Mediation Act 2068: How to Resolve Disputes Through Formal Mediation

March 25, 2025

Mudda Kendra Team

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Summary

Complete guide to Nepal's Mediation Act 2068 enacted on Paush 29, 2068 (January 10, 2012 AD). Covers mediator qualifications, certification process, court-referred mediation, community mediation, settlement agreements, and confidentiality provisions.

1. Introduction to Mediation Act 2068

The Mediation Act 2068 (2011 AD) represents a landmark development in Nepal's legal system. Enacted on Paush 29, 2068 (10 January 2012 AD), this Act established a comprehensive legal framework for formal dispute resolution through mediation.

Mediation under this Act is defined as a structured, voluntary process in which a neutral third party (the mediator) facilitates negotiation between disputing parties to help them reach mutually acceptable solutions to their disputes.

Why This Act Was Needed

Before 2068, Nepal's justice system relied primarily on traditional court litigation. This created several critical problems:

Court Backlog: The number of cases far exceeded courts' capacity. Cases routinely took years to resolve.

Access to Justice Gap: Cost and delay of litigation prevented most citizens from accessing formal justice.

Social Disruption: Prolonged litigation damaged business relationships, family bonds, and community harmony.

Inadequate Resources: Nepal lacked sufficient judges and court infrastructure to handle dispute volume.

International Isolation: Nepal needed ADR mechanisms recognized internationally (particularly for commercial disputes).

The Mediation Act 2068 responded to these challenges by creating a formal, legal mediation framework. This legitimized mediation as a primary dispute resolution method, not just an informal alternative.

Significance Today

More than a decade after enactment, the Mediation Act 2068 has become fundamental to Nepal's justice system:

Mandatory in Civil Cases: Civil Procedure Code 2074 requires all civil cases undergo 30-day mandatory mediation before trial.

Community-Level Implementation: Over 1,400 community mediation committees operate across Nepal.

Gender Inclusion: Mediation provides access to justice for women and marginalized groups.

Cost-Effective: Mediation is significantly cheaper than litigation (often free or minimal cost).

High Settlement Rates: Community mediation achieves 80-90% settlement rate; court-annexed mediation achieves 60-75%.

2. Historical Development and Legal Context

Pre-2068 Mediation in Nepal

Before formal legislation, mediation existed informally:

Traditional Dispute Resolution: Communities historically used elder-based dispute resolution where respected community members facilitated settlement.

Panchayat System: In rural areas, local panchayats (councils) resolved disputes informally.

Religious Mediation: Religious leaders sometimes mediated disputes in their communities.

Business-Based Negotiation: Merchants negotiated settlements in commercial disputes.

These informal methods were effective but lacked legal recognition, enforceability, and standards.

Path to Formal Mediation Act

Supreme Court Adoption (2003): The Supreme Court's Fourth Amendment to District Court Rules 2052 (1995 AD) adopted court-referred mediation. This was first formal judicial recognition of mediation.

District Court Mediation (2003-2011): District courts appointed trained mediators to facilitate settlement in pending cases. This pilot phase proved mediation's effectiveness.

Mediation Act 2068 Development: Based on successful pilot experience, parliament enacted comprehensive Mediation Act in 2068 (2011 AD).

Commencement: Act came into force on Poush 29, 2068 (10 January 2012 AD).

Legal Framework Integration

The Mediation Act 2068 works within broader legal framework:

Constitution of Nepal 2072: Articles 33, 40, and 47 recognize ADR and access to justice as constitutional rights.

Civil Procedure Code 2074: Sections 193-195 mandate court-referred mediation before trial.

Contract Act 2056: Recognizes mediation and arbitration agreements in contracts.

Arbitration Act 2055: Parallel legislation governing arbitration (different from mediation).

Labor Act 2017: Incorporates conciliation (similar to mediation) for labor disputes.

Local Government Operation Act 2074: Establishes legal basis for community-based mediation.

3. Objectives and Principles of the Mediation Act

Stated Objectives

Section 2 of Mediation Act 2068 lists the Act's objectives:

Primary Objective: Provide expedited, simple, and cost-effective dispute settlement through mediation.

Secondary Objectives:

Reduce burden on court system
Enhance access to justice for all citizens
Preserve relationships between parties
Promote community participation in justice
Simplify dispute resolution procedures
Make justice affordable to ordinary people

Core Principles

The Act embodies several core principles:

Voluntariness:

Parties voluntarily choose to mediate
Parties can withdraw from mediation at any time
Mediator cannot force agreement
Parties remain in control of process

Neutrality:

Mediator must remain impartial
Cannot show favoritism or bias
Cannot have conflicts of interest
Must maintain integrity throughout

Confidentiality:

Mediation discussions are confidential
Cannot be disclosed in court proceedings
Protects candid communication
Encourages honest discussion

Party Control:

Parties decide outcome
Mediator facilitates but doesn't decide
Parties design solution
Agreement reflects mutual satisfaction

Relationship Preservation:

Process maintains relationships
Focuses on interests, not positions
Creative solutions are encouraged
Continuing relationships supported

4. Scope of Application

Disputes Covered by Mediation Act

Section 3 of Mediation Act 2068 defines the scope:

Disputes Arising from Agreements:

"If any agreement provides for the settlement of disputes through mediation, the disputes arising from that agreement shall be settled according to the procedure prescribed in the agreement."

This means any dispute covered by mediation clause in contract can be resolved through mediation.

Pending Disputes Not Yet Filed:

Parties can pursue mediation for disputes not yet filed in court. The Act allows mediation of:

Contractual disputes
Commercial disputes
Debt disputes
Property disputes
Family matters (certain types)
Neighborhood disputes
Employment disputes

Disputes Pending in Court:

Per Section 3, Subsection (4), disputes already filed in court can be mediated if the court orders mediation or both parties agree.

