A new contract cannot be entered into until the case is resolved. Construction entrepreneurs often go to court immediately after the contract is terminated, and when they receive an interim order from there, the construction work of the project is often delayed for years.
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The Ministry of Law, Justice and Parliamentary Affairs has started homework for the formation of a separate 'Infrastructure Court'. The ministry has started a study to solve the problems that arise when cases are not resolved in time and development work cannot gain momentum.
Minister for Law, Justice and Parliamentary Affairs Sobita Gautam has formed a task force on Chaitra 25 to resolve the problems related to development projects and study whether an 'Infrastructure Court' is necessary.
The projects are not completed due to court cases and the time it takes to resolve the cases after they are filed has been affecting the development work. The project has been terminating the contract as a last resort after the construction entrepreneurs have been repeatedly asked to work and they have not done so. However, since the construction entrepreneurs file cases in the court immediately after terminating the contract, it has taken time to conclude a new contract.
No new contracts are awarded in such projects until the cases are resolved. There is a compulsion to wait for years for the work to start on projects that are in litigation. Keeping this issue in mind, the ministry has taken up the homework of the infrastructure court.
Development projects are facing problems due to litigation, and we are interested in how to resolve them on a fast track: Sobita Gautam, Minister of Law, Justice and Parliamentary Affairs A task force has been formed under the coordination of Parashwar Dhungana, Secretary of the Ministry of Law, Justice and Parliamentary Affairs, and officials from the concerned ministries. Minister Gautam said that the task force will submit a study report within 15 days and will come up with suggestions on whether an infrastructure court is needed or not.
‘Development projects are facing problems due to litigation, and we are interested in how to resolve the litigation on a fast track,’ she said. ‘Therefore, let us conduct a study within 15 days to think about whether an infrastructure court is needed in Nepal.’ After the study report came, a study task force was formed to start work as per the suggestions. The Ministry of Development and its subordinate bodies have welcomed this decision of the ministry. Director General of the Department of Urban Development and Building Construction, Rabindra Bohara, said that the infrastructure court is absolutely necessary in the current situation.
‘Some construction entrepreneurs do not work as per the agreement. Despite repeated warnings, they do not make progress in the work,’ Bohara said. ‘In such a situation, the contract is terminated due to their own mistakes, the same entrepreneurs do not work for years and instead, it takes time to file a case in court and get a new contract.’ He said that most of the projects have been affected due to litigation. ‘The infrastructure court is absolutely necessary to speed up the development and construction work,’ he said. ‘If a decision is made quickly, no matter who is in favor, we would not have to be stuck in the same project for years.’ The department has stated that the problem is caused by construction entrepreneurs who take the money and leave the project unfinished for years without doing anything. When such contracts are broken, there is a tendency to file a case in court and prolong the work. Construction entrepreneurs who do not work are using the case as a tool. At such a time, he said, he expects the infrastructure court to end this trend. Bohara suggested that an environment should be created where problems and cases that could not be resolved by the Nepal Arbitration Council (NEPCA) could be resolved by the infrastructure court.
Joint Secretary and Spokesperson of the Ministry of Physical Infrastructure and Transport Ramhari Pokharel said that it would be better if a separate bench were appointed in the current court. ‘It is necessary to form a separate bench in the court to hear infrastructure sector cases,’ he said, ‘but it is not necessary to have an infrastructure court.’
He said that with a separate bench, construction sector cases will be given priority and heard quickly, making it easier to move forward with the project work accordingly. ‘Most construction-related cases are filed in the Patan High Court and the Supreme Court. If a separate bench could be arranged there, such cases would have been resolved faster,’ he said.
A new contract cannot be entered into until the case is resolved. Construction entrepreneurs often approach the court as soon as the contract is terminated. Construction work on projects has been stalled for years when the court issues an interim order.
Mitra Baral, Director General of the Department of Water Resources and Irrigation, said that it is expected that construction work will be easier as the government is making many improvements to the Public Procurement Act. ‘When many construction entrepreneurs go to court after the contract is terminated, it has a direct impact on the projects. In such a situation, if a decision could be made through the 'fast track', it would have a good impact on the infrastructure construction work, the work would have accelerated,' he said, 'If we go to court through the regular process, the construction activity in that project will be stopped until a decision is made on this matter. If a separate infrastructure court is designated for this, the development and construction work will be facilitated, this is absolutely necessary.'
When there is a problem in the contract, the NEPC is approached with a solution. The Public Procurement Review Committee under the Public Procurement Monitoring Office has also been hearing the case in the presence of both parties and resolving the problem. But recently, instead of these two bodies, cases have been filed in the Patan High Court and the Supreme Court, where cases take a long time to be resolved.
Director General Baral said that cases are not resolved until they reach the Supreme Court. ‘When a separate hearing is held in the context of development and construction and a decision is made on the fast track, the project is implemented on time,’ he said. ‘Despite being a national pride project, it took four months for the Supreme Court to make the decision on the Sunkoshi Dam.’ In the meantime, the construction work of the dam for the project came to a standstill. Only after the court’s decision was made did the way open for a new contract.
When there is a problem in any contract, a solution should be sought through NEPCA first, the dispute should be resolved from there, and only if that fails, should the case be referred to court, said Nicholas Pandey, president of the Federation of Nepal Construction Entrepreneurs. ‘There is a mediator in NEPCA,’ he said. ‘It is better to accept his decision and go to court.’
He said that the concept of the infrastructure court, which is being proposed to be brought through the Ministry of Law, is welcome. ‘It would be very good to have a judge in the court who understands the construction sector and has read the procurement act.’ The case will also be resolved quickly,' he said, 'After the infrastructure court is established, all cases should be resolved quickly from there. There should be no environment where we have to go to another court again.'
Former Secretary Kishor Thapa says that there is a tendency for contracts to not be worked out as per the agreement. 'Sometimes the government side violates the rules, sometimes the construction business makes mistakes,' he said, 'To resolve problems in such projects, you can go to NEPCA as provided by the Public Procurement Act. The mediators there also try to resolve it.' He says that the project is currently being delayed due to litigation. He says that it would be better if it is resolved quickly.
The task force formed under the coordination of the Secretary of the Ministry of Law has representatives from the Supreme Court and various ministries. The decision states that at least a representative at the level of city registrar, a representative at the level of joint secretary of the Supreme Court, a joint secretary of the Ministry of Physical Infrastructure and Transport, a joint secretary of the Ministry of Urban Development, a joint secretary of the Ministry of Energy, Water Resources and Irrigation, a representative at the level of joint attorney of the Public Procurement Monitoring Office, a representative at the level of joint secretary of the Office of the Attorney General, and a member of the Office of the Investment Board will be members.
