Expedited or Fast-Track Arbitration in Nepal

Nepal introduced expedited arbitration to the  Arbitration Act 1999 (2055) (Arbitration Actor Act),which is called as “fast track arbitration”, added by the Act to Amend Certain Nepal Acts relating to Improvement of the Economic and Business Environment and Enhancement of Investment, 2025 (2081), which was authenticated on 31 march 2025. The amendment introduced a new Section 13A in arbitration Act, which allows  Parties to agree to fast-track arbitration , and an amended Section 32 requires a District Court to enforce a fast-track award within 15 days, against 30 days for ordinary awards. This article explains about the fast-track mechanism and its place in the arbitral process, weighs advantages and disadvantages, and identifies reforms still needed. 

2.1. Fast-track Arbitration: 

Prior to the 2025 amendment, the Arbitration Act, 1999 (2055) contained no provision recognizing fast-track arbitration. The newly introduced Section 13A of the Act provides a statutory basis for fast-track arbitration, allowing parties to resolve disputes through such proceedings in accordance with the terms prescribed by their contract or agreement.

2.2. Procedural Expedition

The existing procedural framework under the Arbitration Act, 1999 (2055) also contains several provisions that support the objectives of expedited arbitration. Section 14 of the Act contributes to procedural expedition by prescribing defined periods for the submission of claims, defenses, counterclaims, and rejoinders. These statutory time limits help reduce unnecessary procedural delays and establish a structured timetable for the exchange of pleadings. Similarly, Section 17 of the Act provides the procedural flexibility necessary for efficient arbitral proceedings by giving primacy to the procedure agreed upon by the parties and permitting the arbitrator to determine procedural matters not expressly addressed by the Act. This flexibility enables the tribunal to adopt appropriate measures to avoid unnecessary delay, subject to the parties’ agreement and the requirements of fairness and natural justice.

The efficiency of the proceedings is further supported by Section 17(2), which requires the arbitrator to commence the arbitration immediately after receiving the necessary pleadings, thereby minimizing unnecessary inactivity between the completion of pleadings and commencement of the proceedings. Section 17(5) further safeguards the continuity of the arbitral process by allowing the tribunal, where proper notice has been given, to proceed on the basis of the evidence available despite the non-appearance of a party. This prevents a party from frustrating the proceedings through deliberate non-appearance. In addition, Section 17(6) establishes a procedural cut-off following the conclusion of the hearing by restricting the introduction of further evidence or subsequent hearings after the proceedings have been formally closed. This promotes procedural finality and limits opportunities for unnecessary prolongation. Section 17(7) complements these provisions by requiring the arbitrator to pronounce the written decision within 30 days from the order declaring the hearing concluded, thereby placing a statutory limit on the period between the conclusion of the hearing and issuance of the decision. Collectively, these provisions provide a procedural framework that can facilitate the efficient conduct of arbitration and complement the statutory mechanism for fast-track arbitration.

2.3. Expedited Enforcement 

The objective of expeditious dispute resolution is further reflected in the enforcement framework. Section 31 requires a domestic arbitral award to be voluntarily implemented within 45 days of its receipt. Where the award is not voluntarily implemented within that period, the successful party may seek enforcement through the District Court within the prescribed period. The amended Section 32 further differentiates the enforcement timeline according to the nature of the award, requiring the District Court to enforce a fast-track award as its own judgment within 15 days, while providing a 30-day period for other awards. By reducing the time required for enforcement of fast-track awards, this framework extends the principle of expedition beyond the arbitral proceedings themselves and seeks to ensure that the benefit of a faster determination is not substantially undermined at the enforcement stage.

Although the statutory framework for expedited arbitration in Nepal remains relatively limited, arbitration institutions have begun incorporating expedited procedures into their institutional rules. This represents a progressive step toward providing parties with a faster and more efficient mechanism for resolving disputes, particularly where the value of the dispute is relatively small or the circumstances require urgent resolution. One notable example is the Dispute Resolution Center Nepal (DRCN), which has expressly incorporated an expedited arbitration mechanism into its Rules of Arbitration.