Exceptions - Disputes NOT Eligible for Mediation:

Certain disputes cannot be mediated per Section 3, Subsection (3):

Criminal Cases: Murder, rape, theft, and other criminal matters cannot be mediated. They require court prosecution.
Public Interest Cases: Disputes involving public interest cannot be purely resolved through mediation (though may involve settlement component).
Constitutional Matters: Constitutional questions and human rights violations cannot be exclusively resolved through mediation.
Maintenance of Public Order: Disputes potentially affecting public order cannot be purely mediated.
Government Authority Matters: Disputes involving government's sovereign functions cannot be mediated.

Family Matters Complexity:

Some family matters can be mediated, others cannot:

Mediation-Eligible Family Matters:

Divorce-related property division
Maintenance and alimony
Child custody (mutual agreement)
Asset division (mutual agreement)
Family property partition

Non-Mediation Family Matters:

Divorce itself (must be court-ordered)
Adoption (must be court-approved)
Guardianship (must be court-approved)

Mediation Agreement vs. Court-Ordered Mediation

The Act distinguishes two situations:

Mediation by Agreement:

Parties voluntarily agree to mediate
Must have written agreement (mediation clause or separate agreement)
Procedure follows agreement terms
If no procedure specified, Act's procedures apply

Court-Ordered Mediation:

Court refers dispute to mediation
Mandatory (per Civil Procedure Code 2074)
Court appoints mediator
Follows court-prescribed procedure

5. Dispute Mediation Under Agreements

Mediation Agreements

Parties can agree to mediate disputes:

Mediation Clause in Contract:

When parties sign a contract, they can include mediation clause:

"Any dispute arising out of or relating to this agreement 
shall be settled by mediation. A mediator shall be appointed 
by mutual agreement of the parties. The mediation shall be 
conducted according to the Mediation Act 2068. The 
mediation shall be completed within 30 days unless extended 
by agreement. If mediation fails, either party may pursue 
other remedies."

Separate Mediation Agreement:

Parties to existing dispute can execute separate mediation agreement:

"MEDIATION AGREEMENT

This agreement is entered into on [date] between [Party A] 
and [Party B] to resolve the dispute regarding [subject] 
through mediation.

1. The parties agree to submit their dispute to mediation 
conducted by [mediator name] or appointed mediator.

2. The mediation shall follow the Mediation Act 2068 procedures.

3. The mediation shall be completed within 30 days.

4. Both parties agree to participate in good faith.

5. The parties accept that mediation is confidential.

Signed:
[Party A Signature]
[Party B Signature]"

Procedure Specified in Agreement

When parties specify procedure in agreement, that procedure governs:

What Parties Can Specify:

Mediator selection method
Mediation location
Mediation language (Nepali/English)
Timeline for mediation
Separate vs. joint meetings preference
Confidentiality terms
Cost sharing

Example Detailed Mediation Clause:

"MEDIATION CLAUSE

In case of any dispute arising from this contract:

1. MEDIATOR SELECTION: The parties shall jointly select a 
mediator within 7 days. If no agreement, each party nominates 
one person, and those two select a third mediator.

2. LOCATION: Mediation shall be conducted in Kathmandu.

3. LANGUAGE: Proceedings shall be in Nepali or English as 
agreed.

4. TIMELINE: Mediation shall be completed within 45 days 
unless extended by written agreement.

5. CONFIDENTIALITY: All discussions are confidential and 
inadmissible in any legal proceeding.

6. COSTS: Mediator costs shall be shared equally.

7. IF AGREEMENT: Settlement shall be documented and binding.

8. IF NO AGREEMENT: Either party may pursue arbitration or 
litigation."

How Agreement-Based Mediation Works

Step 1: Dispute Arises

Dispute occurs between parties to mediation agreement.

Step 2: Notice of Mediation

One party sends notice to other party invoking mediation:

"NOTICE OF MEDIATION

To: [Other Party]
Date: [Date]

We have a dispute regarding [subject] under our [contract/
agreement]. Per [Section X of agreement], we invoke mediation 
to resolve this dispute.

We propose [mediator name] or request you propose mediator 
within 7 days.

Please confirm your agreement to mediate and propose a 
mediator within 7 days of this notice.

Regards,
[Party A Name]"

Step 3: Mediator Appointment

Parties appoint mediator per agreement procedures.

Step 4: Mediation Commencement

Mediator schedules mediation session.

Step 5: Mediation Process

Following agreement and Act procedures, mediation proceeds.

Step 6: Settlement or Termination

If settlement reached, documented. If not, mediation terminates.

6. Court-Referred Mediation Process

Court-referred mediation occurs when courts mandate mediation for pending cases.

Legal Basis for Court-Referred Mediation

Civil Procedure Code 2074, Section 193:

"In any civil case pending in a district court, the judge shall, at the first hearing or thereafter, attempt mediation to encourage settlement between the parties."

Civil Procedure Code 2074, Section 194:

"The judge shall order mediation by appointing a mediator from the mediation center or roster maintained by the court. The mediation period shall be thirty days."

Civil Procedure Code 2074, Section 195:

"If settlement is reached through mediation, the mediator shall prepare a compromise document. The court shall give effect to the compromise according to law."

