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(1) The Nepal Law shall be the substantive law to be followed by the arbitrator,
except when, otherwise provided for in the agreement.
(2) The arbitrator may settle the dispute according to the principle of justice and
conscience (Ex aqua et bono) or natural justice (amiable compositor) only when
explicitly authorised by the parties to do so.
(3) Notwithstanding anything contained elsewhere in this act, the arbitrator shall
settle the dispute according to the conditions stipulated in the concerned
contract. While doing so, arbitrator shall also pay attention to the commercial
usages applicable to the concerned transaction.
Provided that the procedure not laid down in the Act shall be as prescribed by
the arbitrator with the consent of the parties, and in case the parties fail to reach
an agreement in that connection, it shall be as prescribed by the arbitrator
him/herself.
(2) The arbitrator shall start arbitration proceedings immediately after receiving
all such claims, objections, counterclaims or rejoinders as need to be received
by him/her.
(3) The arbitrator must inform the parties about the type of proceedings to be
held, and the day and time fixed for the purpose and also keep records thereof in
the concerned case file.