The Supreme Court

Joint Branch

Honourable justice minister Hari Krishna Karki

Honourable Justice Minister Tank B. Moktan

Order

067-WO-0419

Case – Appropriate order to be booked including mandamus and certiorari to be issued.

Advocate Devendra Pradhan. On behalf of representatives and associates, 37-9 gaurab
marga maitighar, pox box numbers, 1185 having the authority to represent hanil
engineering and construction co ltd. with its registered office in 832-2 Yuksa- dong
k………………….ku-soul big register in korea. …………………………Applicant.

The appellate court patan……………………………………………………………………….1

coneco pvt. ltd pox box no. 1010 Minbhawan, Kathmandu, incorporated under the
company act…………………….defendant

The supreme court and indorsed the decision of the appellate court patan on the
following basis:

1. It was found that the joint contract was concluded and given to conico pvt.
Registered in Nepal on behalf of the construction of melamchi ADIT Roads
proposed by melamchi drinking water development committee to complete it
within 2061/04/01 on for amount Rs. 43,33,73,045 in spite of several reminders
the conico pvt. ltd receiving the construction board from the joint contract which
has failed to start the work and the melamchi drinking water development
 committee confiscated the same of US dollar $1,743,296 and Nepali
Rs.13,36,23,638 to be deposited as guarantee and advance payment for the
performance bond. Similarly, Rs.20, 00,289.45 paid by the company to issue the
performance bond by the bank and the five percent of the payment amount of
American dollars $12,661, in others words Nepali rupees Rs. 9,71,078.85 in total
American dollars $1,758,578 equivalent to Nepali rupees Rs. 13,47,95,003.70 and
Korean bond was the loss born by the company, as such applicant had given the
application to get compensated by solving the dispute according to the laws of
Korea. In the Korean commercial arbitration board located in Korea the Korean
commercial arbitration board was found to have decided to provided
compensation form the defendant Conica pvt ltd. The total amount of Korean
bond US 2,074,000,000 US Dollars and the annual interest 6% for the amount
from 2007 October 3 (2064-06-16) as compensation on July 20/2009 2066/04/05)
in the petition submitted to the appellate court by the applicant. It was found
that the appellate court had decided to put the application in the records by
declaring that it could not be implemented. it has been found that applicant has
been filed the submission in the court demanding the order of mandamus to
implement the decision of Korean commercial arbitration board saying that these
is a flaw of jurisdiction in the decision of the appellate court.
2. There is no demand from any other agreement done for it as there is no provision
in the regulation of the dispute as the contract itself is done by the company. It
has succeded in getting the decision done by the Korean arbitration board. The
opportunity for hearing was denied to the company according to the decision of
the applicate court and as such it could not be implemented the decision of the
applicate court being in consonance with the law. The case has been submitted
before the bancy today to declare the write petition as invalid because the
decision made day the court is according appliate to the law.
3. It is necessary to analyse the mediation act of Nepal and the provision of
providing acceptance the decision of the arbitration and its implementation
together with the international treaty provisions to arrive at a decision. In this
regards,
The United Nations convention, the recognition and enforcement of the foreign
arbitral awards (New York Convention) 1958 are in practices to provide
recognition to the decision of arbitration done in a foreign country as Nepal and
Korea are both parties to this convention. It is also necessary to explain whether
the decision made in aftergine countries can be accepted as can be denied
recognition on the basis of the explanation of the Nepal mediation act and the
New York convention. The conditions in which a country can deny the decision of
arbitration done in a foreign country has been elaborated in the article of the
united nations convention on the recognition end enforcement of foreign arbitral
awards (New York Convention) 1958 in Article v.1B it is stated that the party
against whom the award is invoked was not given proper notice of the
appointment of the arbitrator or the arbitration proceedings as was otherwise
unable to present his case Article v.1d the composition of the arbitral authority of
the arbitral procedure was not in accordance with the agreement of the parties
as falling such agreement was not in accordance with the law of the country
whereas Nepal and korea are both parties to this convention is necessary to
provide recognition to the arbitration delusion done is a foreign country . It is
also necessary to explain whether the decision made in a foreign countries can be
accepted or can be denied recognition on the basis of the explanation of the
Nepal mediation act and the New York convention. The conditions in which a
country can deny the decision of arbitration done in a foreign country has been
elaborated in article v of the united nations convention on the recognition and
enforcement of foreign arbitral awards (new York convention) , 1958 party
against whom the award is invoked was not given proper notice of the
appointment of the arbitrator or of the arbitration proceedings or was otherwise
unable to present his case" article V.1.d "the composition of the arbitral authority
of the arbitral procedure was not in accordance with the agreement of the
parties or falling such agreement was not in accordance with the law of the
country where it has succeeded in getting the decision done by the Korean
arbitration board the opportunity for hearing was denied to the company
according to the decision of the applicate court and as such it could not be
implemented the decision of the applicate court being in consonance with the
law, the case has been submitted before this banch today to declared the write
petition as invalid bearer the deusim made by the court is according appellate to
the law .

(2) Ot Os necessary to analyze the mediation act of Nepal and the provision of
providing acceptance to the decision of the arbitration and it's implementation
together with the international treaty provisions to arrive at a decision in this
regards.