How Court Mediation is Initiated

At First Hearing:

When case is first heard in court:

Judge explains mediation process
Judge asks if parties willing to mediate
Judge addresses any objections
Judge appoints mediator

Mandatory Nature:

Unlike agreement-based mediation (voluntary), court-ordered mediation is mandatory except when:

Case involves criminal elements
Purely legal issues (only law applies, no facts disputed)
Emergency (like injunction)
One party objects strenuously (discretionary with judge)

Mediation Center and Mediator Appointment

District Court Mediation Centers:

Most district courts have mediation centers:

Staff:

Mediation coordinator
Trained mediators (usually 5-15)
Administrative support

Functions:

Maintain roster of mediators
Schedule mediation sessions
Provide facilities
Coordinate with court

Mediator Appointment Process:

Court refers case to mediation center
Mediation coordinator contacts parties
Parties may propose mediator
If no proposal, coordinator appoints from roster
Mediator is notified and accepts assignment

Mediator Neutrality:

Appointed mediator must:

Not have prior relationship with either party
Not have conflict of interest
Sign impartiality declaration
Disclose any potential conflicts

30-Day Mediation Period

Duration:

Mediation period is 30 days from mediator appointment. This means:

Timeline:

Mediator appointed on Day 1
First session scheduled within 1 week typically
Mediation sessions continue through 30-day period
Multiple sessions usually held

Extension of Period:

30-day period can be extended:

By written agreement of both parties
If mediation progressing toward settlement
Judge must approve extension
Extension typically 15-30 additional days

What Happens After 30 Days:

If 30 days elapse:

If settlement reached: compromise document prepared, case settled
If no settlement: mediator reports failure, case proceeds to trial

7. Appointment of Mediators

Mediator Selection Process

Section 4-8 of Mediation Act 2068 detail mediator appointment:

Agreement-Based Mediator Selection

When Specified in Agreement:

If agreement specifies how mediator is appointed, those provisions apply.

Mutual Agreement Method:

If not specified in agreement:

For Single Mediator:

Parties jointly agree on one mediator
Both must consent
Agreed person is appointed

For Three Mediators (if agreement specifies):

Each party appoints one mediator
Those two mediators jointly appoint third mediator
Third mediator acts as presiding mediator
If two cannot agree on third, parties jointly appoint

Court-Appointed Mediator Selection

When Parties Cannot Agree:

If parties fail to agree on mediator within prescribed period:

Section 7 Procedures:

Court issues order requiring parties submit mediator name
Parties have specified period (usually 7 days) to submit name
If both parties submit same name: that person is mediator
If parties submit different names: court appoints from roster

If Parties Submit No Name:

Court appoints mediator from eligible persons without requiring party consent.

Special Circumstances

Section 8 - Mediator Replacement:

If appointed mediator:

Declines to serve
Dies
Becomes incapable
Resigns
Removed for misconduct

A replacement mediator is appointed using same selection process.

Mediator Removal

Grounds for Removal:

Mediator can be removed for:

Bias or conflict of interest shown
Accepting benefits from party (corrupting mediator)
Breach of confidentiality
Deliberate misconduct
Negligence or incompetence
Delays without justification

Process for Removal:

Affected party files petition
Court/mediation center investigates
Mediator given opportunity to respond
Removal decision issued
Replacement mediator appointed

8. Qualifications and Training Requirements for Mediators

Mediator Eligibility Requirements

Section 22 of Mediation Act 2068 specifies mediator qualifications:

Standard Qualifications:

A person is eligible to be a mediator if they:

Nepali Citizenship: Must be Nepali citizen (except for foreign parties' disputes)
Age: Attained minimum 25 years of age
Education: Completed at least Bachelor's Degree from recognized academic institution
Training: Completed mediation training for prescribed period (typically 20-40 hours)
Mental Capacity: Possess sound mind (no significant mental disability)
Criminal Record: Not convicted by court in criminal charge involving moral turpitude (murder, theft, fraud, sexual assault, etc.)
Financial Status: Not adjudged bankrupt
Professional Standing: Not removed from mediator roster due to misconduct

Training Requirements

Mandatory Training:

Per Section 22, mediators must complete mediation training.

Training Content (Typically Includes):

Mediation principles and ethics
Mediation procedures and techniques
Communication skills
Conflict resolution
Active listening
Negotiation strategies
Settlement agreement drafting
Confidentiality and privilege
Mediator impartiality
Handling difficult situations
Managing emotional issues
Gender sensitivity

Approved Training Providers:

Training must be provided by:

Mediation Council-approved agencies
Government institutions
Law schools
Recognized NGOs
International organizations

Training Duration:

Basic Training: Typically 20-40 hours
Advanced Training: 40+ hours (optional)
Refresher Training: Recommended annually (4-8 hours)

Exceptions to Qualifications

Section 22, Subsection (2) provides exceptions:

Self-Selected Mediators:

If parties themselves select a mediator (rather than court-appointed), that person can be mediator even without full qualifications if they:

Are literate (basic reading/writing)
Have attained 25 years age

These persons need not have Bachelor's degree or mediation training.

Purpose: This allows communities to select respected elders or community leaders as mediators even if they lack formal education.

Foreign Mediators:

Section 22, Subsection (3) allows foreign citizens to mediate international or foreign-involved disputes even without Nepali citizenship.

