Nepal | Chapter 2

Chapter 2
Settlement of Disputes through Arbitration

Disputes to be Settled through Arbitration:
In case any agreement provides for the settlement of disputes through arbitration, the disputes connected with that agreement or with issues coming under that agreement shall be settled through arbitration according to the procedure prescribed in that agreement, if any, and if not, according to this Act.

Notwithstanding anything contained in Sub-section (1), in case of concerned parties to a civil suit of a commercial nature which has been filed in a court and which may be settled through arbitration according to prevailing laws, file an application for its settlement through arbitration, such dispute shall also be settled through arbitration.

Cancellation of Records of the Suit: (1) The court may order for cancellation of the records of a suit filed in connection with a dispute which the concerned parties have sought to settle through arbitration pursuant to Sub-section (2) of Section 3.

Notwithstanding anything contained in Sub-section (1), the court shall not order for the cancellation of a suit in the following circumstances:

In case it is deemed necessary to pronounce a decision on any issue which cannot be arbitrated together with an issue which can be arbitrated, or In case there appears any appropriate reason why the dispute cannot be settled through arbitration.