The united nations convention on the recognition and enforcement of foreign

arbitral awards (New York Convention ) 1958) are in practices to provide
recognition to the decision of arbitration done in a foreign country arbitration
took place .

(3) On the basis of the facts of the case in review the above mention legal
provisions and aggreement the decision as to be reached on the basis of the
analysis of the following :-

(a) is it compatible as not to implement the decision of arbitration done in korea ?

(b) Whether the appointment of arbitrators has been made as not according to
the conditions of the application of the applicant ?

© Whether the process adopted for mediation is compatible with the aggreement
reached between the party or not ?

(d) Whether or not the opportunity for fair trial has been provided or not in the
content of the appointment of arbitrators and the process of arbitration?

(4) it is not necessary to analyze it further as the applicant can also take action for
the implementation of the decision of the arbitrator done in a forign country
according to section 34 (2) of the mediation act 2053 and both the countries
Nepal and korea are parties to the New York convention .

(5) Although it is mentioned that any dispute in course of the work shall be solve
by mutual mediation and the work is to be continued till the dispute is solve by
mediation is mention in section 7 of the agreement, it is not cleared where, how
and where the mediation is to be done according to which law and by whom is not
cleared and such simple condition to be mentions in the dispute settlement clause
are not mentioned in the agreement. The applicant as claim that the jurisdiction
has been provided on the basis of the provision of the section 10 agreement.
Inspite of being the main part of the original agreement, dispute resolution clause
is considered as a separate contract which is called the doctrion of ceberability to
kinds of results can be found by accepting the provision of mediation as Separate
according to this doctrine. At first the status of that original agreement shall not
influence the subject of mediation. Secondly, the governing law concerning
arbitration can be different from the governing law of the original agreement. it is
also accepted as a principle in international commercial arbitration
(6) In case of lack of cleared provisions by the parties it cannot be accepted that
the governing law is also applicable for the appointment of arbitrators and each
process it would be pertinent to quote the opinion of Dr. reinmer wolff in the
book commentary on new York convention for this subject there has been some
controversy.

(6) The principle of separability has been accepted by the Nepalese legal system in
section 16 (3) of the mediation act 2055, it is stated that if there is a provision of
the mediation in any contract for the purpose of taking a decision on the legality
or effectiveness of the contract and it is considered as the inseparable part of the
same contract the provision of mediation of the contract shall be considered as
the separate contract. In spite of decision of the mediation that such contract is
invalid or inacceptable or ineffective such provision shall not be considered as
invalid or inacceptable or ineffective by the same reason. The provision of the
Korean arbitration act 1999, ( 71 section ) is as follows :-

It cannot be considered as acceptable that the Korean law shall apply in relation to
the procedure of appointment of the arbitrator only on the basis of the words of
the contract in section to that is shall be govern by Korean law in relation to the
plea of the write applicant that Korean law shall be attracted to the appointment
of the mdeitors is not seen to be according to law. In the arbitration act of korea
sec 12(2) it is mention that the puries are free to agree on a procedure of
appointing the arbitrators. In this contract it is not cleared how the applicant
company submitted its claim to the Korean commercial arbitration on the basis of
the statement of the application and arbitration onaward. The right of
turisdication cannot be seen to have been provided to the voard eighter by
section 12(2) or any provision the provision of arbitrator is made in section 12 of
the act according which section 12(3) is a following
It we analyze in this way there are similarities in the Korean law also of the
provision of appointment of arbitrator in the Nepal mediation act. similarly in the
explanation provided for section 2(A) of the Nepal mediation act 2055 and
Korean arbitration act article 8, the letter’s telex message or fax or any other
communication medium of similar nature which can record reason message has
been included as a provision of written agreement for the solution of the dispute.
It has been found that no such message has been exchanged between the
parties. in this way the appointment of the arbitrator without the agreement of
the parties and the decision as such is contrary to the legal system korea of
Nepal.
So in this mediation act, it has not been found that official notice has been
provided of the defendant in the process of the work and appointment.
Reinforcing the right of fair trial of the defendant it cannot be excepted that the
condition section 34(2)(B) of the mediation act 2055 and article v.1.d of the New
York convention have been fulfill.
According to the analysis done above it has been found that appointment and
the procedure of the arbitrators done on the basis of the applications of the right
application in Korea was not compatible with the agreement between the parties
or according to the laws specified by the defendant has been deprived of the
right of solving the dispute by mutual consent according to the agreement
concluded between the parties.
The arbitrator has not been appointed according of the universally accepted fair
trial and the decision is seen to help made without providing official notice
without providing notice for the opportunities of representation of the defendant
in the process of action. The above condition shows that the fundamental and
condition for the implementation of the decision of the arbitrators foreign
country as specified in aprt anv of section 34(2) of the mediation act and article
V1B-VID on the convention on the recognition and enforcement of foreign
arbitral award.
Therefore it has been determined that the decision of the arbitrators cannot be
sent to the district court in writing according to the demand of the applicant and
as such it is not appropriate in invalidate date the decision of the appellate court
patan on 2066/12/17 and the order of mandamus and surcertoary bis issued to
implement decision. The decision as such is determine to be invalid the file
should be submitted by canceling the record.