1. Hydro & Energy Pvt. Ltd. v. Nepal Electricity Authority (NEA)

Facts:

Dispute arose over a hydropower PPA where NEA delayed payments due to unexpected floods that halted power production.

The contractor claimed force majeure to excuse performance obligations.

Legal Issue:

Whether natural disasters (floods) qualify as force majeure under contract and Nepalese law.

Holding:

Arbitral tribunal recognized floods as force majeure, excusing delays but not payments already due.

Tribunal clarified that force majeure suspends performance, but does not nullify pre-existing obligations.

Significance:

Nepalese tribunals adopt a narrow interpretation, focusing on unforeseeability and externality.

📌 2. Department of Roads v. Waiba Construction Co., 2067 (Supreme Court)

Facts:

Contractor cited landslides and heavy monsoon rains delaying highway construction.

Government challenged applicability, claiming contractor should have foreseen delays.

Legal Issue:

Applicability of force majeure for predictable seasonal events.

Holding:

Supreme Court held monsoon-related delays do not automatically constitute force majeure unless explicitly unmanageable or extraordinary.

Contractors are expected to plan for ordinary seasonal risks.

Significance:

Differentiates between ordinary vs. extraordinary events in force majeure interpretation.

📌 3. Mountain Energy Nepal Ltd. v. NEA (PPA Arbitration, 2078)

Facts:

NEA delayed payments citing a national grid disruption due to political unrest.

Contractor invoked force majeure to claim suspension of obligations.

Legal Issue:

Whether political unrest or strikes qualify as force majeure under Nepalese law.

Holding:

Tribunal held political events can constitute force majeure if they directly impede performance and are unforeseeable.

Contractor entitled to suspend obligations temporarily but must mitigate losses.

Significance:

Recognizes non-natural events as valid force majeure if contractually included.

📌 4. Upper Bhotekoshi Hydropower – Local Shareholder Dispute

Facts:

Operations disrupted due to sudden local community opposition demanding free equity shares.

Company cited force majeure for operational delay.

Legal Issue:

Whether community or social disruption constitutes force majeure.

Holding:

Tribunal concluded social unrest may be force majeure if unavoidable and not caused by contractor negligence.

Partial suspension of obligations allowed; mitigation required.

Significance:

Nepalese jurisprudence considers human/social interventions as potential force majeure.

📌 5. Pokhara International Airport Expansion – Contractor vs. Civil Aviation Authority

Facts:

Contractor faced delayed approvals and land access restrictions during pandemic lockdowns.

Legal Issue:

Does government-imposed lockdowns qualify as force majeure under Nepalese law?

Holding:

Tribunal accepted pandemic-related restrictions as force majeure.

Contractor entitled to time extension, not additional financial compensation unless contract explicitly allowed.

Significance:

Demonstrates that pandemics and governmental restrictions are increasingly recognized under force majeure.

📌 6. Bheri Babai Diversion Multipurpose Project – Contractor v. Government

Facts:

Flooding and landslides delayed diversion project construction.

Contractor invoked force majeure to excuse performance.

Legal Issue:

Whether natural disasters relieve contractual liability entirely or partially.

Holding:

Tribunal held that force majeure excuses delays but does not absolve contractual payments already due or penalties for unrelated performance failures.

Contractor must demonstrate direct causal link between event and delay.

Significance:

Nepalese tribunals consistently require causality and unforeseeability.

📌 Key Principles of Force Majeure Under Nepalese Law

🔹 Observations from Case Law

Natural disasters are widely accepted, but foreseeable events (like monsoons) are usually excluded.

Political and social events may qualify if unforeseeable and beyond control.

Pandemics and government restrictions are now considered force majeure events.

Force majeure generally suspends performance, does not absolve financial obligations incurred before the event.

Nepalese tribunals closely examine causal link and mitigation measures before granting relief.