Act No. 2 of 2068
Date of Authentication and Publication: 2068.1.26 (9 May 2011)
“An Act enacted to make provisions regarding the procedures and framework for conducting mediation.”
Preamble: “Whereas, it is expedient to provide legal provisions for settling disputes through mediation in a speedy, simple, and cost-effective manner, enhancing public access to justice and ensuring the interest and convenience of the general public; Now, therefore, this Act is enacted by the Constituent Assembly pursuant to Sub-article (1) of Article 83 of the Interim Constitution of Nepal.” Medha Law and Partners Is a leading law firm in Nepal.
- Short title and Commencement: (1) This Act shall be called the “Mediation Act, 2068.”
(2) It shall come into force on the date and in the area specified by the Government of Nepal through a notification in the Nepal Gazette. Mediation Act, 2068 (2011) | Medha Law and Partners. - Definition : Unless the subject or context otherwise requires, in this Act;
(a) “Quasi-judicial body” means any other body other than a court authorized to try and dispose of a case.
(b) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.
(c) “Board/Council” means the Mediation Board/Council constituted pursuant to section 26. (d) “Party” means party of a dispute and this term also includes plaintiff and defendant of a case.
(e) “Certificate” means the certificate issued pursuant to Sub-section (1) of section 21 to act as a mediator.
(f) “Case” means a dispute which is sub-judice in an adjudicating body.
(g) “Adjudicating body” means a Court and this term also includes a quasi-judicial body.
(h) “Mediation” means a process to be followed to settle a dispute or case with the assistance of a mediator.
(I) “Mediator” means a mediator appointed pursuant to this Act who facilitates for negotiation between the mediation parties and motivates them in arriving at a voluntary agreement.
(j) “Local body” means Village Development Committee or Municipality.
Chapter -2
Settlement of Dispute through Mediation
- Dispute May Be Settled Through Mediation:
(1) If an agreement provides for mediation, any dispute arising under it shall be settled as per the procedure stated in the agreement.
(2) Notwithstanding Sub-section (1), if parties wish to resolve a dispute—whether sub judice or not filed in any adjudicating body—and such dispute is legally compoundable, it may be settled through mediation under this Act.
(3) For a sub judice case, the parties may jointly apply to the concerned adjudicating body for mediation. Upon receiving such an application, the adjudicating body shall order mediation, regardless of the case’s stage.
(4) If the adjudicating body finds a sub judice case suitable for mediation and the parties agree, it may order mediation.
(5) However, if a case includes an issue that cannot be mediated along with one that can, the adjudicating body shall not order mediation for that case.
- Appointment of Mediator:
(1) If the agreement specifies how to appoint a mediator, that procedure shall be followed; otherwise, the mediator shall be appointed under this Act.
(2) Mediators shall be appointed with mutual consent of the parties. - Number of Mediators:
(1) If the agreement mentions the number of mediators, that shall apply. If not, one or three mediators may be appointed by mutual consent.
(2) If one mediator is agreed upon, both parties shall appoint that person. If three, each party appoints one, and the third is appointed jointly or by the two mediators.
(3) Among three mediators, the third will act as the coordinator. - Assistance in Appointing Mediator:
(1) If a mediation service agency has its own rules for appointing mediators, the parties may follow those.
(2) Parties or the court may request such an agency to recommend or appoint a mediator.
(3) Upon request, the agency may recommend or appoint a mediator considering the nature of the dispute, mediator’s qualifications, impartiality, and—if international—nationality.
(4) Parties may also seek assistance from the local body to appoint a mediator.
(5) The local body shall maintain a roster of qualified mediators and, in consultation with the parties, assist in appointing a suitable mediator. - Mediator to be Appointed by Adjudicating Body:
(1) If mediation is ordered under Section 3(4), or if parties fail to appoint a mediator under Section 5, the adjudicating body shall direct the parties to submit a mediator’s name within a specified time.
(2) Upon submission of a mutually agreed name, the adjudicating body shall appoint that person as mediator.
