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Supreme Court of Nepal Confirms Jurisdiction Over a Cross-Border Dispute and Treats Foreign Law as a Question of Fact

Authored bySameep Khanal

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In this article

Introduction
Background
Procedural History
Issues
Submissions of the Parties

Analysis
Orders
What This Means for Universities, Lenders and Other Parties to Cross-Border Contracts
Frequently Asked Questions

Introduction

The Supreme Court of Nepal (the "Court") has held that a Nepali court can hear a claim on a contract with a foreign element where the defendant lives in Nepal, even if the contract refers to a foreign statute. The Court also held that foreign law is a question of fact, which the party relying on it must prove. Where it is not proved, the Court applies Nepali law.

The decision is Sanoj Tulachan v. University of Warwick, Case No. 081-DF-0003 (the "Judgment"), delivered by a Full Bench of Justice Balkrishna Dhakal, Justice Meghraj Pokharel and Justice Shrikanta Poudel on 1 March 2026 (17 Falgun 2082 BS).

The Court held that a contract was formed when the University accepted the student’s application, and that a later credit agreement was part of the same contract. Applying the private international law principles of connecting factors and forum non conveniens, it held that Section 141 of the Consumer Credit Act 1974 (UK) (the "CCA") does not oust Nepali jurisdiction. It applied Nepali contract law, held the claim was within limitation and upheld the lower decisions.

We consider the Judgment in more detail below.

Background

The University of Warwick (the "University") is a university in Coventry, United Kingdom. Sanoj Tulachan (the "Student") lives in Lalitpur, Nepal. The University’s offer letter of 24 September 2012 stated the fees and referred to the terms and conditions on its website. The Student applied on that basis and was admitted in October 2012 to a PhD programme in Politics and International Studies, enrolling on 29 October 2012 (13 Kartik 2069 BS).

On 15 April 2013 (2 Baisakh 2070 BS), the parties signed a one-page credit agreement to pay the unpaid balance of the fees by instalments. It was headed “Credit Agreement Regulated by the Consumer Credit Act 1974” and repeated that wording in its text (the "Credit Agreement").

The Student did not pay, and returned to Nepal without completing the programme. The University’s legal representative sent reminders by email, including on 9 May 2014, 15 May 2014, 11 November 2015 and 25 February 2016. On 8 January 2016 (24 Poush 2072 BS), the Student replied by email accepting that GBP 8,487.00 was payable.

The University sued for GBP 8,487.00 (NPR 11,37,267 at the prevailing rate) for breach of contract, together with NPR 5,00,000 in legal costs.

Procedural History

The District Court. The University filed its claim in the Lalitpur District Court on 20 February 2017 (9 Falgun 2073 BS). On 30 August 2017 (14 Bhadra 2074 BS), the District Court (Case No. 073-CP-0748) ordered the Student to pay NPR 11,37,267 and rejected the claim for NPR 5,00,000 in costs, as there was no accepted measure for it (the "District Court Decision").

The High Court. The Student appealed to the High Court, Patan (Case No. 074-DP-1030), which upheld the District Court Decision on 5 August 2018 (20 Shrawan 2075 BS) (the "High Court Decision").

The Supreme Court. On 28 September 2020 (12 Ashwin 2077 BS), the Court granted leave to review under Section 12(1)(a) of the Administration of Justice Act, 2073 (2016), because the case raised questions on the application of Nepali contract law, jurisdiction, and Section 16 of the Civil Code, 2074 (2017) and Section 20 of the Civil Procedure Code, 2074 (2017). On 24 November 2024 (9 Mangsir 2081 BS), a Division Bench referred the case to a Full Bench under Rule 23(c) of the Supreme Court Rules, 2074 (2017), because it raised complex legal questions.

Issues

The Court identified four questions for determination:

Contract: whether a contract was formed between the University and the Student.
Jurisdiction: which country’s courts have jurisdiction, and whether Nepali courts can hear the dispute.
Governing law: if Nepali courts have jurisdiction, which law they must apply.
Limitation and breach: whether the claim was filed within limitation, whether the Student breached the contract, and whether the High Court Decision was correct.

