NEPAL Law and Practice Contributed by: Purna Man Shakya, Prakrit Shrestha and Dechen Gurung, Reliance Law Firm
award and record even after the file passes into court custody. The Act does not, however, contain a comprehensive confidentiality regime covering every stage and cate - gory of document. There is no express default obliga - tion, for example, applying to the parties’ own use of pleadings or evidence outside the arbitration; the pre - cise scope is generally left to the parties’ agreement or the tribunal’s procedural orders, supplemented by NEPCA’s institutional rules where NEPCA administers the case. Once a set-aside or enforcement application reach - es the High Court or District Court, the proceedings become part of the public judicial record in the ordi - nary way, subject to whatever redaction the court may permit. 10. The Award 10.1 Legal Requirements Section 27 of the Arbitration Act specifies the manda - tory contents of an award. It must include: • a brief statement of the matter referred to arbitra- tion; • where jurisdiction was contested, the grounds on which the tribunal found the dispute to fall within its jurisdiction; • the tribunal’s decision, together with its reasons and grounds; • the sums to be paid or compensation to be made; • the applicable interest rate, including any additional rate after expiry of the time for compliance; and • the place and date of the decision. Where there are three or more arbitrators, the award is that of the majority or – absent a majority – that of the chief arbitrator, unless the parties agree otherwise (Section 26). Every arbitrator must sign the award, and anyone who declines must have the reason recorded by the others. The award must ordinarily be rendered and read out, within the timelines set out in 7.2 Procedural Steps (Sections 24 and 17 (7)). The 2025 amendment’s
fast-track enforcement timeline under Section 13A is addressed in 2.2. Changes to National Law . 10.2 Types of Remedies The Arbitration Act does not enumerate or restrict the categories of remedy a tribunal may award. Section 27 (d) and (e) contemplates monetary awards, sums to be realised or compensation together with interest as the paradigm remedy (see 2.2 Changes to National Law ). Section 18 (3) directs the tribunal to decide according to the terms of the contract and applicable commer - cial usage, which in practice channels most awards towards compensatory damages, specific contractual sums and interest. There is no statutory bar on non-monetary relief such as specific performance, rectification or injunctive- type orders, where the contract and the tribunal’s mandate permit them. Section 21 (1)(g) separately empowers preliminary, interim or conditional orders during the proceedings (see 6.1 Types of Relief ). Punitive damages are not a recognised head of relief under Nepali substantive contract law, which will ordi - narily apply absent a foreign governing law validly chosen under Section 18 (1). A punitive award would accordingly be vulnerable to challenge as exceeding the scope of the reference under Section 30 (2)(c) or as contrary to public policy under Section 30 (3)(b) (see 11.1 Grounds for Appeal ). 10.3 Recovering Interest and Legal Costs Interest is expressly governed by Section 33 of the Arbitration Act. Where an award orders payment of a sum, the tribunal must fix the applicable interest rate having regard to the nature of the underlying business, capped so as not to exceed the prevailing commercial bank rate for comparable transactions. Interest may, however, be claimed only up to the day before the arbitrator-appointment process is initi - ated (see 2.2 Changes to National Law ). No inter - est accrues thereafter, including during the period between that point and the expiry of the 45-day period allowed for voluntary compliance under Section 31. Costs are addressed by Sections 35 and 36. Unless the agreement provides otherwise, the parties must
639 CHAMBERS.COM
Powered by FlippingBook