Section 119: Settlement of dispute through arbitration

1) Where mediation does not succeed pursuant to Section 118, the dispute relating to the collective claims and demands shall, in the following circumstance, be settled through arbitration:

(a) If the collective bargaining committee and the employer agree to settle the dispute relating to collective claims, demands through arbitration,

(b) If a collective dispute arises in an enterprise providing essential services,

(c) If a collective dispute arises in an enterprise within the special economic zone, or

(d) If the strike is prohibited by the imposition of a state of emergency in accordance with the Constitution.

Explanation: For the purpose of this Chapter, the term “essential service” means any service which may, if interrupted, have an adverse impact on the life, health and safety of the people across the country or the people living in any part of the country.

2) Where the Ministry has ground to believe that a financial crisis may arise in the country as a result of ongoing or possible strike or lockout or that the dispute needs to be settled by arbitration, the Ministry may give an order for the settlement of any collective dispute through arbitration irrespective of the stage of such a dispute.

3) For the purpose of sub-sections (1) and (2), the Ministry may form an arbitration panel comprising representations from the labour, employer and Government of Nepal.

4) Expenses of the arbitration panel to be formed pursuant to sub-section (3) shall be borne by the Government of Nepal as prescribed.

5) Any party wishing to have the dispute settled through arbitration shall submit claims in writing to the arbitrator as prescribed.

6) On receipt of the claims referred to in sub-section (5), the arbitrator shall send a copy of such claims to the other party and provide an opportunity to such party to submit counter-claims in that respect.

7) In conducting the proceeding referred to in this Section, the arbitrator may consult or discuss with any expert.

8) A hearing shall be conducted at the date, time, and place specified by the arbitrator, and the arbitration proceeding shall not sojourn for the sole reason that no party has remained absent or the counter-claim has not been submitted.

9) The arbitrator shall make an award not later than thirty days from the date of completion of the hearing pursuant to sub-section (8).

10) The arbitrator may exercise such powers as the court has under the prevailing laws in relation to the matters, including examining the evidence, taking depositions of witnesses, and making on-site inspections in connection with the proceeding.

11) Except as otherwise provided for in the agreement by the parties, other provisions relating to the arbitral proceeding shall be as determined by the arbitrator.