(3) If the parties fail to submit a name, the adjudicating body shall appoint a qualified mediator with party consent. - Appointment of Mediator in Special Circumstances:
(1) If a mediator declines, is unable to serve, resigns, dies, or the position becomes vacant, a new mediator shall be appointed within the agreed time using the same prior procedure.
(2) If appointment cannot be made as per Sub-section (1), Section 7 shall apply. - Order to Appoint Mediator:
(1) When mediation is ordered under Section 3(3) or 3(4), the adjudicating body shall issue an order to appoint a mediator.
(2) The appointed mediator must be a person certified under Section 21(1). - Notice of Refusal to Act as Mediator:
If a person appointed as a mediator does not wish to serve, they must notify the concerned adjudicating body in writing within seven days of receiving the appointment notice. - Mediator’s Obligation to Notify:
(1) If a mediator cannot act independently or impartially due to the nature of the dispute or any circumstance causing reasonable doubt, they must promptly inform the parties and, if applicable, the adjudicating body in writing.
(2) A copy of such notice shall be filed in the dispute record. - Duties and Conduct of the Mediator:
A mediator shall:
(a) Act impartially;
(b) Avoid favoritism, bias, or any appearance thereof;
(c) Not use fear, coercion, or misleading tactics;
(d) Avoid financial dealings with parties during mediation;
(e) Refrain from acts contrary to this Act or its Rules;
(f) Avoid conflicts of interest;
(g) Abide by the prescribed code of conduct during mediation. - Mediators May Be Removed:
(1) If a mediator is later found to be unqualified under Section 22, the parties, appointing agency, or adjudicating body shall promptly remove the mediator.
(2) A mediator may be removed by the adjudicating body at any time upon a party’s complaint or on its own knowledge if the mediator:
(a) Violates the duties under Section 12,
(b) Acts unfairly or fraudulently against the dispute or a party,
(c) Repeatedly makes mistakes or irregularities during mediation,
(d) Unreasonably delays or avoids mediation proceedings, or
(e) Breaches confidentiality without consent, harming a party’s interest.
Chapter-3
Procedure Relating to Mediation
- Commencement of Mediation Proceedings:
(1) Mediation is deemed to commence when:
- One party to a non-filed dispute notifies another,
- The parties jointly apply to the adjudicating body under Section 3(3), or
- The adjudicating body orders mediation under Section 3(4).
Provided: Community-based mediation begins upon request by the concerned party to the community.
(2) Once commenced, a party must submit the dispute to the mediator.
(3) Upon commencement, no adjudicating body shall interfere until mediation is concluded, unless otherwise stated in this Act.
- Procedure for Settlement of Dispute:
(1) Parties may determine their own procedure for mediation.
(2) If agreed, mediation may follow the rules of a mediation service agency.
(3) Where mediation is court-ordered, it shall follow the procedure prescribed or ordered by the adjudicating body.
(4) If no procedure is specified, the mediator shall determine a suitable process considering the nature of the dispute and parties’ preferences.
(5) The procedure may include:
(a) Submission of claims and replies,
(b) Separate or joint meetings,
(c) Request for information, evidence, or documents,
(d) Sharing of such materials with the other party,
(e) Identifying alternative grounds for resolution.
(6) The Board may issue a model mediation procedure.
- Settlement of a Dispute:
(1) If parties agree to a settlement during mediation, the mediator shall prepare a mediation agreement and have all parties and the mediator sign it.
(2) Each party receives a copy of the agreement.
(3) The dispute is considered settled once the agreement is prepared.
(4) For disputes referred under Section 3(3) or (4), the mediator shall present the agreement and parties before the adjudicating body.
(5) The adjudicating body shall enforce the settlement per prevailing laws.
(6) No fee shall be charged for such mediation.
(7) In cases involving fines or imprisonment by quasi-judicial bodies, the competent court may reduce or remit penalties upon successful mediation. - Termination of Mediation Proceedings:
Mediation proceedings shall terminate if:
(a) The parties do not agree to mediate under Section 15,
(b) Parties fail to appear on a scheduled date,
(c) Proceedings cannot proceed due to absence of a party,
(d) A mediation agreement is reached and signed. - Report to be Submitted:
(1) The mediator appointed under Section 3(3) or (4) must submit a report to the adjudicating body within seven days in cases under Section 17(a), (b), or (c).
