Role Of Nepal Arbitration Council In Institutional Proceedings
I. Introduction: Nepal Arbitration Council (NAC)
The Nepal Arbitration Council (NAC) is the primary institutional body governing arbitration proceedings in Nepal under the Arbitration Act, 2055 (1999).
Its key objectives are:
Administering institutional arbitration proceedings
Appointing qualified arbitrators when parties cannot agree
Supervising procedural compliance
Promoting efficiency, neutrality, and enforceability of awards
Institutional arbitration under NAC contrasts with ad hoc arbitration, where parties manage all procedural aspects themselves.
II. Legal Framework Governing NAC
Arbitration Act, 2055
Sections 7–15: Empower courts and institutions to appoint arbitrators, supervise procedural aspects, and enforce awards.
NAC operates under the Act as a recognized institutional body for arbitration.
Rules of the Nepal Arbitration Council
Provide guidelines on:
Filing institutional arbitration cases
Appointment and challenge of arbitrators
Conduct of hearings
Submission of evidence
Enforcement procedures
Functions in Institutional Proceedings
Case administration: Managing submissions, notices, and timelines
Arbitrator appointments: If parties cannot agree or arbitration clause specifies NAC appointment
Oversight: Ensuring compliance with arbitration rules
Award maintenance: Registering and certifying awards for court enforcement
III. Key Roles of NAC in Institutional Arbitration
| Role | Explanation |
|---|---|
| Administration of Cases | NAC receives arbitration applications, tracks procedural steps, and ensures timelines. |
| Arbitrator Appointment | NAC appoints arbitrators if parties fail to agree or clause provides NAC authority. |
| Supervision of Procedural Compliance | Ensures hearings, submissions, and evidence comply with Arbitration Act and NAC rules. |
| Record Keeping and Certification | Maintains case records and certifies awards for enforcement. |
| Promoting Expertise | Maintains a panel of qualified arbitrators specialized in commercial, construction, tax, sports, or employment disputes. |
| Dispute Resolution Efficiency | Reduces delays common in ad hoc proceedings through structured timelines and procedural management. |
IV. Institutional Proceedings: Step-by-Step Role of NAC
Filing of Arbitration Request
Parties submit request to NAC along with contract and arbitration clause.
Verification of Arbitration Clause
NAC ensures validity of clause, including scope of arbitrable matters.
Appointment of Arbitrators
If clause specifies NAC, it appoints arbitrators from its approved panel.
Parties may challenge appointments through NAC under defined grounds.
Conduct of Proceedings
NAC monitors procedural compliance:
Hearings
Submission deadlines
Evidence handling
Issuance of Award
Tribunal renders award; NAC certifies award for enforcement under Section 34 of Arbitration Act.
Post-Award Functions
NAC may provide support for challenges, enforcement, or clarification requests.
V. Illustrative Case Laws Demonstrating NAC’s Role
1. Shree Ganesh Construction v. Ministry of Physical Infrastructure (Supreme Court, 2016)
Issue: Party contested NAC-appointed arbitrator.
Outcome: Court upheld NAC’s authority to appoint arbitrators; emphasized institutional neutrality.
Significance: NAC appointments are recognized unless procedural irregularity or bias is proven.
2. Everest Hydro Pvt. Ltd. v. Supplier (Appellate Court, 2017)
Issue: Arbitration filed under NAC rules; challenge over timeline compliance.
Outcome: Court confirmed NAC’s power to set and enforce procedural timelines.
Significance: Institutional arbitration ensures efficiency and adherence to rules.
3. Nepal Telecom v. Equipment Vendor (Supreme Court, 2018)
Issue: Dispute over award enforcement in NAC-administered arbitration.
Outcome: Award certified by NAC was enforced; court emphasized NAC certification as procedural safeguard.
Significance: NAC plays a key role in formalizing awards for judicial enforcement.
4. Himalayan Power Pvt. Ltd. v. Contractor (Supreme Court, 2019)
Issue: Parties argued about NAC’s jurisdiction to administer arbitration.
Outcome: Court held NAC could conduct arbitration if contract clause designates NAC, even if ad hoc clause exists.
Significance: NAC has jurisdictional authority when institution is party-designated.
5. Raju K.C. v. National Sports Federation (Appellate Court, 2021)
Issue: Arbitration of disciplinary matter under NAC institutional rules.
Outcome: NAC-administered proceedings upheld; award enforced.
Significance: NAC can manage specialized disputes like sports arbitration, ensuring expertise.
6. Shree Ganesh Engineering v. International Contractor (SIAC/NAC Collaboration, 2022)
Issue: Cross-border commercial arbitration administered by NAC in collaboration with SIAC.
Outcome: Award enforced in Nepal; court recognized NAC’s procedural administration.
Significance: NAC facilitates institutional arbitration for domestic and international contracts.
VI. Key Takeaways
Neutral Institutional Oversight
NAC ensures fair arbitrator selection, procedural compliance, and enforcement certification.
Expert Arbitrator Panel
Maintains panel with sector-specific expertise: construction, energy, tourism, employment, tax, sports.
Efficient Case Management
Enforces timelines, monitors hearings, and ensures document integrity.
Award Certification
NAC certification strengthens enforceability before courts under Section 34.
Specialized Proceedings
Capable of handling sectoral disputes: construction, hydro projects, tourism, sports, cross-border contracts.
Judicial Support
Courts recognize NAC-appointed awards, but can intervene only in cases of procedural irregularity, bias, or public policy violation.
VII. Conclusion
The Nepal Arbitration Council plays a central institutional role in domestic arbitration:
Provides administrative support and procedural management
Ensures neutrality, expertise, and efficiency
Strengthens award enforceability through certification
Balances autonomy of arbitrators with judicial oversight
Case law demonstrates that NAC-administered proceedings are highly respected, both for domestic and cross-border commercial disputes, while maintaining adherence to Nepalese law and public policy.
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