Arbitration

Arbitration is a process of disputes settlement by neutral third party who decides the issues after hearing both sides in a quasi-judicial manner. It is a means of dispute settlement between the parties, where an Arbitrator gives his decision after hearing the disputing parties as neutral as the judge of the general court of law. Arbitration Act, 2055 has not defined the term ‘arbitration’ but defined about ‘Arbitration Agreement’. Arbitration Agreement means a written agreement made between parties for settlement of dispute through arbitration process which has arisen at that time or which may arises in future in respect to that agreement. Sec.2(a) of Arbitration Act, 2055

Definition of Arbitration

It is the reference to the decision of one or more persons, either with or without an umpire of a particular matter on differences between the parties. -M. R. Romily. Arbitration is the settlement of disputes and differences relating to civil matters (e.g. Money, property, or breach of contract ) between one party and another in a judicial manner by the decision of one or more persons called arbitrators, appointed by the disputing parties, without having recourse to a court of law.’- M.C. Kuchhal. Arbitration means a process of disputes settlement by neutral third party who decides the issues after hearing both sides in a quasi-judicial manner

Features

• Informal Dispute Settlement.
• Simplicity in Procedure.
• Written agreement.
• Arbitrator appointed by disputant parties.
• Not intervention by formal Authority.
• Expertise Services.
• Speed and less expensive.
• Binding force of award.
• Privacy and close hearing.
• Prompt Execution of Award.
• All the essentials of valid contract.

Powers and Function of Arbitrators

• To administer oath to the parties and witness appointing before him.
• To administer interrogation as necessary.
• To take counsels from experts in case the majority of arbitrators can not take decision over any disputant matters.
• To ask the concerned parties to appear before him and submit documents and give particulars according to requirement.
• To appoint an expert on any specific issue to examine and get his opinion on it.
• To take guarantee of property or bank guarantee in case one of the parties is foreign national.
• To order for specific performance of the contract under some special circumstances.
• To enjoy and follow the powers given by the law.
• To inspect the disputed place, product, production process, structure and other things.
• To exercise the special power given by the concerned parties, if any.
• To issue certified copies of document and award.

Duties of Arbitrator

In course of arbitration proceedings the arbitrator need to perform some duties along with the exercise of powers. The primary function of the arbitrator is settle out the dispute. After appointment, arbitrator or umpire is in the capacity of the judge of the regular court. They can to hear both of the parties, to examine documents, to make the award by judicial manner.

Fundamental duties of Arbitrator

• To act with judicial manner
  He must be fair and impartial and decide the dispute in the quasi judicial manner. He must follow all the arbitration clauses very strictly.
• Not to do misconduct
  The arbitrator must act in good faith and must not misconduct through him or by others. Not to perform duties as he was expected to perform duty in regarding to settlement of dispute.
• Not to act as an advocate or an agent
  He shall not act as an agent or an advocate of any party to the dispute.
• To perform all the functions personally
  An arbitrator can not delegate his powers to others.
• To provide equal opportunity to the parties
  An arbitrator has to give equal opportunity for the disputing parties to appoint legal practitioner, and an opportunity to submit their claims.
• Not to cross jurisdiction
  The arbitrator has to work within the scope of authority. If he crosses the jurisdiction his verdict will be null or void.
• To make award within prescribed time limitation.
  The arbitrator is bound to render his award (decision) within the time prescribed in the agreement. The arbitrator must make award generally within 120 days from the date of submission of the claim.
• To inform the parties of an award and to provide the copies.
• To sign the award and mention its place and date.
• The arbitrator should not take gift and charity from the party.
• To keep the file safe
  The arbitrator must safely keep the file of the arbitration proceedings. He must prepare the file of documents and evidences received from them, date and time respectively. Lastly he must refer the file to the district court for safe custody

Revocation of Arbitrator or Umpire

Revocation of Arbitrator’s authority means to restrict Arbitrator to regulate the initiating arbitral proceedings. It is also termed as revocation of an arbitration agreement. By revocation of arbitrator She/he discharged from the authorities of arbitration. The parties and the court in the following circumstances may revoke the authority of an arbitrator.

Revocation by the Mutual Agreement of the Parties

If the both parties, even after submission of disputes to the arbitration by their mutual agreement, can revoke the arbitrator’s authority. It should, however, be noted that they cannot revoke his authority after award being issued by him.

Revocation by Permission of the Court

The parties to the arbitration agreement may be revoking the arbitrator’s authority also by the permission of the court. But, only on some specific circumstances, the court allows them to revoke the arbitrator’s authority. The court may give permission to the parties to revoke or remove an arbitrator’s on the following circumstances:-

• Appointment of the arbitrator without free consent of the party.
• If the arbitrator acts partially in a biased manner.
• If the arbitrator acts against the natural law of justice or judicial principles or the existing law.
• When an unreasonable absence in the meetings.
• If an arbitrator continuously commits irregularity and mistakes.
• If an arbitrator is not qualified or loss his qualifications.

Majors Provisions of Nepal Arbitration Act, 1999

• Nepal Arbitration Act, 1999 has six chapters and 44 sections. Majors Provisions of Act are as following;
• Provisions relating to definition of various terms,
• Provisions relating to Arbitral dispute,
• Provisions relating to Number of arbitration,
• Provisions relating to oath and qualification,
• Provisions relating to Rights or powers and duties of arbitrator,
• Provisions relating to working procedures:
• Provisions relating to award
• Provisions relating to Invalidity of award
• Provisions relating Miscellaneous provisions etc.

Frequently Asked Questions (FAQ)

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