The Dispute Resolution Center Nepal (DRCN) Rules of Arbitration provide a specific framework for expedited arbitration under Article 5. A party may apply for the Expedited Procedure before the constitution of the tribunal where:

• The amount in dispute does not exceed NPR 50,00,000;

• The parties agree to the expedited procedure, or 

• Exceptional urgency exists. 

The Executive Committee determines whether the Expedited Procedure should apply after considering the views of the parties and the circumstances of the case.

Under Article 5.2, the procedure may include a bridged procedural time limits, appointment of a sole arbitrator, determination of the dispute on documentary evidence where appropriate, and a requirement that the final award be issued within six months of constitution of the tribunal, subject to extension in exceptional circumstances. Article 5.4 further permits the tribunal, after hearing the parties, to discontinue the Expedited Procedure if subsequent circumstances justify doing so.

Thus, Article 5 of the DRCN Rules provides a structured institutional mechanism for expedited arbitration in Nepal, balancing procedural efficiency with party autonomy and procedural fairness.

Faster Enforcement and Recovery

The 15-day enforcement period for fast-track awards helps parties recover their money more quickly after the award is issued. 

Practical Relevance to Nepal

Arbitration in Nepal is particularly significant in construction, infrastructure, hydropower and public procurement disputes. Faster enforcement may therefore be especially valuable where substantial commercial interests are involved.

Procedural Flexibility

Section 13A allows the parties greater scope to determine an expedited procedure. Depending on the arbitration agreement, parties may incorporate institutional or UNCITRAL expedited procedures.

Time and Cost Efficiency

Expedited arbitration can reduce procedural delays, hearings and related costs while maintaining the essential features of arbitration.

Challenges in the Enforcement of Arbitral Awards

Although the law aims to ensure faster enforcement of arbitral awards, practical difficulties may still delay the actual recovery of money. Court applications, objections raised by the losing party and other enforcement-related obstacles may prevent the timely implementation of an award.

Lack of a Clear Regulatory and Institutional Framework

Section 13A provides a legal basis for expedited arbitration, but the effectiveness of the procedure also depends on clear procedural rules and adequate institutional support. In the absence of detailed guidelines and effective implementation mechanisms, parties may face uncertainty regarding the applicable procedure and time limits, limiting the practical effectiveness of expedited arbitration.

Difference between Domestic and Foreign Awards

The accelerated enforcement mechanism available for domestic arbitral awards does not necessarily apply in the same manner to foreign awards. Differences in the applicable legal procedures may result in variations in the time and process required to enforce domestic and foreign awards.

Implementation Challenges

Legislative reform alone may not eliminate practical delays in enforcement. Disputes involving government entities or public bodies may continue to face administrative difficulties and judicial obstacles. Therefore, effective implementation remains essential to achieving the intended benefits of expedited arbitration.

Balancing Speed with Due Process

Expedited arbitration must ensure that speed does not compromise fairness. Parties must have a reasonable opportunity to present their arguments, submit evidence and respond to the other party's claims. If proceedings are compressed excessively, concerns regarding procedural fairness may arise and potentially provide grounds for challenging the award.

Judicial Capacity and Efficiency

The success of expedited arbitration depends not only on the efficiency of the arbitral proceedings but also on the ability of courts to handle enforcement applications and related challenges promptly. If court proceedings become unnecessarily prolonged, the benefits of a faster arbitral process may be reduced.

Expedited arbitration under Section 13A of Nepal’s Arbitration Act provides an important opportunity to make dispute resolution more efficient by reducing procedural delays and facilitating faster enforcement of arbitral awards. Its benefits are particularly relevant to commercial disputes where time, cost and certainty are essential. However, the effectiveness of this framework cannot be measured by statutory time limits alone. It also depends on the availability of clear procedural rules, consistent judicial approaches and effective implementation of arbitral awards in practice.

Strengthening the existing framework through targeted legal and institutional reforms is therefore essential to bridge the gap between legislative intent and practical outcomes. 

Date of Publication: 9th October 2026 

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