Mediator Registration and Certification

Section 20-21: Mediator Certification

Mediators who complete training must register:

Application Process:

Applicant submits application to Mediation Council Board
Application includes:
- Citizenship certificate copy
- Educational qualification proof
- Training completion certificate
- Character references
- Resume/CV

Board Review:

Board verifies:

Qualifications meet requirements
Training was legitimate
No misconduct history
Applicant is fit to serve

Certification:

If approved:

Mediator receives certificate
Certificate valid for specified period (usually 3 years)
Mediator is registered on national roster
Certificate is renewable

Disqualification:

Board can deny certification or remove mediator from roster if:

Qualifications not met
Fraud or forgery in application
Serious misconduct found

9. Rights and Duties of Mediators

Mediator Duties

Section 11 and 12 of Mediation Act 2068 detail mediator duties:

Duty of Impartiality:

Mediator must:

Treat all parties fairly and equally
Not favor one party over another
Consider all parties' interests equally
Not show bias or prejudice
Avoid appearance of bias

Duty of Impartiality Implementation:

Do not accept gifts or benefits from parties
Maintain professional distance
Listen equally to all parties
Treat all views respectfully
Base suggestions on merits, not party status

Duty Against Favoritism:

Mediator must NOT:

Act with bias toward any party
Conduct mediation with appearance of bias
Show favoritism based on:
- Wealth or poverty
- Social status or class
- Gender or gender identity
- Caste or ethnicity
- Religion or political affiliation
- Relationship to parties

Duty to Avoid Misconduct:

Mediator must NOT:

Conduct mediation through fear or intimidation
Mislead or deceive parties
Induce parties through fraud or corruption
Make threats or threats

Duty to Avoid Conflict of Interest:

Mediator must NOT:

Have financial transactions with parties
Have business relationships with parties
Have personal relationships with parties
Accept business dealings during mediation
Benefit directly from particular outcome

Confidentiality Duty

Section 9 - Breach of Confidentiality:

Mediator must not breach confidentiality without party consent.

What is Confidential:

All discussions in mediation
Position statements
Documents exchanged
Settlement offers made
Mediator's impressions
Mediator's suggestions
Any information learned in mediation

Who Can Know:

Only parties present (and their lawyers, if permitted)
Not the mediator's family
Not other case workers
Not the court (with exceptions)
Not the public

Exceptions to Confidentiality:

When both parties consent to disclosure
Court orders disclosure (rare)
Disclosure necessary to prevent serious harm
To report mediator misconduct

Consequences of Breach:

Mediator breaching confidentiality can be:

Removed from mediator roster
Disciplined by Mediation Council
Liable for damages to parties
Subject to professional sanctions

Mediator Powers and Authority

Section 14 - Mediation Process Powers:

Mediator has authority to:

Set meeting times and locations
Conduct separate meetings with parties
Conduct joint meetings
Ask for documents and evidence
Ask parties clarifying questions
Propose solutions
Suggest compromise positions
Control discussion flow
Terminate mediation if inappropriate

Mediator Limitations:

Mediator does NOT have authority to:

Force agreement on parties
Compel disclosure
Subpoena witnesses
Enforce compliance
Make binding decisions (unless parties agree)
Override party wishes
Punish non-compliance

Mediator's Right to Impartiality

Mediator has right to:

Refuse assignment if conflict of interest
Withdraw if conflict emerges
Terminate mediation if inappropriate
Require all parties treat mediator with respect
Protection from harassment or threats

10. Mediation Procedure and Process Steps

Commencement of Mediation

Section 14 - When Mediation Commences:

Mediation commences in different ways depending on context:

For Non-Pending Disputes:

One party serves notice on other party invoking mediation, OR
Parties jointly submit application to mediation center or court requesting mediation

For Court-Pending Disputes:

Court orders mediation at first hearing or thereafter

For Community Mediation:

Request made to community mediation committee

Community Mediation Commencement:

Per Section 14, Subsection (1) (Proviso): Community-based mediation commences when a request is made to the community by concerned party.

Mediation Opening Session

First Session Agenda:

Mediator Introduction: Mediator introduces self, qualifications, role
Process Explanation: Mediator explains mediation process, timeline, confidentiality
Ground Rules: Mediator establishes ground rules for respectful conduct
Impartiality Confirmation: Mediator confirms independence and impartiality
Confidentiality Explanation: Mediator explains what is confidential
Withdrawal Right: Mediator explains parties can withdraw
Consent Check: Mediator confirms both parties willing to proceed
Scheduling: Mediator schedules subsequent sessions

Section 14 Procedures

Section 14, Subsection (5) specifies the mediation procedure must include:

Claim and Reply Presentation:

"To produce own claim and reply by the parties before the mediator."

Parties present their position and claim
Other party presents reply/response
Mediator listens and takes notes

Separate or Joint Meetings:

"To hold separate or joint meeting with the parties."

Mediator may meet with parties together
Mediator may meet with each party alone
Mediator decides format based on situation

Information and Evidence Seeking:

"To seek any information or evidence or document from the parties."

Mediator can request documents
Mediator can ask clarifying questions
Parties must provide requested information

Information Access:

"To provide access to the relevant information to the parties."

Information is shared between parties
Parties can see evidence against them
Promotes transparency

Alternative Grounds for Settlement:

"To seek alternative grounds for mediation from parties for resolving the dispute."

Mediator suggests alternative approaches
Parties explore creative solutions
Mediator helps identify common ground

Detailed Process Flow

Session 1 - Opening Session (1-2 hours):

Mediator introduction and process explanation
Ground rules establishment
Party confirmation to proceed

Session 2 - Claim Presentation (1-2 hours):

Party A presents claim in detail
Party B listens
Mediator asks clarifying questions
Party B presents response in detail
Party A listens

Session 3 - Information Exchange (1-2 hours):

Parties exchange documents and evidence
Mediator reviews materials
Clarifying questions asked
Information organized

Sessions 4-5 - Private Caucuses (2-3 hours each):

Mediator meets with Party A alone
Party A can speak candidly
Mediator understands real position
Mediator meets with Party B alone
Same process

Sessions 6-7 - Negotiation (1-3 hours each):

Mediator proposes possible settlement positions
Parties respond to proposals
Parties gradually move toward agreement
Mediator refines proposals based on feedback

Final Session - Settlement (1 hour):

