NEPAL Law and Practice Contributed by: Purna Man Shakya, Prakrit Shrestha and Dechen Gurung, Reliance Law Firm
example, by conducting linked arbitrations before a single tribunal or agreeing to determine multiple disputes within a single reference. NEPCA’s rules likewise do not currently provide a developed multi- contract or multiparty consolidation procedure of the kind increasingly common in major institutional rules elsewhere (see 1.3 Arbitration Institutions ), an area Consistent with the position on jurisdiction over non- signatories discussed in 5.6 Jurisdiction Over Third Parties , a third party can become bound by a Nepal- seated arbitration agreement or award only through ordinary principles of privity, assignment, novation or agency recognised under the National Civil Code (Sections 529 and 530). regarded as ripe for future reform. 13.5 Binding of Third Parties
This may occur, for example, where a party’s rights and obligations under the contract containing the arbitration clause are validly assigned or novated to a successor – or under Section 38 of the Arbitration Act, where, if a party dies, disappears or is declared of unsound mind during the proceedings, that party’s rights and liabilities then devolve on the heir entitled to inherit its property under the prevailing law. Outside these recognised routes, Nepali courts have not developed a group-of-companies or alter-ego doctrine permitting a tribunal to bind an unwilling non-signatory – domestic or foreign. The Arbitration Act provides no express joinder mechanism to bring a non-consenting third party into an existing reference.
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