NEPAL Trends and Developments Contributed by: Purna Man Shakya, Prakrit Shrestha and Dechen Gurung, Reliance Law Firm
in, if at all, only where a personal allegation against them specifically requires an answer. Nepali practice has drifted from that position. It is increasingly common for a set-aside application under the Arbitration Act to name the arbitral institu - tions and the individual members of the arbitral tribu- nal as respondents in some instances ahead of, or even to the exclusion of, the actual opposing party in the underlying dispute. Tribunal members are rou - tinely expected to appear at the hearing, or to for - mally appoint counsel to represent them, and to file written submissions defending the award functioning, in effect, as defendants rather than as neutral deci - sion-makers whose reasoning speaks for itself in the record. The pattern is not confined to set-aside pro - ceedings under Section 30 either; it has appeared in constitutional writ petitions naming the tribunal along - side the parties. This matters because the Arbitration Act says nothing at all about arbitral immunity: there is no statutory pro - tection, even a limited one for acts done in good faith, that shields an arbitrator from being drawn personally into the litigation their own award has generated. An arbitrator who knows that ruling in a genuinely con - tested case may mean personally appearing in court, retaining representation and submitting a defence – win or lose on the substance of the challenge – faces a direct, structural disincentive that has nothing to do with the merits of any particular dispute. That is a cost the Model Law’s framers deliberately routed around parties, not tribunals, for good reason: an arbitrator’s independence is difficult to reconcile with a personal stake in the outcome of a challenge to their own deci - sion.
The fix here does not require Nepal to import a foreign immunity doctrine wholesale. A narrower legislative or procedural clarification, that naming the arbitrator or tribunal is for notice purposes only, and that the tribu - nal’s institutional record stands as its answer absent a specific personal allegation, would bring Nepali practice into line with the Model Law position without displacing any of the substantive grounds for chal - lenge that Section 30 already provides. Absent that clarification, the practical burden of being named as a respondent remains a quiet but real cost of serving as an arbitrator in Nepal.
649 CHAMBERS.COM
Powered by FlippingBook