Parties reach agreement
Settlement terms are documented
All parties and mediator sign

11. Separate and Joint Meetings

Joint Meetings

Purpose: Facilitate direct communication and understanding between parties

When Used:

Parties willing to meet
Communication not too hostile
Need to clarify misunderstandings
Building foundation for settlement
Finalizing agreement

Mediator's Role in Joint Sessions:

Manage communication flow
Prevent domination by one party
Encourage both to speak
Control emotional escalation
Summarize points of agreement

Structure:

Mediator may invite opening statements
Mediator asks questions of both
Mediator summarizes positions
Parties respond to each other (through mediator if needed)

Separate Meetings (Caucuses)

Purpose: Allow candid discussion without other party present

When Used:

Parties unable to communicate directly
One party uncomfortable in joint session
Need to reality-test positions
Explore true interests and constraints
De-escalate emotions

Mediator's Role in Private Sessions:

Listen without judgment
Ask probing questions
Understand real concerns
Identify flexibility and constraints
Test if settlement is possible
Shuttle information between parties

What's Said in Caucus:

Confidential (if parties don't want disclosed)
Mediator doesn't repeat to other party without permission
Parties can tell mediator what can be shared
Example: "You can tell him I'm willing to negotiate, but don't tell him our initial demand"

Shuttle Diplomacy:

Mediator uses caucuses for shuttle diplomacy:

Meet with Party A - hear their view
Party A says: "Tell them we might accept half if they pay by month end"
Mediator meets Party B - passes message (with permission)
Mediator meets Party A - reports Party B's response
Process continues until consensus emerges

12. Presenting Claims and Evidence

How Parties Present Claims

Initial Claim Presentation:

Each party presents their position:

Party A's Presentation (typically 15-30 minutes):

What happened (facts)
Why they believe they are right
What harm or loss they suffered
What they want as resolution
Any supporting documents

Party B's Response (typically 15-30 minutes):

Their version of facts
Why they believe their position
Their understanding of harm
What they think is fair
Counterarguments to Party A

Mediator's Questions:

Clarifying questions: "Can you explain what happened on [date]?"
Interest questions: "What is most important to you in resolving this?"
Reality questions: "What are the realistic outcomes?"
Solution questions: "What would satisfy you?"

Types of Evidence Admissible

Documentary Evidence:

Contracts and agreements
Emails and written correspondence
Invoices and payment records
Photographs
Expert reports
Medical records
Property documents

Witness Testimony:

Parties' statements
Witness statements (written or in person)
Expert opinions

Physical Evidence:

Damaged property (if applicable)
Business records
Any tangible proof

Informal Evidence:

Unlike courts, mediators can consider:
Hearsay
Unsworn statements
Opinion evidence
Character evidence
If parties agree it's relevant

Evidence Rules

Unlike courts, mediation has flexible evidence rules:

Admissibility: Parties decide what evidence is relevant

Weight: Parties and mediator decide how much weight to give evidence

Formality: No strict rules on how evidence presented

Cross-examination: Not formal, but parties can question evidence

13. Role of Mediator in Finding Solutions

Mediator's Solutions Role

Mediator actively helps identify solutions:

Not a Judge: Mediator doesn't decide dispute like judge would

Active Facilitator: Mediator actively helps find mutually acceptable solutions

Per Section 14: Mediator "specifies an appropriate procedure by considering the nature of the dispute and the desire of the parties to settle the dispute promptly"

Solution-Finding Techniques

Active Listening:

Listen to what parties say
Listen to what they don't say (underlying interests)
Summarize back to confirm understanding

Identifying Interests:

Separate from stated positions
Ask: "What's really important to you?"
Recognize underlying concerns
Find common interests

Reality Testing:

Ask hard questions about case strength
Help parties assess realistic outcomes
Discuss litigation risks and costs
Encourage realistic expectations

Brainstorming:

Suggest multiple possible approaches
Invite creative solutions
Explore "what if" scenarios
Combine ideas from different sources

Option Development:

Build on parties' suggestions
Refine proposals
Test feasibility
Adjust based on feedback

Mediator Suggestions

Mediator can suggest solutions, but only if:

Parties willing to hear suggestions
Based on information learned in mediation
Explained as mediator's perspective (not judgment)
Parties free to accept or reject

Example Suggestion:

In contract dispute over quality of work:

Mediator might suggest: "Based on what I've heard, here are possible approaches:

Defendant redoes the work to agreed standard at no cost
Defendant pays 50% reduction, plaintiff accepts as-is
Defendant pays partial refund, works with plaintiff to improve quality
Defendant pays refund, plaintiff hires someone else to fix
Hybrid approach combining elements above

What seems most realistic to you?"

14. Settlement Agreement and Compromise Document

Settlement Documentation

When parties reach agreement, it must be documented:

Settlement Document Names:

"Compromise Document" (Milapatra)
"Settlement Agreement"
"Mediation Agreement"
"Memorandum of Understanding"

Contents of Settlement Agreement

Section 15 of Mediation Act 2068 requires:

Per Section 15, Subsection (3): "The mediator shall produce the concerned parties along with the document of mediation before the adjudicating body."

