NEPAL Law and Practice Contributed by: Purna Man Shakya, Prakrit Shrestha and Dechen Gurung, Reliance Law Firm
investment disputes under Section 40 (see 1.1 Preva- lence of Arbitration ). Failing agreement, the procedure is governed by the default procedural provisions of Chapter 4 of the Arbi - tration Act, (Section 17 (1)). Where neither the agree - ment nor the Act addresses a particular procedural question, the proviso to Section 17 (1) allows the arbitrator to determine the procedure with the par - ties’ consent or, failing that, at the arbitrator’s own discretion; this gives Nepali arbitration a high degree of procedural flexibility within the statutory floor set by the Act. 7.2 Procedural Steps The Act prescribes a small number of mandatory pro - cedural steps. • Every arbitrator must take a written oath of impar - tiality and disclose beforehand any matter giving rise to reasonable doubt about impartiality before commencing proceedings (Section 9). • The claimant must submit its claim, with support - ing evidence, within any contractual time limit or, failing that, within three months of the dispute arising (Section 14 (1)); the respondent then has 30 days to respond and to raise any counterclaim (Section 14 (2)–(3)). Hearings must, unless the par - ties agree otherwise, be held in camera (Section 19). • Once the tribunal formally closes the hearing, it must issue its written decision, ordinarily within 30 days of that closure and, in any event, within 120 days of the claim documents being submitted, unless the parties agree a different period (Sections 17 (6)–(7) and 24). • The decision must then be read out to the parties, with a copy given to each (Section 28). 7.3 Powers and Duties of Arbitrators Section 21 of the Arbitration Act confers a broad array of powers on Nepali arbitrators, including the power to: • summon parties to produce documents and give statements; • take witness evidence;
• appoint experts and obtain or direct expert exami - nation of specific issues; • require security, including a bank guarantee, from a foreign party; • inspect places, objects, products or processes connected with the dispute, and order the sale of perishable property; • issue interim or interlocutory orders; • issue certified copies of documents; and • exercise any other power the Act confers or the parties grant by agreement. Arbitrators are subject to corresponding duties. Sec - tion 18 imposes a duty to apply Nepali law as the substantive law, unless the parties agree otherwise, and to decide ex aequo et bono or as amiable com- positeur only where expressly authorised. Section 22 imposes a duty to give each party an equal and adequate opportunity to present its case. Section 27 imposes a duty to give reasons and to record speci - fied particulars, including the basis for jurisdiction if contested, in the award. 7.4 Legal Representatives Section 22 (2) of the Arbitration Act entitles a party to attend arbitration proceedings in person or by proxy, and to designate a legal practitioner to represent it, without imposing any qualification requirement spe - cific to arbitration. Section 25 of the Nepal Bar Council Act, 2050 (1993) prohibits any person from appearing, pleading or argu - ing before the ordinary courts without having obtained a licence as a legal practitioner. It further permits a foreign lawyer to appear before a court only with that court’s express permission. This restriction, however, is understood to apply to court proceedings and not to extend to arbitral pro - ceedings. Foreign-qualified counsel may according - ly represent parties in arbitrations seated in Nepal, including international commercial and FITTA-gov - erned disputes, without separate Bar Council authori - sation. Foreign counsel are nonetheless not authorised to hold themselves out as advising on Nepali law. As a matter of practice, submissions on Nepali substantive
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