The Court System

1. The Court System • Disputes are inevitable in business transaction.Businesses may face disputes with their competitors, suppliers, customers and government agencies during the course of their business activities. • A dispute means a difference or disagreement between two or more parties.The disputes require resolution either in a court system through civil litigation or outside of a court through alternative dispute mechanism such as negotiation, mediation or arbitration. • The Court System in Nepal • Constitutional Provisions on Judiciary: Part 10 of the Interim Constitution of Nepal. • Powers relating to Justice in Nepal to be exercised by courts and other judicial bodies in accordance with the provisions of the Constitution, other laws and the recognized principles of justice. (Article 100). • There are three levels of courts in Nepal. (Article 101): Supreme Court, Appellate Court (16) and District Courts (75). • The court procedures are provided in the Country Code (MulukiAin), Chapters on Court Proceedings and on Punishment, Judicial Administration Act, 2048, Supreme Court Rules, 2049, Appellate Court Rules, 2048 and District Court Rules, 2052.

2. Jurisdiction of Courts • Literal meaning: the power to speak law. • Jurisdiction defines the limits within which a court may declare, administer or apply the law. It is the power of the court to hear and decide the cases. • The limitations imposed upon a court by a constitution, and the statutes that created it, determine what kinds of disputes it may resolve, depending upon who the parties to a case are. • Without jurisdiction, a court cannot exercise authority. • Two types of jurisdiction: subject matter jurisdiction and personal or territorial jurisdiction. • Subject Matter Jurisdiction: The types and nature of disputes a court can accept to resolve. • Personal or territorial Jurisdiction: The location of the defendant or the location of the disputed property. • Both the subject matter and personal jurisdiction requirements must be met for a court or judicial body to hear and settle a case. • The plaintiff must select the court that has the appropriate jurisdiction.

3. Courts and Their Jurisdiction • District Court: Trial court or the court of first instance. It determines the fact in a dispute and applies the appropriate law to those facts in making a decision (at the original stage). They are also responsible for enforcement of judicial decision within their jurisdiction. • Appellate Court: It has the original and appellate jurisdiction. Under original jurisdiction, it acts like a trial court in certain cases prescribed by law and determines the fact in a dispute and applies the appropriate law to those facts in making a decision. Under the appellate jurisdiction, it is concerned with errors in the application of the law by lower courts and other judicial bodies or tribunals and making sure proper procedure was followed at the trial court proceedings. • Supreme Court: It is the highest court of Nepal. The lower courts and other government bodies must follow the legal rulings and principles made by it. It has ordinary and extra- ordinary jurisdictions. Under ordinary jurisdiction: a. To decide a case under the original jurisdiction, if a law so specifies, e.g. a case on contempt of the court. b. To hear the appeal of a case decided by the appellate courts under their original jurisdiction.

4. Contd.. c. To examine the judgment where more than 10 years of imprisonment or life imprisonment was imposed by the appellate court, even though it was decided under the appellate jurisdiction. d. To revise the decision of the court of appeal, even if the appellate court confirms the original decision on the following grounds: • if there is a serious error in the interpretation of any provision of the constitution or law, • if the judgment is contrary to the precedents or it has been misinterpreted. e. To review its own judgment, on the circumstances, as specified by law. Generally a court cannot review its judgment once delivered. But, in the case of the Supreme Court, it is an exception. • Grounds for review: • if any new evidence which could make substantial difference to the judgment is found after the delivery of judgment, • if the judgment is deemed contrary to a precedent pronounced by the supreme court or general principles of law.