Essential Contents:

Parties: Full names and addresses
Dispute Description: Clear description of dispute being resolved
Agreed Terms: Specific terms both parties accept
Payment Terms (if applicable): Amounts, dates, methods
Performance Terms: Who does what and when
Timeline: Deadlines for performance
Dispute Resolution: If issues arise implementing agreement
Effective Date: When agreement begins
Signatures: All parties and mediator sign
Date: Date agreement is signed

Sample Settlement Agreement Format

COMPROMISE DOCUMENT (MILAPATRA)

This Compromise Document is entered into on [Nepali date: e.g., 
Chaitra 15, 2082] ([English date: e.g., March 28, 2026]) between:

PARTY A: [Full Name], [Citizenship Number], [Address]
("Claimant/Plaintiff")

AND

PARTY B: [Full Name], [Citizenship Number], [Address]
("Respondent/Defendant")

AND

MEDIATOR: [Mediator Name], [Mediator Registration Number]

WHEREAS, the parties had a dispute regarding [detailed 
description of dispute];

WHEREAS, the parties have agreed to resolve this dispute 
through mediation;

WHEREAS, the mediator has facilitated negotiations between 
the parties;

NOW THEREFORE, the parties hereby agree as follows:

1. DISPUTE DESCRIPTION: The dispute involves [clear description 
of what was disputed].

2. SETTLEMENT TERMS:
   a) Party B acknowledges owing NPR [amount] to Party A
   b) Party B agrees to pay this amount as follows:
      - First installment: NPR [amount] by [date]
      - Second installment: NPR [amount] by [date]
   c) Upon complete payment, all claims between parties are 
   resolved

3. GOODS/SERVICES (if applicable):
   Party B agrees to [specific action - e.g., repair work, 
   replacement, correction] by [date]

4. PERFORMANCE OBLIGATIONS:
   Both parties agree to:
   - Perform obligations as specified above
   - Complete performance by dates specified
   - Resolve any implementation issues through [mediator/
   further mediation]

5. FULL SETTLEMENT:
   Both parties agree that:
   - This compromise resolves all disputes regarding 
   [subject]
   - No further claims will be made
   - All previous agreements regarding this dispute are 
   superseded

6. NO COERCION:
   Both parties confirm:
   - They entered agreement voluntarily
   - They were not coerced, threatened, or misled
   - They understand the terms fully
   - They had opportunity to seek legal advice

7. TERMINATION OF LEGAL PROCEEDINGS:
   If this dispute was pending in court:
   - Parties agree to withdraw the case
   - Court will dismiss case based on compromise
   - No further litigation on this matter

8. DISPUTE ABOUT IMPLEMENTATION:
   If parties cannot implement agreement as written, they 
   will return to mediation with [mediator/new mediator] to 
   resolve implementation issues.

SIGNATURES:

Party A (Claimant): _________________ Date: _______
                    [Full Name]

Party B (Respondent): ________________ Date: _______
                      [Full Name]

Mediator: __________________________ Date: _______
          [Mediator Name]
          [Mediator Registration #]

WITNESSES:

Witness 1: _________________________ Date: _______

Witness 2: _________________________ Date: _______

Agreement Verification

Before finalizing agreement:

Mediator Must Verify:

Both parties understand all terms
Both agree to all terms
Parties can actually perform agreed obligations
Terms are realistic and achievable
Parties acting voluntarily

Party Confirmation:

Each party asks questions if needed
Each party confirms understanding
Each party confirms voluntary agreement
Each party confirms no coercion

15. Termination of Mediation Proceedings

When Mediation Terminates

Section 17 of Mediation Act 2068 specifies termination circumstances:

Termination Occurs When:

Parties Agree to Compromise:
- Agreement reached and documented
- Mediation process complete
- Settlement document signed
Parties Don't Agree to Mediation:
- Either party refuses mediation initially
- Mediation never commences
- Process terminated
Parties Don't Appear:
- Party fails to appear for scheduled session
- Despite proper notice
- Mediation cannot proceed
- Process terminated
Process Breaks Down:
- Mediation fails to progress
- Parties reach impasse
- No realistic possibility of agreement
- Mediator reports failure
Mediator Reports Termination:
- Mediator submits report to court/mediation center
- Reports that mediation failed
- Recommends case proceed to trial/other resolution

Per Section 17, Subsection (2): If mediation fails, "the mediator shall submit a report to the adjudicating body within seven days."

Mediator's Failure Report

What Mediator Reports:

Date mediation commenced
Date mediation terminated
Whether sessions were held
Whether parties appeared
Whether settlement was reached
If no settlement, reason for failure
No details of party positions (confidential)

Example Failure Report:

MEDIATION FAILURE REPORT

Case Number: [Court case number]
Date Report: [Date report written]

Parties:
Claimant: [Name]
Defendant: [Name]

Mediator: [Mediator name and registration]

REPORT:

Mediation for the above dispute commenced on [date]. The 
parties were notified and sessions were scheduled.

Session 1 (Date): Both parties appeared and discussed the 
dispute.

Session 2 (Date): Both parties appeared. Mediation continued.

Session 3 (Date): Defendant did not appear despite notification. 
Mediation could not continue.

After reasonable attempts to proceed, I conclude that the 
parties cannot reach mutual agreement. The mediation process 
has terminated.

The dispute should proceed to court trial.

Date: ___________
Mediator Signature: ___________
Mediator Registration Number: ___________

Next Steps After Mediation Failure

For Court-Pending Cases:

If court-ordered mediation fails:

Case proceeds to trial
Judge reviews case
Trial date is set
Litigation continues

For Non-Court Cases:

If mediation agreement was voluntary but fails:

Parties may pursue arbitration (if agreed)
Parties may pursue litigation
Parties may attempt different mediator
Relationship may end

16. Confidentiality and Privilege in Mediation

Mediation Confidentiality

Confidentiality is core to mediation:

What is Confidential:

All discussions in mediation sessions
Positions stated by parties
Settlement offers made
Documents exchanged during mediation
Mediator's suggestions and proposals
Mediator's observations and impressions
Reasons for accepting or rejecting proposals

Confidentiality Protections

Section 9 - Mediator Confidentiality Duty:

Mediator must not breach confidentiality without consent.

