Termination Of Arbitrator’S Mandate In Nepali Arbitration

01 Mar 2026 --
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1. Statutory Framework in Nepal

1.1 Arbitration Act, 2055 (1999) – Core Provisions

Under the Arbitration Act 2055 of Nepal:

Section 11 sets out grounds for removal of an arbitrator where the arbitration agreement is silent or does not provide a procedure.

A party may apply for the removal within 15 days from appointment or from knowing the arbitrator has failed to act.

1.2 Grounds for Termination / Removal (per Sec‑11)

If the agreement does not specify a removal mechanism, a party may request a removal on the following grounds:

Bias or lack of impartiality (showing favouritism to a party).

Improper conduct or fraud during the arbitration.

Frequent mistakes / irregular acts in proceedings.

Failure to attend arbitration meetings repeatedly without satisfactory reasons, causing delays.

Contravention of natural justice principles.

Lack or loss of necessary qualifications or becoming disqualified under law.
After an application, the arbitrator must decide within 30 days; if they refuse, a court (Appellate Court) decides.

2. Grounds for Termination of Mandate – Explanation

Termination of an arbitrator’s mandate refers to when an arbitrator ceases to hold office as a result of voluntary withdrawal, party application, court decision, or other statutory circumstances.

2.1 Voluntary Withdrawal

An arbitrator may resign at any time.

Once the arbitrator resigns, their mandate is automatically terminated.

Illustrative Case:
In Yakshyadhoj Karki v. High Court Patan and others (Decision No. 10369), the Supreme Court of Nepal (2076 B.S.) dealt with arbitration tribunal matters where one or more arbitrators cannot act, and courts confirmed that where arbitrators resign or cannot continue, appointment of substitute arbitrators is proper under Nepalese law.

2.2 Removal Based on Misconduct or Failure to Act

A party can approach the arbitrator requesting removal.

If arbitrator refuses, Appellate Court has the power to decide on termination of mandate.
This reflects judicial supervision where arbitrators fail to act impartially or fulfill duties.

Illustrative Case:
While many Nepalese decisions relate generally to arbitration mandate or tribunals, the Supreme Court in Umakant Jha v. Appellate Court, Patan (Decision No. 8156) held that the Appellate Court only has a correctional jurisdiction under Section 30 of the Arbitration Act, which impacts how courts engage with arbitration processes including issues where arbitrators may have failed in procedural duties, thus implying limits on curial interference relating to an arbitrator’s actions.

2.3 Causes Relating to Arbitration Proceedings Termination

Although not always directly about arbitrators, some cases imply mandate termination when arbitration proceedings end:

Proceedings termination often means the tribunal’s authority is also terminated.

Nepal’s Arbitration Act provides that arbitration ends upon final award or other statutory events.

Illustrative Case:
In National Construction Company, Nepal v. Appellate Court, Patan (Decision No. 7933), the Supreme Court held that if parties do not comply with requirements (like appointment timelines), courts cannot interfere, affecting the arbitral process including arbitrators’ roles. While not directly ruling on termination of mandate, the case confirms that if arbitration process collapses due to non‑compliance, arbitrators’ mandates are effectively ended.

3. Specific Procedural Steps for Termination / Removal of Mandate

3.1 Application by Aggrieved Party

File Application: Must be within 15 days from appointment or from the date when aware of failure or misconduct.

Must State Grounds: The application should specify how the arbitrator breached impartiality, natural justice, etc.

Example Legal Requirement:
Under Sec‑11, the arbitrator whose removal is requested must decide within 30 days. If the arbitrator refuses or parties object, the Appellate Court takes final decision.

3.2 Decision by Arbitrator or Court

If the arbitrator agrees, mandate terminates.

If the arbitrator refuses, decision goes to Appellate Court and its judgment is final.

This has similarities with international practice but is specific under Nepal law.

4. Additional Considerations

4.1 Qualification Ceasing During Mandate

If an arbitrator ceases to meet qualifications (e.g., becomes insolvent, disqualified by law), that can serve as ground for removal.

4.2 Arbitration Agreement Provision

If the arbitration agreement specifies its own removal process, that contractual mechanism governs instead of Sec‑11.

5. Illustrative Case Laws (Nepal Context)

Below are six notable Nepalese judicial decisions that illustrate themes relevant to arbitrator mandate and termination principles (directly or indirectly):

Case Name & Decision	Key Legal Principle
Yakshyadhoj Karki v. High Court Patan & Ors (Decision No. 10369)	Confirmed court‑supervised appointment when arbitrators cannot continue; implicates termination of mandate due to inability to act.
Umakant Jha v. Appellate Court, Patan (Decision No. 8156)	Clarified court’s limited jurisdiction under Sec‑30 over arbitration proceedings, impacting judicial role when arbitrators err.
National Construction Company, Nepal v. Appellate Court, Patan (Decision No. 7933)	Held parties’ failure affects tribunal’s commission, effectively ending its role.
Supreme Court Decisions on Arbitration Awards (various)	Court emphasised arbitration award validity and tribunal jurisdiction — indirectly recognizing mandate boundaries.
Provisions under Arbitration Act Sec‑11 (statutory basis)	Grounds for removal including bias, misconduct, and irregularities.
Statutory qualification principles	Loss of eligibility leads to removal application.

Note: Specific Nepal Supreme Court cases directly addressing arbitrator mandate termination are fewer in publicly accessible summaries; however, many broad case decisions discuss arbitration tribunal authority, appointment, and court supervision which inform termination principles.

6. Conclusion — Key Points

Termination of an arbitrator’s mandate in Nepal can occur by:

Voluntary resignation.

Application for removal under Sec‑11 for misconduct, bias, failure to act, etc.

Court order by the Appellate Court where arbitrators refuse to relinquish office.

Loss of qualification during mandate.

Procedure requires filing within 15 days and a decision within 30 days of submission.

Nepalese case law illustrates both procedural supervision and the importance of arbitration mandate boundaries even if explicit “termination” cases are less frequent.