Nepal Madhyasthata Ain, 2055 is the law relating to Arbitration, 2055 in Nepal. It has been applied since the date of promulgation. It has six chapters and 44 sections. The Act has the following provisions:

(a) Definitions:

The Act has defined a number of technical terms under section 2 used in the Act and can be used while handling case of arbitration. Accordingly, the terminologies such as district and appellate court, dispute, counter claim, rejoinders arbitrator etc. have been defined for the arbitration context.

(b) Arbitral dispute:

The act has categorized civil matters of commercial nature in arbitral dispute and can be taken out from the court for settlement through arbitration. It has restricted to refer non- arbitral disputes to arbitration.

(c) Number of appointment:

As provided in Sections 5-8 under the Arbitration Act, the number of arbitrator should be odd and normally, 3 but 1 is also allowed where the parties determine so. The Act has clearly recognized the provisions under section 11 upon which an arbitrator’s authority can be revoked, and his position could be made vacant.

(d) Provision as to oath and qualification:

The act has made some provisions under Sections 9 and 10 in this regard. The arbitrator has to take oath and has to hold essential qualification under law and agreement. The qualification of law is to have contractual capacity, not to be punished under law on criminal charges, not to be insolvent etc.

(e) Rights or powers and duties of arbitrator:

The Act has fixed a number of rights or powers and duties of arbitrator. Some of the powers of the arbitrator are to have submission, to determine the jurisdiction and procedure, to fix the venue, to seek the assistance of the court, to issue different kinds of award and the like. Similarly, some of the duties are to be fair, impartial to respect the principles of natural justice, to take oath etc.

(f) Working procedures:

The Act has dealt with some provisions in this respect. The arbitrator has to work in line of procedures that have been fixed by the agreement or by the Act in the silence of the agreement. He must hold the office immediately after his appointment or submission of dispute in case where he is named in the agreement.

(g) Provision as to award:

As stated in Section 24, award must be made within one hundred and twenty days from the date of submitting rejoinder. Furthermore, the majority decision is regarded as award and the decision of the umpire is recognize as valid in case where different opinion arise between the parties.

(h) Invalidity of award:

As dealt with under different section of the Act, the party dissatisfied with the award of arbitrator can file petition in the Appellate Court for invalidating it within 35 days from the date of receipt of award, by supplying a copy of application to the arbitrator and other party. The Court can uphold or nullify the decision by ordering to settle it again by a fresh decision to the arbitrators. The grounds upon which it can be invalidated are incompetence of parties to sign an agreements, it is unlawful, or unclear, excess exercise of jurisdiction, against agreement, non- arbitrary, against public policy or morality etc.

(i) Miscellaneous provisions:

The Act provides other more provisions under this chapter 6. The Arbitration must refund payment where no proceeding is held or his position falls vacant for any reason. The liability of the parties falls into the heirs in case of death or insanity.

In conclusion, the present Arbitration Act, 2055, has help business community by stipulating proper legal provisions. However, the Act is silent on definition of arbitration. The timely reform of such shortcoming will prove the Act successful.