Nepal | Chapter 5

Chapter 5
Decision of the Arbitrator and Implementation

Period Within Which Decision Must Be Taken: Except when otherwise provided for in the agreement, the arbitrator shall pronounce the decision ordinarily within 120 days from the date of submission of documents under Section 14 pursuant to Sub-section (7) of Section 17.

Circumstances in Which Decisions Must Not Be Taken:
In case any issue requiring arbitration is found to be inextricably linked with any other issue on which the arbitrator cannot pronounce the decision, the arbitration shall not pronounce decision on that issue.

In a situation in which the arbitrator cannot take a decision pursuant to Sub-section (1), the arbitration must inform the concerned parties accordingly.

The concerned party may file a complaint to the Court within 35 days from the date of receipt of a notice pursuant Sub-section (2), Notwithstanding anything contained in the prevailing law.

Decision of Arbitrator:
In case there are three more arbitrators, the decision of the majority shall be deemed to be the decision of arbitration.

In case the arbitrators have dissenting opinions so that the majority (opinion) cannot be ascertained, the opinion of the chief arbitrator shall be deemed to be the decision of arbitration, except when otherwise provided for in the agreement.

Every arbitrator must affix signature on the decision subject to Sub-section

Provided that in case there is any special reason why any arbitrator cannot affix signature on the decision, the other arbitrators shall affix their signatures explicitly mentioning the reason .

In case any arbitrator does not agree with the decision of arbitration, he/she may express his/her dissenting opinion.

Matters to be mentioned in Decision: The arbitrator must explicitly mention the following matters in the decision, except when otherwise provided for in the agreement:

Brief particulars of the matter referred to for arbitration.

In case any party had questioned the jurisdiction of arbitration, grounds for deciding that the matter falls under the jurisdiction of arbitration.

The arbitrator’s decision, and reasons and grounds for reaching that decision.

Claims which must be realized or amounts which must be compensated.

Interest on amount to be realized, and the additional rate of interest to be charged with after the expiry of the time limit for implementing the decision of the arbitrator in the event of the limit mentioned in section 31.

Place and date of decision.
Decision to be Read Out: The arbitrator shall read out the decision in the presence of the concerned parties, hand over a copy of that decision to each party, and keep evidence thereof in the case file. In case any party is absent at the time fixed for reading out the decision or refuses to accept a copy of the decision even after being present at the time fixed for reading out the decision, a notice shall be furnished to him/her along with a copy of the decision after indicating the same.

Prohibition to Rivision of Decision:
Except the Appellate Court has issued an order under Section 30, the arbitrator shall not take another decision on the matter referred to him/her for arbitration after once reading out his decision on the matter, except correcting arithmetic, printing, typing or similar other minor errors and inserting omitted particulars without prejudice to the substance of the decision.

In case any party observes that any mistake contained in the decision of the arbitrator needs to be corrected pursuant Sub-section (1) one must submit an application to the arbitrator within 30 days from the date of receipt of a copy of the decision. In case the arbitrator deems it appropriate to correct such mistakes or insert any omitted particulars, he/her may prepare a separate note thereof and have the omitted particulars inserted or mistakes corrected within 15 days from the date of receipt of the application. In case the arbitrator the deems it appropriate to make such correction, he/she must do so by preparing a note thereof and informing the parties accordingly within 30 days from the date of decision.

Notwithstanding anything contained elsewhere in this Section, in case the arbitrator has not taken a decision on any point from among the points contained in the claims made by any party, the concerned party may submit an application for a decision on the point to the extent of the matter covered by it after securing the approval of the other party within 30 days from the date of decision by the arbitrator. In case such an application is received, a supplementary decision may be taken by confining in to the matter covered by the point within 45 days from the date of application.

If the parties so agree, any party may, by notifying the other party, request the arbitrator to explain any point contained in or any part of the arbitrator’s decision which is not clear within 30 days from the date of decision. In case any such request is received, the arbitrator may explain and clarify any unclear point within 45 days.