Mediation Privilege:

Per established mediation principles (even if not explicitly in Act):

Mediation discussions are privileged
Cannot be used in court against party
Mediator cannot be called to testify about mediation
Settlement offers cannot be used to prove liability
Positions stated cannot be used against party

Legal Protection:

Per Section 3 (also referenced in Civil Procedure Code):

"Notwithstanding anything contained in the prevailing law, no statement or action or document made by the parties or the mediator in the course of mediation for settlement of a dispute shall be admissible in evidence in any adjudicating body."

Translation: Mediation communications are not admissible in court.

Exceptions to Confidentiality

When Confidentiality Can Be Breached:

Party Consent: If both parties consent to disclosure
Court Order: If court orders disclosure (rare)
Prevent Harm: If mediator has reason to believe disclosure necessary to prevent serious harm or death
Report Misconduct: Mediator can report their own misconduct to authorities
Professional Obligations: If disclosure required by professional ethics rules

Protecting Confidentiality in Practice

Parties' Protection:

Parties should:

Ask mediator to clarify what is confidential
Tell mediator what information they want kept confidential
Request separate sessions to discuss sensitive matters
Avoid putting sensitive information in writing
Clearly state "This is off the record"

Mediator's Role:

Mediator should:

Explain confidentiality at beginning
Ask permission before sharing between caucuses
Remind parties of confidentiality duty
Keep detailed notes confidential
Destroy mediation notes after case concludes (unless required to maintain)
Document confidentiality agreements

17. Mediation Council and Its Functions

What is Mediation Council

Mediation Council is apex body for mediation in Nepal:

Established Under: Mediation Act 2068, Chapter 5

Official Title: Mediation Council (Melmilap Parisad)

Status: Government institution

Mediation Council Composition

Board Members (per Act Section 26):

Board consists of representatives of:

Government (Ministry of Law and Justice)
Judiciary (Supreme Court judge or designated judicial officer)
Bar Association (lawyer representatives)
Mediation professionals
Community representatives
Women representatives

Chairperson: Usually senior judicial officer or government representative

Mediation Council Functions

Per Section 27 of Mediation Act 2068, Council functions include:

1. Mediator Registration and Certification:

Review mediator applications
Issue mediation certificates
Maintain national mediator registry
Renew certificates
Revoke certificates for misconduct

2. Training Standards:

Approve mediation training programs
Designate agencies to conduct training
Approve training curriculum
Monitor training quality
Ensure training meets standards

3. Mediation Procedure Recommendations:

Suggest improvements to mediation procedures
Recommend law reforms
Recommend simplification of procedures
Suggest ways to increase mediation use

4. Quality Monitoring:

Monitor mediators' performance
Evaluate institutional capacity
Monitor mediation centers' quality
Ensure standards are maintained

5. Mediator Professional Development:

Conduct training programs
Conduct interaction programs
Enhance mediator expertise
Provide refresher training
Support mediator skill development

6. Community Mediation Framework:

Develop local-level mediation structure
Recommend to government
Support community mediator development
Link community with formal system

How to Contact Mediation Council

Mediation Council Office:

Location: Kathmandu (central office)
Contact: Available through Ministry of Law and Justice
Website: mediationcouncil.gov.np
Functions: Mediator registration, training approval, certification

18. Mediator Certification and Registration

Getting Certified as Mediator

Step 1: Complete Mediation Training

Training Requirement:

Must complete mediation training from approved provider:

Approved Providers:

Mediation Council-approved centers
Law schools
Government institutions
Recognized NGOs
International organizations

Training Content (typical):

Mediation principles (20-40 hours)
Communication skills
Conflict resolution techniques
Mediation procedures
Ethics and confidentiality
Settlement agreement drafting
Gender sensitivity training
Specialized areas (family, labor, commercial, etc.)

Step 2: Obtain Training Certificate

From Training Provider:

Upon completing training:

Training provider issues completion certificate
Certificate shows training hours
Certificate shows trainer qualifications
Certificate shows training content

Step 3: Apply to Mediation Council

Application Submission:

Per Section 20 of Mediation Act 2068:

Submit to Mediation Council Board:

Application form (prescribed format)
Copy of Nepali citizenship certificate
Copy of Bachelor's degree certificate
Mediation training certificate
Character references (typically 2)
Resume/CV
Application fee

Application Format (typically includes):

Personal information
Educational qualifications
Training details
Professional experience
Areas of specialization
References

Step 4: Board Review

Inquiry Process:

Board reviews application and conducts inquiry:

Verify citizenship
Verify education qualifications
Verify training completion
Check references
Assess suitability
Determine no disqualifying factors

Step 5: Certification Decision

Board Decision:

Per Section 21 of Mediation Act 2068:

Upon satisfactory inquiry, Board shall either:

Issue Certificate:
- Certificate issued in prescribed form
- Certificate shows mediator name, number, date
- Certificate is official recognition
- Certificate entitles person to practice mediation
Deny Certificate:
- If qualifications not met
- If fraud/forgery in application
- If person unsuitable
- If disqualifying factors found

Mediator Registration

National Registry:

Certified mediators are registered:

Maintained by Mediation Council
Publicly available
Lists mediator name, registration number, area of specialization
Updated as mediators registered/removed

Access to Registry:

Parties can access:

Court mediation centers maintain roster
Local bodies maintain roster
Mediation centers maintain roster
Parties can select from roster

Certificate Renewal

Duration:

Mediation certificates typically valid for 3 years.

