NEPAL Law and Practice Contributed by: Purna Man Shakya, Prakrit Shrestha and Dechen Gurung, Reliance Law Firm
pay the tribunal’s fixed remuneration and bear the expenses of the arbitration in the proportions the tri - bunal determines having regard to the circumstances of the case. The Act does not prescribe a “costs-fol - low-the-event” rule, nor does it mandate equal cost- sharing; allocation is left to the tribunal’s discretion. In practice, tribunals seated in Nepal frequently appor - tion costs by reference to relative success, broadly consistent with a costs-follow-the-event approach, while retaining flexibility to share costs where suc - cess is mixed. There is no merits-based appeal for an arbitral award under Nepali law. A party’s sole recourse is an appli - cation under Section 30 to have the award set aside, filed within 35 days of the award being read out or notice received, at the High Court, with copies served on the arbitrator and the other party. The grounds are exhaustively listed. An award may be set aside where: • a party lacked capacity to sign the agreement or the agreement is invalid under its governing law – or, if unclear, under Nepali law (see 3.3 National Courts’ Approach ); • the required notice of the arbitrator’s appointment or the arbitration proceedings was not given; • the decision addresses matters not referred, is contrary to the terms prescribed for the arbitra - tor or exceeds jurisdiction (see 5.1 Challenges to Jurisdiction ); 11. Review of an Award 11.1 Grounds for Appeal • the appointment procedure or tribunal’s conduct did not conform with the parties’ agreement or, absent agreement, with the Act; • the dispute was not arbitrable under Nepali law (see 3.2 Arbitrability ); or • the award conflicts with public policy — the sole residual ground since the 2025 amendment removed “public interest” (see 2.2 Changes to National Law ).
Under Section 30 (4), the High Court may not re-eval - uate evidence or review the merits of the tribunal’s decision when determining a set-aside application. Procedurally, Rule 11 of the Arbitration (Court Pro - cedure) Rules requires the application to state the ground relied upon and be supported by evidence; the court will call for the case file and issue process only where the claim appears, on its face, capable of substantiation. The opposing party is summoned within seven days and may file a response, and the court must ordinarily dispose of the application within 15 days of appearance, notifying the arbitrator and any absent party of its decision. 11.2 Excluding/Expanding the Scope of Appeal The grounds for setting aside an award in Section 30 are framed as a mandatory, closed list rather than as a default rule from which the parties may contract up or down. The Act contains no provision allowing parties to expand judicial review to the merits, or to exclude the Section 30 remedy altogether. Section 39’s general ouster of the courts’ jurisdiction over matters regulated by the Act reinforces this (see 3.3 National Courts’ Approach ). Because the right to challenge an award is itself a creature of the Act, rather than an inherent judicial power, parties cannot lawfully agree either to widen the High Court’s review to a full merits rehearing or waive the Section 30 rem - edy in advance, and any such agreement would likely be regarded as contrary to the mandatory scheme of the Act. 11.3 Standard of Judicial Review The prevailing standard is markedly deferential and, since the 2025 amendment, expressly so (see 5.4 Standard of Judicial Review for Jurisdiction/ Admissibility for the Section 30 (4) codification and the Krishna Chandra Jha and Kanchanjunga Tamang authorities). This deference extends to the Supreme Court’s nar - row, procedurally focused construction of “public policy” in Hanil Engeeneering (see 3.1 Enforceabil- ity ). Only a denial of a fair opportunity to be heard, or a serious procedural irregularity, will justify refusal
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