5. Contd.. • Extraordinary Jurisdiction: • To issue writs- Habeas corpus, certiorari, mandamus, quo-warrantoand prohibition, in case: • Unreasonable restriction is made against fundamental rights. • Other remedy is not available under any law or it is not effective or adequate even in the case of availability. • To exercise judicial review, if any Act of Parliament or regulations formulated by different government bodies or its provision is deemed to be inconsistent with the constitution, it may invalidate the law in question. • To issue writs for the safeguard of public rights or interests (PIL). Other Judicial and Quasi-judicial bodies • There are other judicial and quasi judicial bodies which also hear and decide special category of disputes or cases: Revenue Tribunal, Labour Court, Debt Recovery Tribunal, Administrative Court, Special Court, Tax and Revenue Offices, Customs Offices, District Administration Offices, Local bodies etc.

6. Settlement of Disputes and Civil Procedures • How a party who has suffered a legal wrong can seek relief in the courts? • A business that has a civil dispute and is going to litigation must first determine which court has the power and authority to hear and decide the case, and then find out what procedures it needs to follow. • From the moment the plaintiff (the party who claims to have suffered an injury that the law can remedy) brings an action, a lawsuit is governed by detailed procedural rules. The rules are called civil procedures. • The rules of civil procedure force the parties to define issues in the dispute. They also control how the parties to the dispute (plaintiff and defendant—the party who allegedly injured the plaintiff) present evidence in support of their positions. Civil procedure, thus, governs civil litigation process.

7. Civil Litigation Process • Plaintiff files a statement of claim or complaint with a court, stating therein how he/she is injured by the defendant. • A summons (service of process by the court directing the defendant to appear before the court to defend against the plaintiff’s allegations) is issued and served to the defendant. • The defendant files the statement of defence within the time period provided in the summons. Failure to do so usually results in a default judgment in favour of the plaintiff. • Adversarial system of trial. • Evidence is produced by both the parties. Witnesses may be summoned and made to depose. Cross examination by the other party. • Pleadings by the lawyers. • Decision or the verdict of the court.

8. Contd.. • Appeal to a superior court, if the dissatisfied party so desires. • Appeal judgment. • Execution of the judgment facilitated by the court. • A compromise between the plaintiff and the defendant is always possible, which is executed through a deed of compromise authenticated by the court. Some Key Issues • Locusstandi (who has the right to sue). • limitations (the time period within which a lawsuit must be filed). • Withdrawal of a lawsuit before the defendant files his/her defence. • resjudicata (no two lawsuit by the same plaintiff against the same defendant on the same issue) etc.

9. Civil and Criminal Procedures Civil Procedure Criminal Procedure Parties: Prosecutor and accused Court proceedings start with a charge-sheet. Standard of Proof: The prosecutor must prove his case beyond a reasonable doubt. Decision: An accused may be convicted if he/she is guilty and acquitted if he/she is innocent Sanctions: Imprisonment, fine. • Parties : Plaintiff and Defendant • Court Proceedings start with a statement of claim or complaint. • Standard of Proof: the plaintiff must establish his/her case on the balance of probabilities, i.e. The evidence weighs more in favour of the plaintiff than the defendant. • Decision: A defendant may be found liable or not liable. • Sanctions: damages, injunction, rescission, specific performance etc.

10. Alternative Dispute Resolution (ADR) • Courts are not the only devices for resolving civil disputes. Nor are they always the best means of doing so. • Settling private disputes, especially business disputes, through the courts can be a cumbersome, lengthy, and expensive process for litigants. • The increasing caseloads has also imposed ever-greater social costs. • For the above reasons and others, the various forms of alternative dispute resolution(ADR) have assumed increasing importance in recent years. The most common forms of ADR are mediation and arbitration. • In mediation, a neutral third party acceptable to both sides acts as a mediator. The mediator has no power to make a binding decision, but assists the parties in reaching a settlement. The mediator hears both the parties, identifies and clarifies the issues, and suggests middle ground that might be acceptable to the parties. • In arbitration, a dispute is referred to an arbitrator or a group of arbitrators in odd number appointed by the parties to the dispute themselves. The arbitrator will hear the parties, as much as in a court case but with less formality and more promptly, and will deliver a decision with reasons which will be binding upon the parties.