(2) Upon receiving the report, the adjudicating body shall resume and decide the case per law.
(3) If the mediation document is not submitted within ten days after the mediation deadline, or no report is submitted, the adjudicating body shall proceed to hear and decide the case. - Restriction on Further Involvement:
A mediator who provided mediation services in a dispute under this Act is barred from acting as a lawyer, arbitrator, or judge in the same case.
Chapter-4
Provision Related to Certificate of Mediator and Regulation thereof
- Application for Mediator Certificate:
(1) A person wishing to act as a mediator under Section 3(4) or 9(2) must apply to the Board in the prescribed format.
(2) The applicant must submit a copy of their citizenship certificate and documents proving they meet the eligibility requirements. - Issuance and Validity of Certificate:
(1) Upon verifying the application, if satisfied, the Board shall issue a mediation certificate in the prescribed format.
(2) The certificate is valid for three years and may be renewed as prescribed.
(3) The Board may cancel the certificate if the mediator is later found unqualified under Section 22 or commits fraud while mediating.
(4) Certificates issued under prior laws are considered valid under this Act. - Qualifications for Mediator:
(1) To be eligible as a mediator, one must:
(a) Be a Nepali citizen,
(b) Be at least 25 years old,
(c) Hold at least a Bachelor’s degree from a recognized institution,
(d) Have completed prescribed mediation training,
(e) Be of sound mind,
(f) Not be convicted of a crime involving moral turpitude,
(g) Not be declared bankrupt,
(h) Not have been removed from the mediator roster for misconduct.
(2) Despite (b), (c), and (d), parties may appoint a literate person aged 25+ as a mediator if they mutually agree, even without training.
(3) Despite (a), a foreign citizen may be appointed as a mediator in disputes involving a foreign person or contract.
- Approval for Mediation Service Agencies:
(1) A corporate body registered under prevailing law to provide mediation services must apply to the Board in the prescribed format, including:
- Name and registration number
- Names of officials
- Copy of its mediation procedures or rules
- Location where it intends to provide services
(2) Upon verification, if satisfied with the submitted procedures and details, the Board shall grant approval to operate as a mediation service provider upon payment of a prescribed fee.
- Roster of Mediators:
(1) Approved agencies must maintain and publicize a roster of qualified mediators.
(2) The roster must include each mediator’s qualifications, experience, and contact details.
(3) Parties may select mediators from this roster, in accordance with the agency’s rules or procedures. - Approval of Mediation Rules:
(1) A corporate body providing mediation services may draft its own mediation procedures or rules.
(2) Such rules come into effect only after approval by the Council.
Chapter-5
Constitution, Functions, Duties and Powers of the Council
- Constitution of the Mediation Board:
A Mediation Board shall be established to oversee the reform, regulation, and control of mediation procedures. The Board shall consist of the following members:
- Chairperson: A sitting Supreme Court Judge designated by the Chief Justice upon recommendation of the Judicial Council.
- Members:
(a) Secretary, Ministry of Law and Justice
(b) Secretary, Ministry of Local Development
(c) Deputy Attorney General, Office of the Attorney General
(d) General Secretary, Nepal Bar Association
(e) One representative from an industry/commerce-related organization designated by the Board
(f) Two women mediators or representatives from mediation-related agencies, designated by the Board
- Functions, Duties, and Powers of the Board:
The Board shall have the authority to:
(a) Conduct or facilitate programs promoting mediation for dispute resolution.
(b) Advise the Government on simplifying mediation procedures and legal reforms for wider use.
(c) Approve mediator training curricula and designate training agencies.
(d) Monitor and evaluate mediation service providers and training quality.
(e) Organize training and interaction programs to enhance mediator expertise.
(f) Develop frameworks for local-level community mediation and recommend implementation to the Government.
(g) Monitor mediators’ conduct and activities.
