also began with community-based practices where respected elders mediated disputes. In Singapore, these traditional methods faded with the pressures of urbanization and industrialization, only to be revitalized in the 1990s by Western mediation trends. A pivotal moment came when a committee proposed the creation of a commercial mediation centre under the Singapore Academy of Law, resulting in the establishment of the SingaporeMediation Centre (SMC) in 1997. SMC mediators are subject to rigorous training and evaluation, ensuring high standards of practice. Further advancements, including the formation of the SingaporeInternational Mediation Institute and the Singapore International Mediation Centre in 2013, and tax incentives for mediation, have solidified Singapore's status as a topglobal mediation hub.

For Nepal to follow a similar trajectory and elevate its mediation profile, there is a pressing need to advance its commercial mediation framework. By investing in world-class training for mediators at the Kathmandu Commercial Mediation Center and exploring the potential benefits of signing the Singapore Conventionon Mediation, Nepal can enhance its appeal as a robust venue for international dispute resolution. Embracing these measures would not only strengthen Nepal's mediation infrastructure but also position it as a competitive player in the global mediation arena, ultimately fostering greater trust and efficiency in resolving complex commercial disputes.

Akash Gupta, Arushi Bajpai, and Harsh Mahaseth are Assistant Professors at Jindal Global Law School, O.P. Jindal Global University. Views are personal.