Submissions of the Parties

Counsel for the Student argued that the contract was a standard-form, take-it-or-leave-it contract and that the University’s website terms were only an invitation to offer. Because the Credit Agreement stated that it was regulated by the CCA, and Section 141 of the CCA gives the County Court in England and Wales jurisdiction, Nepali courts could not hear the claim or enforce the contract under Nepali law. The lower courts cited Chapter 29 of the Muluki Ain, Court Management, without explaining how it applied or which law they applied. Alternatively, limitation began when the first instalment was missed on 1 March 2013 (18 Falgun 2069 BS), or at latest when the instalment period ended on 1 September 2013, so the claim was filed late.

Counsel for the University argued that it claimed unpaid fees under the offer letter and that the Credit Agreement only fixed how they would be paid. The Student had admitted the debt in writing and lives in Nepal, so the Muluki Ain gave the Lalitpur District Court jurisdiction. The claim was filed within two years of the Student’s refusal to pay.

Analysis

Was There a Contract at All?

The Student’s first line of defence was that no binding contract existed, because the University’s terms sat on its website and he had never negotiated them. The Court began with a basic question: how is a contract formed when an institution advertises publicly? It held that the University’s website notice was only an invitation to offer, relying on Partridge v. Crittenden [1968] 2 All ER 421. The Student’s application was therefore the offer, and the University’s admission of him on the published terms was the acceptance. The Court noted that Clark v. University of Lincolnshire and Humberside [2000] 1 WLR 1988 and Moran v. University College Salford (No 2) [1994] ELR 187 also treat the relationship between a university and its student as contractual.

The Student had also argued that the Credit Agreement stood apart from his admission. The Court disagreed. The Credit Agreement only set out how the unpaid fees would be paid in instalments, so it was part and parcel of the same agreement and could not be read in isolation. The Court also noted that the Student had himself accepted before the High Court that the contract was in standard form.

Can a Nepali Court Hear a Case Under a UK-Regulated Agreement?

The central question was whether the words “regulated by the Consumer Credit Act 1974” took the dispute out of Nepal. The Court first looked at its own jurisdiction rules. Chapter 29 of the Muluki Ain, Court Management, lets a claimant sue where the defendant lives, and has a separate rule for transactions abroad. The Court refused to read the rule on transactions abroad so literally that it excluded every case with a foreign element, because that would remove private international law from Nepal’s courts altogether. Section 714(1) of the Civil Code, 2074 (2017) points the same way. Where Nepali law is silent on a matter involving a foreign element, accepted principles of private international law apply.

The Court then separated two questions that the Student had run together: which law regulates a contract, and which court hears disputes about it. It relied on its Full Bench decision in Hanil Engineering & Construction Co. v. Devendra Pradhan (N.K.P. 2075, Issue 11, Decision No. 10138), which treats a dispute-resolution clause as separable from the rest of the contract. It also relied on Ash v. Lloyd’s, where an Ontario court held that choice of law “is distinct from jurisdiction”, and on The Eleftheria [1969] 1 Lloyd’s Rep 237. Here the Credit Agreement had no forum clause at all. Its warning that the creditor could not enforce “without a court order” protected the borrower. It did not choose a court.

Does Section 141 of the CCA Keep the Case in England?

The Student’s strongest point was that Section 141 of the CCA gives the County Court in England and Wales jurisdiction over such agreements. The Court answered it with the tests of connecting factors and forum non conveniens. Following Spiliada Maritime Corp v. Cansulex Ltd, the burden is on the party saying another forum is clearly more appropriate. Following A.B.C. Laminart v. A.P. Agencies (1989) 2 SCC 163, another court’s jurisdiction is excluded only if the contract does so clearly, unambiguously and explicitly. Neither test helped the Student. He lives in Nepal, so service of summons, the collection of evidence and the enforcement of any judgment all pointed to Nepal.

The Court also read Section 141 for what it is. It decides which UK court hears a case within the United Kingdom. It is not an exclusive jurisdiction rule in private international law, and under the principle of sovereign equality a foreign statute cannot bind Nepali courts. The Court held that Nepal was the natural forum for the dispute.

What Happens When a Party Does Not Prove the Foreign Statute?

With jurisdiction settled, the Court turned to the law it should apply. The Student said the CCA governed. The Court answered that foreign law is not treated like Nepali law. Under Section 23(1) of the Evidence Act, 2031 (1974), it is a question of fact. A party relying on it must prove it, for example by expert opinion, or by a certified copy published by the foreign government, which raises a presumption of correct publication under Section 6. The Court cited Hari Shanker Jain v. Sonia Gandhi 2001 (8) SCC 233 for the same approach.

