Section 18
Substantive Law To Be Followed By Arbitrators
(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.