Nepal’s Infrastructure Tribunal Bill, 2083: Faster Justice for Projects, New Rules for Arbitration

1. What Is Nepal's Proposed Infrastructure Tribunal?

Nepal proposes to move infrastructure, procurement, public-private partnership ("PPP") and land-acquisition disputes out of the ordinary courts and into a new, specialised tribunal with a 90-day decision deadline. The Ministry of Law, Justice and Parliamentary Affairs ("MoLJPA") has circulated for public consultation a draft bill to provide for an Infrastructure Tribunal (the "Bill"), whose short title is the Infrastructure Tribunal Act, 2083 (2026) (the "Act").

The Bill would establish the Infrastructure Tribunal (the "Tribunal") and, through Section 30, amend the Arbitration Act, 2055 (1999) (the "Arbitration Act"). Those amendments move the High Court's supervisory role over infrastructure-related arbitrations to the Tribunal. Less visibly, they also shorten the claim, defence and rejoinder timelines for arbitration in Nepal generally, well beyond infrastructure.

Section references are to the Bill unless stated otherwise, and quotations from the Bill are unofficial English translations of the Nepali text. The Bill is a consultation draft and may change before it is tabled in the Federal Parliament.

2. Why Does Nepal Want a Dedicated Infrastructure Tribunal?

MoLJPA's statement of reasons and effects accompanying the Bill under Section 6(2) of the Legislation Act, 2081 (the "Statement") sets out the Bill's intent. Contract, land-acquisition and compensation disputes have been brought as writ petitions, ex parte or short-term interim orders have followed, and "hundreds of projects across the country" have remained stuck in litigation for years. The Statement links this to time and cost overruns, loss of project feasibility and prolonged denial of public services, and states that project work must not stop while a case proceeds. It also acknowledges a recurring annual cost to the Government of Nepal ("GoN").

Article 127 of the Constitution of Nepal permits specialised courts and tribunals to be established by federal law. The Bill should therefore be judged on whether its design delivers speed while preserving independence, party autonomy and predictability.

3. Who Would Sit on the Tribunal?

The Bill proposes a three-member Tribunal, seated in the Kathmandu Valley with jurisdiction throughout Nepal (Section 3).

Members must be Nepali citizens and must not have applied for or hold foreign permanent residency. Persons convicted of corruption, money laundering or other offences involving moral turpitude, and persons who are insolvent, blacklisted or penalised by a court or regulator, are ineligible (Section 3(5)). The expert Members serve five-year terms, renewable once, and may be removed by the Council of Ministers (Sections 4 and 5).

No Member may hear a case in which they have a conflict of interest (Section 8(1)). If the Chairperson is conflicted, the two expert Members hear the case. If the Chairperson and one Member, or all three, are conflicted, the case goes to the High Court, which must decide it within 60 days (Section 8(2)).

4. Which Disputes Would Go to the Tribunal?

Section 6 of the Bill proposes that, notwithstanding anything in prevailing law, the Tribunal have the power to initiate and dispose of cases at first instance in nine categories. The reach of those categories depends on the definition in Section 2(b):

"'Infrastructure construction' means the construction, repair and maintenance of physical structures such as roads, hydropower and electricity transmission lines, airports, information technology, urban development and drinking water."

Only Section 6(d) yields to contrary agreement. Pending cases within Section 6 before any court or body transfer to the Tribunal, with files to be sent within one month of its formation (Section 25).

5. How Fast Would Cases Be Decided?

The Bill builds a compressed track from filing to final appeal, run under the Summary Procedure Act, 2028 (1972) (Section 11).

