completed· Governance

Legal and Judicial reforms to Strengthen Creditor Rights

The proposed grant has two components - (i) Strengthening judicial delivery in commercial and banking cases by establishing a new commercial courtcomma and (ii) obtaining baseleine data on Judiciary. (i) Nepal has recently passed a set of legislations (such as the Insolvency Ordinance) vesting jurisdiction in a yet to be established Commercial Court. These matters are presently being taken to the general courtscomma whose functioning leaves a lot to be desired. In absence of continuing training being provided to judges (see below)comma judges get insufficient exposure to commercial practices. There is no awareness of the opportunity cost when productive assets get blocked in the courts. An all new Commercial Court looks an attractive alternativecomma but may possibly be unproductive as an independent entity. Another way of achieving this may be through a dedicated Commercial Bench at the Appellate and Supreme Court level. This sub-component of the grant will finance the (i) setting up of the Commercial Benchcomma the procedurescomma manualcomma case management systemcomma (ii) an assessment of training needs and development of modules which can be used to train the judges and support staff. (iii) study of existing model of division of jurisdictions and performance of institutions. (ii) Lengthy court proceedings are perhaps the most visible symptom of the crisis in the Nepali judiciary. They translate into significant and perpetual backlogs - a breeding ground for petty corruption. There have been many initiatives to tackle this problem. Most of them have focused at case management in the narrow sense of processing papers and reorganizing and/or automating some of the business operations. More is needed to sustain increase court productivity and reduce both time and costs of court operations. Such reforms should certainly include consolidation of court jurisdiction and competence so the cases are decided with less cost without compromising quality. The reform should expand to include the distribution of cases among the courts to allocation of cases to judges. Judicial Map (geographical organization of the courts) seems also to contribute to lower performance of the courtscomma as large number of the courts necessarily impede specialization and lead to difficult and costly supervision. Although civil procedures in Nepal does not seem to be terribly formal (28 steps comparing to 29.7 regional average) they are in need of improvement. Endless opportunities for appeals seem to be a big problem whichcomma in addition to increasing delay and costscomma raises opportunities for corruption. To formulate the foregoing reforms it is necessary to have the necessary data and information on the judiciary. This subcomponent of the grant will finance the -(i) the collection of baseline datacomma including public perception of judiciary (ii) judicial mapping (iii) assessment of judges performance The objective of the Project is to build capacity of the judiciary in providing dispute resolution services in banking and commercial matters through commercial bench and data collection and analysis.