Renewal Process:

Before expiration:

Mediator applies for renewal
Shows continued competence
Completes refresher training
Pays renewal fee
Certificate renewed for additional 3 years

Continuing Education:

Mediators must:

Participate in refresher training annually (4-8 hours)
Stay current with law changes
Maintain skills and knowledge
Attend professional development
Participate in interaction programs

Removal from Registry

Grounds for Removal:

Mediator can be removed from registry if:

Certificate expires and not renewed
Misconduct found (breach of confidentiality, bias, etc.)
Becomes incapable
Removed for fraud or forgery
Removed for repeated mistakes
Violates mediation principles

Removal Process:

Per Section 21, Subsection (3):

Investigation conducted
Mediator given opportunity to respond
Board decides removal
Mediator removed from registry
Certificate cancelled

19. Community-Based Mediation

Community Mediation Framework

Community Mediation refers to local-level dispute resolution:

per Section 34 of Mediation Act 2068, community mediation system is established.

Local Implementation:

Community mediation is implemented at:

Ward level
Municipality level
District level
Through community structures

Community Mediation Committees

Establishment:

Per Act Section 34-36, communities establish mediation committees:

Committee Composition (per Section 35):

Committee includes:

Designated by community organization
Representatives from women's groups
Local social workers
Teachers/professors from local schools
Community elders
Representation ensuring women's participation (at least 1/3)

Committee Size:

Typically 5-11 members representing diversity:

At least 40-50% women
Different castes/ethnicities
Different occupations
Respected in community

Community Mediation Procedures

Mediation Committee Role:

Committees facilitate dispute resolution:

Case Registration: Party brings dispute to committee, case is registered
Mediation Process: Committee mediates (using mediator among members)
Settlement: If agreement, documented
Implementation: Parties implement agreement
Follow-up: Committee follows up on compliance

Case Types:

Typically handle:

Neighbor disputes
Family property matters
Inheritance disputes
Contract disputes
Neighborhood conflicts
Water rights
Land boundary issues

Not Handled:

Cannot mediate:

Criminal cases
Cases involving serious crimes
Constitutional matters
Disputes below minimum threshold

Mediator Selection from Community

Community Mediator Qualifications (per Section 22, Subsection 2):

Community mediators can be:

Literate (basic reading/writing)
Attained 25 years age
Need not have Bachelor's degree
Need not have formal training

This allows respected community members to serve.

Community Mediation Success

Results:

Community mediation has achieved:

High success rates: 80-90% settlement rate
Cost-effective: Free or minimal cost
Accessible: Available at local level
Fast: Usually resolved in weeks
Relationship-preserving: Maintains community relationships

Statistics:

As of recent years:

Over 1,400 community mediation committees active
Over 10,000 community mediators trained
Over 55% women participation
Handling thousands of cases annually

20. Practical Guide to Using Mediation Act 2068

When to Use Mediation

Ideal Situations for Mediation:

Relationship Matters: When relationship with other party is important to preserve
Business Disputes: Commercial disputes where parties want to continue relationship
Family Matters: Property partition, inheritance, family business disputes
Neighborhood Disputes: Land boundaries, property rights, local disputes
Contract Disputes: When contract requires mediation
Quick Resolution: When parties want fast resolution
Cost-Conscious: When parties want to minimize costs
Private Resolution: When parties want confidentiality

When NOT to Use Mediation

Inappropriate Situations:

Power Imbalance: When one party is significantly more powerful
Domestic Violence: Cases involving abuse (though specialized mediation exists)
Criminal Elements: Cases with criminal aspects
No Settlement Possible: When purely legal questions require court
Precedent Needed: When case needs to set legal precedent
Unwilling Party: If one party refuses mediation
Extremely Hostile: When parties cannot communicate

Step-by-Step Mediation Guide

Step 1: Assess if Mediation Appropriate

Is dispute suitable for mediation?
Are both parties willing?
Will mediation likely work?
Is relationship worth preserving?

Step 2: Find Mediator

Contact court mediation center, OR
Contact Mediation Council, OR
Contact private mediation center, OR
Contact community mediation committee

Step 3: Get Mediator Information

Verify mediator is certified
Confirm mediator has relevant expertise
Confirm mediator has no conflicts of interest
Confirm mediator is available

Step 4: Prepare for Mediation

Gather relevant documents
Prepare concise explanation of dispute
Identify what you really want
List acceptable solutions
Prepare for negotiation

Step 5: Initiate Mediation

If agreement-based: Notify other party and invoke mediation clause
If court-referred: Participate when ordered
If community: Bring dispute to committee

Step 6: Attend Sessions

Attend all scheduled sessions
Arrive on time
Participate honestly and respectfully
Listen to other party
Be flexible and creative

Step 7: Reach Settlement or Accept Failure

If settlement: Document and finalize
If failure: Accept and pursue other remedies

Step 8: Implement Agreement

Perform obligations in agreement
Make payments on time
Complete services as promised
Contact mediator if issues arise

Conclusion

The Mediation Act 2068 represents Nepal's commitment to alternative dispute resolution. By providing a legal framework for formal mediation, the Act has transformed dispute resolution from primarily court-based litigation to a diverse system including mediation at district and community levels.

The Act's success depends on:

Mediators' skill and integrity
Parties' willingness to settle
Legal system's support
Public awareness of mediation
Confidence in mediation outcomes

For lawyers, understanding the Mediation Act 2068 is essential. Lawyers must be able to:

Advise clients on mediation suitability
Draft effective mediation clauses
Represent clients in mediation
Negotiate on behalf of clients
Draft settlement agreements
Manage post-settlement implementation

As Nepal's economy develops and society modernizes, mediation will likely become even more central to dispute resolution. The Mediation Act 2068 provides the legal foundation for this transformation, offering a path to justice that is faster, cheaper, and more satisfying than traditional litigation.