The Student produced no such proof of the CCA. So the Court could not take judicial notice of it, and could not presume that it gave English courts exclusive jurisdiction or displaced Nepali law. Having taken jurisdiction under the Muluki Ain, the Court held it just and appropriate to decide the dispute under Nepali contract law.

Was the Claim Filed in Time?

The last question was limitation. Nepali contract law allows two years to sue. The Student said the clock started when he missed the first instalment. The Court disagreed. Following Shree Ram Sugar Mills Ltd. v. Agrotech Consultancy (N.K.P. 2066, Decision No. 8252) and Gyan Bahadur Pradhan v. Korean Development Corporation (N.K.P. 2044, Issue 2, Decision No. 2988), the cause of action arises when the other party refuses to perform, not at the first default. Here that was the Student’s email of 8 January 2016, which accepted the debt but did not pay it. The claim, filed on 20 February 2017, was within time.

On breach, the Student had acknowledged in writing that GBP 8,487.00 was owed and did not pay. The Court held that this was a breach of contract, and the Student did not rebut the amount.

Orders

The Court:

upheld the District Court Decision requiring the Student to pay the University NPR 11,37,267;
upheld the High Court Decision; and
held that the Student’s appeal claim could not succeed.

What This Means for Universities, Lenders and Other Parties to Cross-Border Contracts

The facts of the Judgment concern a university and a student, but its principles are not limited to education contracts. They apply to any contract with a foreign element, including loans, supply and distribution agreements, franchises, service contracts and online terms accepted by customers in Nepal. The Judgment will be of interest to foreign institutions, lenders, businesses, individuals and practitioners. It confirms that referring to a foreign statute in a contract does not, without more, keep a dispute out of Nepali courts.

For foreign institutions, lenders and businesses, a Nepali court will hear a claim against a defendant who lives in Nepal. If a foreign court is intended to be exclusive, the contract should say so clearly and explicitly. A party that wants a foreign statute applied must prove it with a certified copy or expert evidence. Otherwise, the Nepali court will apply Nepali law. Because limitation runs from refusal to perform, creditors should make written demands and keep the replies, which can fix the date of the cause of action.

For students, borrowers and other individuals in Nepal, leaving a foreign contract with money unpaid does not put the debt beyond Nepali courts, and a written acknowledgment of the debt will weigh heavily against them. Advice from a law firm in Nepal is essential before deciding where to sue or how to defend.

For related analysis, see our earlier articles, Enforcement of Foreign Arbitral Awards in Nepal: A Jurisdictional Guide (2026) and Limitations Can Be Extended in an Emergency: SC Dish Home Case 2026. For cross-border contract disputes, see our Litigation and Arbitration practice.

Frequently Asked Questions

Can a Nepali court hear a dispute under a contract that refers to a foreign law?

Yes, in some cases. The Court held that governing law and forum are separate questions, and that Nepali courts have jurisdiction where the defendant lives in Nepal and the connecting factors point to Nepal.

Does a foreign statute’s court clause bind Nepali courts?

Not by itself. The Court read Section 141 of the CCA as an internal allocation of cases within the UK, and noted that the contract had no separate forum clause.

Is foreign law a question of law or fact in Nepal?

Fact. It must be proved, unlike Nepali law, of which the Court takes judicial notice.

What happens if foreign law is not proved?

The Court applied Nepali law. In this case, that was Nepali contract law.

When does limitation start for a contract claim?

Under the Court’s reading, from the date the other party refuses to perform, not from the first default. Here, that was the Student’s email of 8 January 2016, and the two-year limitation period had not expired when the claim was filed.

Does the Judgment apply only to universities?

No. The facts involve a university and a student, but the rules on jurisdiction, foreign law and limitation apply to any contract with a foreign element.

How Niti Partners Can Help

Niti Partners, a law firm in Nepal, advises foreign institutions, lenders and individuals on cross-border contracts, jurisdiction, governing law and litigation and arbitration in Nepal. If you would like to understand how the Judgment affects your agreements, a debt claimed by or against you, or a pending or threatened dispute, please contact us. Our team will be glad to assess your position and advise on next steps.

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