Kathmandu School of Law Review

P-ISSN : 2091-2110, E-ISSN : 2773-8159, DOI : 10.46985, Publisher : Kathmandu School of Law, Nepal
Annual flagship journal of Kathmandu School of Law, Nepal

Volume 12, Issue 1, April 2023
Articles

The Juridical Canvas of Recognizing and Enforcing Arbitral Awards: A Deconstruction of Legal Frameworks and Contemporary Practices in Nepal

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  • Rajesh Bastola
Rajesh Bastola
Advocate, Nepal Bar Council
DOI: https://doi.org/10.46985/kslr.v12i1.2228

Published 2024-07-26

Keywords

  • Arbitration, Recognition and Enforcement of Award, Judicial Discourse, Dispute Resolution

How to Cite

Bastola, R. (2024). The Juridical Canvas of Recognizing and Enforcing Arbitral Awards: A Deconstruction of Legal Frameworks and Contemporary Practices in Nepal. Kathmandu School of Law Review, 12(1), 154–163. https://doi.org/10.46985/kslr.v12i1.2228
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Abstract

Arbitration is one of the methods of dispute resolution mechanisms where disputes are resolved outside the formal court structure by persons appointed by the disputing parties. The person so appointed renders an order generally known as an award which is binding to the parties to the dispute. In other words, it is considered one of the alternative dispute resolution methods. The importance of any legal proceedings is not limited to the rendering judgment or award. Rather the crux of any proceeding depends on the recognition and enforcement of award as well. Arbitration as a process of dispute resolution mechanism depends on the competency of the process to render the award. The mere rendering of the award does not suffice the fundamental objectives of justice. Rather the recognition and enforcement of the award is the fundamental requirement to uphold the sanctity, effectiveness and efficiency of any arbitration proceeding. Against the backdrop, the paper aims to critically examine the existing legal provisions for the recognition and enforcement of awards as well as the judicial discourse is examined via the examination of the judgment of the Supreme Court’s recent trends in the recognition and enforcement of awards. Lastly, this paper presents the way out for the future but based on the best practices around the world.