Circumstances in which decision may be invalidated:
Any party dissatisfied with the decision taken by the arbitrator may, if one wishes to invalidate the decision file a petition to the Appellate Court alongwith the related documents and a copy of the decision within 35 days from the date the decision heard or notice received thereof under this Act. Petition shall also supply a copy of that petition to the arbitrator and the other party.

In case a petition is filed pursuant Sub-section (1) the Appellate Court may, in case the petitioner proves that the arbitration decision contains any of the following matters, invalidate that decision or issue an order to have a fresh decision taken as per necessity:

In case any party to the agreement was incompetent for any reason to sign the agreement at the time of signing the agreement, or in case the agreement is not valid under the law of that the nation which governs jurisdiction over the parties, or in case such law is not clear and agreement is not valid under the laws of Nepal.

In case the due petition was not given a notice to appoint an arbitrator or about the arbitration proceedings in time.

In case the decision has been taken on a that disputed matter which had not been referred to the arbitrator, or in a manner contrary to the conditions prescribed for the arbitrator, or by acting beyond the jurisdiction prescribed for the arbitrator.

Except when an agreement has been signed contrary to the laws of Nepal, in case the procedure of designation of arbitrators or their functions and actions do not conform to the agreement signed between the parties, or in case there is no such agreement it has not been done as per this Act.

Notwithstanding anything contained in Sub-section (2), the Appellate Court may invalidate the decision of the arbitrator in the following circumstances in case a petition is filed pursuant to Sub-section (1):

In case the dispute settled by the arbitrator cannot be settled through arbitration under the laws of Nepal.

In case the decision taken by the arbitrator is likely to be prove detrimental to the public interests or policies.

Implementation of Award: The concerned parties shall be under obligation to implement the award of the arbitrator within 45 days from the date when they receive a copy thereof.

Implementation of Award by Court: In case a award cannot be implemented within the time limit prescribed in Section 31 of this Act, the concerned party may file a petition to the District Court within 30 days from the date of expiry of the time limit prescribed for that purpose to implement the award In case such a petition is filed, the District Court shall implement the award ordinarily within 30 days as if its was its own judgment.

Interest to be paid: Except when otherwise provided for in the agreement, in case the arbitrator has taken a award providing for the payment of any amount by one party to another, the concerned party shall also pay interest at the rate prescribed by the arbitrator in the light also of the nature of the business related to the dispute and by ensuring that it is not higher than the rate of interest currently charged by commercial banks in respect to similar transactions. Provided that no interest shall be charged for the period between the date of decision by the arbitrator and the time limit prescribed for the implementation of the award under this Act.

Implementation of award Taken in a Foreign Country:
A party which willing to implement an award made in foreign country in Nepal shall submit an application to the Appellate Court along with the following documents:

The original or certified copy of the arbitrators award

The original or certified copy of the agreement.

In case the arbitrators award is not in the Nepali Language, an official translation thereof in Nepali language.

In case Nepal is a party to any treaty which provides for recognition and implementation of decisions taken by arbitrators in foreign countries, any decision taken by an arbitrator after the commencement of this act within the area of the foreign country which is a party to that treaty shall be recognised and implemented in Nepal in the following circumstances subject to the provisions of that treaty and the conditions mentioned at the time of entering into the treaty .

In case the arbitrator has been appointed and award made according to the laws and procedure mentioned in the agreement.

In case the parties had been notified about the arbitration proceedings in time.

In case the decision has been taken according to the conditions mentioned in the agreement or upon confining only to the subject matters referred to the arbitrator.

In case the decision has become final and binding on the parties according to the laws of the country where the decision has been taken.

In case the laws of the country of the petitioner or the laws of the country where arbitration proceedings havebeen conducted, do not contain provision under which arbitration award taken in Nepal cannot be implemented.

In case the application has been filed for the implementation of the award within 90 days from the date of award.

In case the Appellate Court is satisfied that the conditions mentioned in Sub-section (2) have been fulfilled in the an application filed pursuant to Sub-section (1) it shall forward the award to the District court for its implementations.

Notwithstanding anything contained in this Section, no award made by an arbitrator in a foreign country shall be implemented in the following circumstances.

In case the awarded settled dispute cannot be settled through arbitration under the laws of Nepal.

In case the implementation of the award is detrimentalto the public policy.