The Gelephu Mindfulness City (GMC) has emerged as a transformative force in Bhutan’s economic landscape, conceived and designed under the foresightful vision of His Majesty. It is spearheaded by His Majesty himself as the gatekeeper to ensure its success in the radical economic transformation of the country through the lens of Gross National Happiness. However, as much as the public would like to know more about the city, the publicly available information is limited but not in its implementation. A substantial component of the implementation for the city is underway which will be visible soon. The information, particularly the details about investors and operational strategies, is unavailable to the public. This intentional secrecy is not a conventional business approach but is grounded in the highest standards of business ethics, facilitated by a tool that is relatively new in Bhutan – the Non-Disclosure Agreement (NDA).

NDA is defined by legal experts as a contractual agreement establishing a confidential relationship between two parties. It involves one party sharing sensitive information with the other, who, in turn, commits not to disclose that information to any third party. This legal protection is primarily based on the doctrine of unconscionability, an equitable legal concept that can be used to set aside unfair agreements.

The enforcement of NDAs in international business communities sets a precedent for Bhutanese investors and businesses. Understanding the far-reaching implications of NDAs is crucial for protecting business secrets, especially in a nation where such legal mechanisms are relatively new. Breaching an NDA could lead to significant legal repercussions, including hefty compensation payments, creating a paradigm shift in how Bhutanese businesses approach confidentiality.

NDAs play a pivotal role in GMC, serving as the linchpin to preserve investor confidence and trust.  Bhutan can’t afford to lose any genuinely interested investors who are willing to accept the unique and unchartered path and model of the city which has never been tried or tested elsewhere. A new venture based on the GNH concept itself is likely to cause some unease and uncertainty among some investors. Any unnecessary leakage of important information before they begin their investment could be counterproductive for the nation and its city of hope. Further, as Bhutan accepts to become one of the models of ethical business based on fairness and integrity under the watchful eyes of His Majesty and the team, Bhutan cannot afford to engage in any form of legal suit at this stage.

Bhutan, lacking specific NDA legislation, currently relies on the laws of the covenant(agreement). This situation necessitates NDAs as a standard practice which has not been the common practice in Bhutanese society. This shift marks a departure from Bhutan’s traditional culture of gossiping and information sharing information with virtually no or limited legal consequences, to severe legal consequences for breaches.

The introduction of NDAs in GMC signifies a step towards aligning Bhutanese business practices with international standards. As the business community navigates this new legal landscape, it is crucial to comprehend the intricacies of NDAs, ensuring a balance between protecting sensitive information and maintaining fairness in contractual relationships. The journey towards economic transformation in GMC necessitates a robust understanding of the numerous types of contracts and covenants in shaping this dream city.  Thus, while it is important for the public to get information on the GMC, public should not rush in rumours and unverified information. The information will come right time.

Sonam Tshering

Lawyer, Thimphu


Disclaimer: The views expressed in this article are author’s own.