(h) Investigate mediator compliance with the code of conduct and take action on violations.
(i) Perform other mediation-related functions as necessary. - Board Meetings:
- Meetings are held as scheduled by the Chairperson.
- Quorum requires over 50% of members.
- Chairperson presides; in their absence, members select a presiding member.
- Decisions by majority; Chairperson casts deciding vote if tied.
- Member-secretary authenticates decisions.
- Other meeting procedures set by the Board.
- Mediation Monitoring Committee:
- A local-level committee shall be formed to monitor mediation activities.
- Mediation Fund:
- A fund under the Board is established to support mediation activities.
- Sources include Government funds, foreign contributions (with Government approval), fees from approved agencies, and other sources.
- Fund deposited in a commercial bank account managed by the Board’s secretariat chief and a designated employee.
- Use of Fund:
- Used to implement Board decisions, operate the secretariat, reform mediation procedures, and conduct training and seminars.
- Accounts and Audit:
- Accounts maintained as per Government format.
- Audited according to prevailing laws.
- Final audit conducted by the Auditor General.
Chapter- 6
Provisions Relating to community mediation
- Community-Based Dispute Settlement:
Disputes eligible for mediation may also be settled through community-based mediation. Communities may form a panel of mediators before or after a dispute arises, including respected local persons, representatives of community organizations, social workers, and educators. Adequate representation of women must be ensured on the panel. - Community Mediation:
Mediators shall assist parties in resolving disputes by encouraging consensus and mutually acceptable agreements, avoiding a win-lose mindset. Local NGOs may provide technical support to mediators. Community members shall establish procedures for mediation, and settlements may be recorded in local bodies. Further rules will be prescribed as needed. - Training and Technical Support:
District Development Committees, Village Development Committees, and Municipalities may provide technical support for community mediators. The Government may engage NGOs or community organizations to develop mediator expertise and provide necessary training.
Chapter -7
Miscellaneous
- Duty of the Parties:
Parties must attend the mediation or adjudicating body at the specified date, time, and place and participate in the mediation process. - Confidentiality:
Unless otherwise agreed by the parties or provided by law, all mediation proceedings shall remain confidential. - Inadmissibility of Evidence:
Statements made by a party during mediation shall not be admissible as evidence in court proceedings involving that party. - Binding Nature of Mediation:
A dispute settled through mediation under this Act shall be binding on all parties involved. - Execution of Mediation:
(1) Notwithstanding prevailing laws, mediation settled under Section 3(3) or (4) must be executed within 35 days from the date of settlement.
(2) If not executed within the specified period, the affected party may apply to the concerned body for enforcement.
(3) Upon receiving such application, the concerned body shall enforce the mediation as per prevailing law. - Role of Facilitator:
(1) A mediator shall assist parties independently and impartially to resolve disputes amicably.
(2) The mediator shall act with integrity, objectivity, fairness, and justice, considering parties’ rights, obligations, and relevant commercial or community practices.
(3) The mediator shall not act as a judge, arbitrator, or legal advisor, but solely as a facilitator. - Confidentiality by Mediator:
A mediator shall not disclose any party’s information or facts learned during mediation that could harm a party’s interest. Provided that, this Section shall not create any bar to disclose anything known to him/her in a criminal offence before a competent court. - Fee:
(1) A mediator may accept fees agreed upon by both parties, not exceeding the prescribed amount.
(2) In absence of such agreement, the mediator shall receive the fee as prescribed by the Board. - Immunity of Mediator:
No legal action shall be taken against a mediator for actions performed in good faith while carrying out mediation duties. - Delegation of Powers:
The Board may delegate its powers to any body or authority as necessary. - Referral to Local Body:
(1) This Act does not prevent mediation under the Local Self Governance Act, 2055. Courts or quasi-judicial bodies may refer pending cases to local bodies for mediation with consent of parties and the local body.
(2) The local body may mediate such cases using appropriate procedures. - Code of Conduct:
The Board may formulate and enforce a code of conduct for mediators. - Rulemaking Power:
The Government of Nepal may frame necessary Rules to implement the provisions of this Act.
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