NEPAL Law and Practice Contributed by: Purna Man Shakya, Prakrit Shrestha and Dechen Gurung, Reliance Law Firm
4. The Arbitral Tribunal 4.1 Limits on Selection
Section 6 (4) supplies a default mechanism for the rou - tine two-party, three-arbitrator case: absent contrary agreement, each party appoints one arbitrator, and the two party-appointed arbitrators appoint the third, who chairs the tribunal. The Act contains no distinct default mechanism tai - lored specifically to multiparty arbitrations. In practice, such disputes are addressed through the same Sec - tion 7 court-appointment mechanism or through the parties’ contractually agreed procedure, with NEPCA’s own rules providing supplementary machinery for institutional cases. 4.3 Court Intervention Court intervention in the selection of arbitrators is lim - ited to two specific circumstances under the Arbitra - tion Act: • failed appointment procedure (Section 7) – where the parties’ agreed method for appointing arbitra - tors fails, or the agreement does not specify one, the High Court makes the appointment instead; and • unfilled vacancy (Section 8 (2)) – where an arbitra - tor’s position becomes vacant through resignation, refusal to act, death or another reason and has not been filled within 30 days as required by Section 8 (1). In both cases, the High Court’s decision is final and not subject to further appeal, limiting the scope for satellite litigation over the tribunal’s composition. The court’s intervention is otherwise circumscribed. It may act only on application by a party, must attempt to secure the parties’ unanimous agreement on a pro - posed appointee before exercising an independent choice and has no power to appoint arbitrators of its own motion or to review the substance of an appoint - ment validly made by the parties themselves. 4.4 Challenge and Removal of Arbitrators Section 11 of the Arbitration Act governs the challenge and removal of arbitrators. Where the agreement is silent, a party may, within 15 days of the arbitrator’s appointment or of learning of a disqualifying event, apply to the arbitrator concerned, rather than directly
Party autonomy in selecting arbitrators is the starting default under Section 6 of the Arbitration Act. Where an agreement names arbitrators, they are deemed appointed; where it prescribes an appointment pro - cedure, that procedure governs. Statutory limits nonetheless apply. Section 10 dis - qualifies a person from acting as arbitrator where they: • lack capacity to contract; • have been convicted of an offence involving moral turpitude; • are insolvent or bankrupt; • have a personal interest in the dispute; or • lack a qualification specifically required by the arbi - tration agreement. Section 5 (1) further requires an odd number of arbitra - tors, defaulting to three where the agreement is silent, and Section 5 (2) requires an even number specified by the parties to be converted to an odd number by adding a further arbitrator. Before assuming office, Section 9 requires every arbi - trator to take a written oath of impartiality and honesty, and to disclose beforehand any matter reasonably giv - ing rise to doubt as to their impartiality or independ - ence. 4.2 Default Procedures If the parties’ chosen method of selecting arbitrators fails and if there is no specific appointing authority, Section 7 of the Arbitration Act allows either party to apply to the High Court. The applicant must identify at least three prospective arbitrators, together with their names, addresses, occupations and fields of exper - tise, and provide a copy of the arbitration agreement. The High Court must, within 60 days, appoint the per - sons proposed if the parties can agree, or otherwise appoint whomever it considers appropriate; its deci - sion is final. The procedure for such applications is set out under Rule 5 of the Arbitration (Court Procedure) Rules.
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