Weak arbitration defence costs government billions
Summary
Government agencies in Nepal are facing substantial arbitration claims due to weak legal defenses, resulting in billions in payouts to contractors. Cases reveal lack of counterclaims and inconsistent tribunal decisions, exposing systemic oversight issues.
Key Points
- Nepal's government agencies have paid at least Rs 5.5 billion in arbitration awards over the past five years due to weak defense strategies.
- Construction companies claimed Rs 14 billion in disputes with the government, with 84% of cases resulting in compensation to contractors.
- Government rarely files counterclaims against contractors, with only 27 of 160 disputes involving counterclaims.
- Arbitration decisions show inconsistency and questionable appointments of arbitrators, prompting calls for regulatory reforms.