• Benches (Section 7): A single Member may conduct proceedings. The Chairperson and one Member may decide a case if they agree. A full bench decides unanimously or by majority; if all three differ, the file goes within three days to the High Court, which must decide within 60 days.
• Evidence (Section 9): The Tribunal may order any body or official to produce files or explanations. An official whose non-compliance delays the case may face contempt, and the Tribunal must order reasonable compensation from that official for any resulting loss.
• Deadlines: Decision within 90 days of filing (Section 10); appeal to a Special Bench of the Supreme Court, including a subject-expert judge, within 30 days, to be decided within 90 days (Sections 12 and 23).
• Settlement (Section 13): On application by both parties, the Tribunal may facilitate mediation or settlement at any stage.
• Filing and service (Section 14): Documents may be filed through the local District Court, which must forward them within three working days and serve notices within ten days (excluding travel time).
• Interim relief and contempt (Sections 15–16): The Tribunal may issue interim orders. Contempt is punishable by up to six months' imprisonment, a fine of up to NPR 5,000, both, or another appropriate order.
• Execution (Section 17): Unperformed decisions and settlements are executed through the District Court.
• Limitation (Section 21): Where no other law sets a period, six months from the cause of action.
• Continuity of works (Section 22): Filing a case is not by itself a ground to stop public infrastructure work, unless a court or the Tribunal orders otherwise.
• Hearings (Section 24): Proceedings may be conducted by video conference.

Would Project Work Stop During a Dispute?

Section 22 gives statutory force to the principle, long familiar to construction practitioners, that a dispute should not by itself halt the works. Under the FIDIC Conditions of Contract for Construction (Red Book, 1999), Sub-Clause 20.4 requires the contractor to continue to proceed with the works during a dispute unless the contract has been abandoned, repudiated or terminated, and the 2017 editions retain a comparable obligation. Larger public works contracts in Nepal, particularly donor-funded ones, commonly use FIDIC-based conditions, so many contractors are already bound by this duty contractually.

India took a firmer statutory route. The Specific Relief (Amendment) Act, 2018 inserted Section 20A into India's Specific Relief Act, 1963, barring courts from granting injunctions in suits involving infrastructure contracts where an injunction would impede or delay the project. It paired this with designated special courts and a 12-month disposal target (Sections 20B and 20C). Nepal's Section 22 is narrower. It removes the filing of a case as an automatic ground for stopping work, but preserves the power of courts and the Tribunal to order otherwise, including through interim orders under Section 15.

Two questions remain open. Section 22 does not say whether it affects a contractor's contractual right to suspend or slow work for non-payment, which contractors and lenders will want confirmed. Nor is it clear whether it reaches physical obstruction by local communities, a frequent cause of stoppage on Nepali projects that Section 6(d)(3) brings within the Tribunal's jurisdiction.

6. What Changes for Arbitration in Nepal?

Four of the five amendments apply only to agreements within the Tribunal's jurisdiction. The Section 14 amendments contain no such limitation and, as drafted, would apply to every arbitration governed by the Arbitration Act.

As a result, for infrastructure-related arbitrations seated in Nepal, the Tribunal would replace the High Court as the supervisory court for appointment, removal, setting aside and stay of enforcement. The High Court retains these functions for all other arbitrations.

7. What Should Foreign Investors, Contractors and Lenders Watch For?

The Bill's objectives are sound, but several features deserve attention during consultation.

