2 Nepali banks win legal battle in Chinese court to reclaim Rs 1.56 billion

Kathmandu, November 6

Two Nepali banks have collectively won a case to reclaim Rs 1.56 billion that was stuck in China for the past eight years, claims their lawyer.

Senior advocate Gandhi Pandit says Bank of Kathmandu and Himalayan Bank won the case related to the under-construction Melamchi Water Supply Project.

Judges in the Zhengzhou Intermediate People’s Court on Friday issued the verdict in favour of an appeal for the revision of a previous order made by the High People’s Court of Henan Province.

Under bank guarantees, the Bank of Kathmandu had given Rs 900 million to a Chinese construction company named China Railway 15 Bureau for the project whereas Himalayan Bank had given Rs 660 million. “Now, the banks will get back the money stuck for the past eight years,” says lawyer Pandit.

Likewise, the verdict has given an opportunity to Nepal to refute charges made against it in relation to the international contract system, according to him.

The government had cancelled the agreement with the company, with whom the Nepali banks had signed bank guarantee agreements, after four years alleging it of delays in the tunnel construction. Following this, the money of the Nepali banks had got stuck in China.

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