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References

  1. Stephan Balthasar, International Commercial Arbitration, Wilhelmstrabe Germany, 2016, p. 5.
  2. Kenneth S. Carlston, Theory of Arbitration Process, Law and Contemporary Problem, Duke University School of Law, 1952, p.631.
  3. Collins v. Collins, England & Wales, 1858, 53 E.R . 4 Carlston (n 3).
  4. Mauro Rubino-Sammartano, International Arbitration Law and Practice, The Hague: Kluwer Law International, 2001, p.1.
  5. Edgar L. Warren and Irving Bernstein, ‘The Arbitration Process’, Southern Economic Journal, volume. 17: No.1 1950 p. 16. Further, the article provides for the successful arbitration which requires to understand the process and participate in arbitration with skill and restraint, agreement on arbitrability, determination of the procedure, Selection of the arbitrators by the parties, properly prepared presentations and not to expect the impossible of the arbitration. Please see pg. 29 and 30 for further reference.
  6. S.K. Chawala, Law of Arbitration and Conciliation Practice and Procedure, Eastern Law House, 2nd ed. 2004, p. 57. Also see, Arbitration and Conciliation Act, 1996 (Act No. 26 of 1996). ‘arbitration’ means any arbitration whether or not administered by permanent arbitral institutions. The UNCITRAL Model Law on International Commercial Arbitration also define in the similar manner. However, Arbitration Act 2055 is silent in relation to the definition of the term agreement. For the sake of clarity also it is fundamental to adopt the definition of the term arbitration since we are doing arbitration in the absence of the any clarity of the term arbitration. It must be subject matter of the amendment in the days to come. Prima facie there is absence of any kind of interpretation from the Hon. Supreme Court of Nepal as well in that regard. And it is a legitimate in that regard as well.
  7. Bhanu Prasad Acharya v. Damodhar Ropeway and Construction Company et. al., NKP 2067 (2011), volume 5, Decision no. 8368.
  8. Rakesh Kumar v. Ram Krishna Rawal, NKP 2066 (2010), volume 2, Decision no. 8078.
  9. Advocate Jyoti Baniya et. al. v. Hotel Association Nepal et. al., NKP 2064 (2008), volume 11, Decision no. 7904.
  10. Bryan A. Garner, Black’s Law Dictionary, Thomson West , 2004, 8th Edition, p. 147.
  11. Ray Turner, Arbitration Awards a Practical Approach, Blackwell Publishing, 2005, p. 3.
  12. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958, New York, art. 1(2).
  13. Arbitration Act 1999. However, the act consists of the provisions about the bindingness of the award, implementation of the award. The act fails to succinctly exhibits the contents and contours of the term award. See; The Arbitration and Conciliation Act 1996 of India, s. 2 (c) define the arbitral award includes an interim award.
  14. Turner (n 13), p. 4.
  15. Ibid.
  16. Istvan Szaszy, Recognition and Enforcement of Foreign Arbitral Awards, American Journal of Comparative Law, volume 14: no. 4, 1965 p. 658.
  17. Arbitration Act 1999, s. 32.
  18. Arbitration and Conciliation Act of India 1996, Section 36 for more details.
  19. Ibid., s. 36(1).
  20. Anil Kumar Pokhrel v. Kathmandu District Court, NKP 2067 (2010), volume 4, Decision no. 8437.
  21. The research paper is limited to the three-district court of Kathmandu valley namely Kathmandu, Lalitpur, and Bhaktapur respectively. Further, the data of last five fiscal year namely 2075/076, 2076/077, 2077/078, 2078/079, and 2079/080 respectively. Hence, the paper is limited to Kathmandu District Court, Lalitpur District Court, and Bhaktapur District Court respectively.
  22. Data as maintained in the Tashil Department of Kathmandu District Court.
  23. Data as maintained in the Tashil Department of Lalitpur District Court.
  24. Data as maintained in the Tashil Department of Bhaktapur District Court.
  25. Arbitration Act 1999 of Nepal, s. 34.
  26. Ibid, s. 34 (1) for the necessary documents for the implementation of the award taken in the foreign country.
  27. Ibid, s. 34 (2) for the necessary circumstances in the case of the recognition and enforcement of foreign arbitral awards based on the treaty between Nepal and Other contracting parties.
  28. Ramona Martinez, Recognition and Enforcement of International Arbitral Awards under the United Nations Convention of 1958: The Refusal Provisions, International Lawyer, volume 5: no. 2, 1990, p. 488.
  29. Scherk v. Alberto-Culver Co., US Supreme Court, 1974, 417 U.S. 506 .
  30. Advocate Devendra Pradhan on be behalf of Hanil Engineering and Construction Co. Ltd registered office on 832-2 Yuksan-dong Kangnam-ku, Seoul, Korea Vs. Appel Court Patan et. al., NKP 2075 (2019), volume 11, Decision no. 10138.
  31. Dr. Puskar Raj Pandey v. Sabeena Pandey, NKP 2068 (2011), volume 3, Decision no. 8572.
  32. Rajesh Bastola, Nepal is Ignoring Necessary Arbitration at its Own Risk, The Kathmandu Post,11 November 2019, available at https://kathmandupost.com/columns/2019/11/11/nepal-is-ignoring-a-necessary-international-arbitration-at-its-own-risk a ccessed on 20 August 2023, Sunday .
  33. Axiata Investments (UK) Limited and Ncell Private Limited v. Federal Democratic Republic of Nepal, ICSID Case No. ARB/19/15.
  34. Agreement between the Government of United Kingdom of Great Britain and Norther Ireland and His Majesty’s Government of Nepal for the Promotion and Protection of Investments, 2 March 1993, U.K-Nep, available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/2064/download accessed on 21 August 2023, Monday .
  35. International Center for Settlement of Investment Disputes World Bank Group, available at https://icsid.worldbank.org/ cases/concluded, a ccessed on 20 August 2023, Sunday .
  36. Treaty Act 1947, s. 9 states treaty provisions enforceable as good as laws.
  37. Rajesh Bastola, Two-Tiered Arbitration in Nepal, Nepal Bar Council Law Journal, 2020, pp. 519-534.
  38. Rajesh Bastola, Subject Matter of Arbitrability with Special Reference to Nepal, Nepal Bar Council Law Journal , 2018, pp. 463-471.
  39. Oliver Wandel Holmes, The Path of the Law, Harvard Law Review, volume 10, 1897, p. 457.
  40. Chandra Kumar Golcha v. Appellate Court Patan et. al., 2062 (2005), volume 3, Decision no. 7516.
  41. The recent data provided for the pending number of the fine and punishment as provided in Supreme Court Judgment Execution Directorate, available at https://supremecourt.gov.np/scjed/, accessed on 15 December 2023 .
  42. The analysis of the presented above of Kathmandu District Court, Bhaktapur District Court, and Lalitpur District Court reflects encouraging number of applications filled for execution of the award but its gloomy as far as execution part is concerned. Hence, the proactiveness of the part of the judiciary is must to uphold the sanctity and public trust in arbitration as a method of the dispute resolution.

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