Nepal | Chapter 3

Chapter 3
Appointment of Arbitrators and Their Office

Number of Arbitrators:
The number of arbitrators is as specified in the agreement. In case the agreement does not specify the number of arbitrators, there shall ordinarily be three arbitrators.

In case the number of arbitrators appointed under the agreement is an even one, it shall be turned into an odd one by designating an additional arbitrator chosen by them.

Appointment of Arbitrator: Notwithstanding otherwise contained in the agreement, the process of appointing arbitrators must be started within 30 days from the date when the reason for the settlement of a dispute through arbitration arises.

In case the agreement mentions the names of arbitrators, they themselves shall be recognised as having been appointed as arbitrators.

In case the agreement has made any separate provision for the appointment of arbitrators, arbitrators shall be appointed accordingly.

Notwithstanding otherwise contained in the agreement, each party shall appoint one arbitrator each and the arbitrators shall appoint the third arbitrator who shall work as the chief arbitrator.

Appointment of Arbitrators by Court:
Any party may submit an application to the Appellate Court for the appointment of arbitrators in the following circumstances:

In case no arbitrator can be appointed upon following the procedure contained in the agreement.

In case the agreement does not mention anything about the appointment of arbitrators.

The application to be filed pursuant to Sub-section (1) must explicitly mention the full name, address, occupation and the field of specialisation of at least three persons who can be appointed as arbitrator, and also be accompanied by a copy of the agreement.

Upon receiving of an application pursuant to Sub-section (1), the Appellate Court shall notify all the parties and shall appoint arbitrators from the persons proposed by them in the case of consensus in that connection, and in the case of fail to consensus, the persons deemed appropriate by the Appellate Court, within 60 days from the date of receipt of the application. The decision taken by the court in that manner shall be final.

Fullfulment of Arbitrators in Special Circumstances:
In case appointed arbitrator for the purpose of arbitration falls vacant by reason of his resignation or refusal to function in that capacity or of his/her death or any other reason, it shall be filled up by appointing another arbitrator ordinarily within 30 days from the date when the vacancy has occurred in the manner in which the arbitrator had originally been appointed.

In case of vacant arbitrator was not filled up within the time limit mentioned in Sub-section (1), any party may apply to the Appellate Court within 15 days from the date of expiry of that time limit. In case such an application is filed, the Appellate Court shall appoint an arbitrator ordinarily within 15 days subject to section 7.

Arbitrators to Take Oath:
Before starting the proceedings of arbitration, the arbitrator must affix his signature on two copies of a written oath as indicated in the schedule regarding impartiality and honesty and send one copy thereof to the Appellate Court and keep the other copy in the case-file.

Before taking oath pursuant to Sub-section (1), the arbitrator must make clear matters, if any, which raise a reasonable doubt about his /her impartiality or independence in respect to the dispute which he/she has to settle.

Qualifications of Arbitrators: The following persons shall not be disqualified for appointment as arbitrators:

Disqualified for entering into contracts as per prevailing laws.

Punished by a court on criminal charges involving moral turpitude.

Become insolvent or been declared bankrupt.

Any personal interest in the dispute which has to be settled through arbitration.

Not having any specific qualification specified in the agreement for becoming eligible for appointment as an arbitrator.

Removed of Arbitrators:
The condition and procedure for removal of an arbitrator shall be as mentioned in the agreement.

In case the condition and procedure has not been mentioned in the agreement pursuant to Sub-section (1), any party may, in any of the following circumstances, submit an application to the arbitrator requesting for permission to remove an arbitrator within 15 days from the date of his/her appointment or from the date when the party learns that the concerned arbitrator has failed to act:

In case any arbitrator is clearly seen to have shown a bias toward or discriminated against any party instead of working in an impartial manner;

In case any arbitrator engages in improper conduct or commits fraud in the course of arbitration;

In case any arbitrator frequently commits mistakes or irregularities in the course of arbitration;

In case any arbitrator does not attend arbitration meetings or refuses to take part in arbitration proceedings for more than three times without furnishing satisfactory reasons with the objective of prolonging or delaying the arbitration proceedings in an improper manner;

In case any arbitrator takes any action which is opposed to the principles or rules of natural justice; or

In case any arbitrator is found to be lacking the necessary qualifications, or to have ceased to be qualified.

Upon received an application pursuant to Sub-section (2), the arbitrator whose removal has been demanded does not relinquish his/her post voluntarily, or other party does not agree with grounds on which his/her removal , the arbitrator must take a decision on the matter within 30 days from the date of application.

A complain may be filed before the Appellate Court against the decision pursuant to Sub-section (3), and the decision of the Appellate Court shall be final.

Location of Office of the Arbitrator:
The office of the arbitrator shall be located at the following place:

At the place specified in the agreement, if any.

If the agreement does not specify the location of the arbitrators office, at the place selected by the concerned parties.

In case the concerned parties do not select such place within 15 days from the date of appointment of the arbitrator, or in case the concerned parties fail to reach an agreement in that connection, at the place specified by the arbitrator in the light of all the relevant circumstances.

Notwithstanding anything contained elsewhere in this Section, the arbitrators may, except when any other arrangement has been made by the concerned parties, designate through mutual consultations the location of their office at any other appropriate place which is convenient for them to record the statements of witnesses, obtain the opinion of experts, and inspect any document, object or place.

Language to be used by Arbitrators in their Proceedings:
The language to be used by the arbitrators in the proceedings shall be as specified in the agreement, if any. In case the agreement does not specify any such language, they shall use the language determined by them through mutual consultations. In case the arbitrators fail to determine the language to be used by them, the language used in the agreement shall be the language to be used by the arbitrators.