1. A statutory time bar for all arbitrations. The new 30-day notice requirement in Section 14(1) of the Arbitration Act is not limited to infrastructure, has no "unless otherwise agreed" carve-out, and extinguishes late claims. It also requires notice to the "arbitrator", who will often not yet exist within 30 days of the triggering event. Layered on contractual regimes such as FIDIC's 28-day claim notices and dispute-board procedures, it creates a real risk of meritorious claims being forfeited on technicalities.
2. Independence of the forum. Two of the three Members are appointed, and may be removed, by the Council of Ministers, while GoN entities will usually be a party to the disputes heard. Foreign contractors, sponsors and lenders will assess whether the Tribunal is sufficiently independent from the government counterparty, including against the protections in Nepal's investment treaties.
3. Writ jurisdiction remains. The Statement aims to keep these disputes outside the ordinary courts' jurisdiction, but Section 6 cannot displace the constitutional writ jurisdiction of the Supreme Court and High Courts (Articles 133 and 144 of the Constitution). Litigants may still seek writs, so the delay the Bill targets may persist unless the courts exercise restraint.
4. Uncertain scope. The Tribunal's jurisdiction may reach further than its title suggests, for four reasons. First, Sections 6(a), (b) and (d) refer to infrastructure "including public procurement" rather than to public infrastructure only, and the Section 2(b) definition covers hydropower without distinguishing public from private projects. A dispute between foreign and Nepali partners in a privately developed hydropower project, or a call on a performance guarantee issued for it, could therefore fall within Section 6(a) or 6(b). Second, Section 6(d)(5) adds "other disputes related to the project" with no further limit. Third, Section 6(g) covers the selection and termination of public procurement contracts for goods and supplies, which need not involve construction at all. Fourth, GoN may add new categories by Gazette notice under Section 6(i), without parliamentary approval. As a result, investors may not know at the contracting stage which forum will hear their dispute.
5. Relationship with arbitration agreements. Only Section 6(d) yields to the contract. The Bill does not say whether the Tribunal must decline jurisdiction over joint-venture or guarantee disputes under Sections 6(a) and 6(b) where the parties have agreed to arbitrate.
6. A new appeal against arbitration rulings. At present, an application to set aside an arbitral award goes to the High Court. For infrastructure-related contracts, the Bill would send it to the Tribunal instead (Section 6(c)). Section 12 then allows any party dissatisfied with a Tribunal decision to appeal to the Supreme Court. If that right of appeal extends to setting-aside decisions, infrastructure awards would pass through two levels of court review, first the Tribunal and then the Supreme Court, before becoming final. That would delay finality, contrary to the Bill's aim, so the final text should state whether Section 12 applies to these decisions.
7. Transition and drafting gaps. The Act commences immediately (Section 1(2)), but the Tribunal exists only once notified in the Gazette, leaving it unclear where infrastructure arbitration applications go in the interim. In addition, Section 7 does not address disagreement on a two-Member disposal bench, Section 16(1) refers to the "Authority" rather than the Tribunal, and a 90-day deadline is ambitious for complex construction disputes heard under summary procedure.

8. What Should Investors and Contractors Do Now?

Investors and contractors with Nepali exposure can act now, before the Bill is finalised, ideally with input from a law firm in Nepal experienced in infrastructure arbitration.

• Review dispute clauses. Check existing and draft EPC, PPP, JV and supply contracts for how they would interact with Section 6, particularly whether Section 6(d)'s "unless the works contract provides otherwise" carve-out is engaged.
• Reconsider the seat. Where procurement rules and the counterparty permit, a foreign seat and institutional rules may keep a dispute outside the Arbitration Act's amended timelines and the Tribunal's supervisory role.
• Tighten claims management. Build a 30-day internal notice protocol into project governance now, so the Section 14(1) bar cannot be triggered by default if it is enacted. Claims for price adjustment and variations in public contracts, among the most common sources of dispute on Nepali public works, would be particularly exposed.
• Audit pending matters. Identify court cases and arbitration-related applications that may transfer to the Tribunal under Section 25.
• Engage in consultation. Industry bodies, lenders and foreign contractors can submit comments to MoLJPA on scope, independence and the Section 14 amendments while the Bill is still in draft.

9. What Happens Next?

The Bill would give Nepal a single expert forum for infrastructure disputes, a 90-day decision target, a direct appeal to a specialist Supreme Court bench, and a statutory presumption that public works continue during litigation. These are credible responses to a real problem that has deterred infrastructure investment.

To earn the confidence of foreign investors and lenders, however, the final text should confine the Section 14 time bar to its intended scope or allow parties to contract out of it, clarify the Tribunal's jurisdiction and its relationship with arbitration agreements, and strengthen the Members' security of tenure. We will continue to track the Bill through consultation and Parliament.

This article is a general summary of a consultation draft and is not legal advice. Specific advice should be sought on particular circumstances.