The Svea Court of Appeal recently rejected City Säkerhet's motion to set aside an arbitral award. The judgment clarifies whether an arbitrator's application of a legal rule to which neither party referred in the arbitration may constitute grounds to challenge the arbitration award. The principle of jura novit curia (ie, the court knows the law), which is applicable in court proceedings, should also apply in Swedish arbitration unless otherwise agreed by the parties.
The Supreme Court recently allowed for court proceedings despite a valid arbitration agreement between the parties, because the legal grounds invoked by the claimant were outside the scope of the arbitration agreement. The court confirmed the doctrine of assertion and clarified the doctrine of connection.
The Svea Court of Appeal recently rejected the Republic of Kazakhstan's request to declare invalid or set aside the arbitral award in Stati v Kazakhstan. In the award, a group of foreign investors was awarded substantial damages following the state's seizure of certain assets. The judgment indicates that it is possible to declare an arbitral award based on false evidence invalid due to public policy, provided that it is proven that the outcome of the case was influenced.
Sweden's arbitration-friendly approach has led the Swedish courts to deny only rarely an application for the recognition and enforcement of a foreign award. It was therefore noted with interest when the Svea Court of Appeal denied enforcement of a foreign award due to matters of public policy in Finants Collect v Heino Kumpula.
Although arbitral tribunals have wide discretion to decide on the conduct of arbitral proceedings, it has frequently been debated whether a procedural order can reflect an agreement between the parties and, therefore, that the arbitral tribunal cannot amend such an order without exceeding its mandate or otherwise committing a procedural error. Two recent Svea Court of Appeal judgments have clarified these issues.
The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has prepared a draft of the revised SCC Rules and the revised SCC Expedited Rules. The new rules have been distributed to the arbitration community worldwide and several hearings have been held to discuss them. The rules will address certain recurring issues in international arbitration, including multi-party and multi-contract situations, security for costs and administrative secretaries.
In order to ensure that arbitration in Sweden can maintain its position as a modern, effective and attractive form of dispute resolution, and to further enhance Sweden's position as an international forum for trade and investment-related disputes, the government has appointed an investigator to review the Arbitration Act and propose any necessary amendments.
In a recent case the Supreme Court considered the significance of a failure to make an objection regarding the invalidity of the arbitration agreement during arbitral proceedings and instead first raising the objection in a subsequent challenge. The decision confirms that parties to arbitration cannot bring such challenges as a last-ditch effort if the arbitration does not turn out as they had hoped.
A recent Supreme Court decision considered the implications where an application is made for a court order for the production of documents within the context of arbitration. The court stated that guidance can be obtained from the 2010 International Bar Association Rules on the Taking of Evidence in International Arbitration even in the case of domestic arbitration.
Concorp Scandinavia AB brought an action in the district court against Karelkamen Confectionary AB. Karelkamen argued that Concorp's action should be dismissed, claiming that the dispute should be resolved by arbitration in accordance with the Arbitration Act. The district court denied Karelkamen's motion and the decision was appealed to the Supreme Court.
The Svea Court of Appeal recently considered whether an arbitral award should be set aside on the grounds of the disputed substantive agreement not being arbitrable under the Arbitration Act due to its alleged violation of then-mandatory Soviet law and being punishable under Soviet criminal law. The court took an arbitration-friendly approach to arbitrability in an international context.
The Supreme Court has considered what is required for a foreign arbitral award to be recognised and enforced in Sweden by applying the Swedish Arbitration Act, which goes back to the New York Convention of 1958. The court had to determine whether the respondents had been duly notified of the arbitration proceedings against them.
The Supreme Court recently handed down judgment in a case involving arbitrator bias. The issue was whether the disputed award should be set aside due to alleged bias in the proceedings, on the basis that the arbitrator had previously been appointed in several disputes in which a party was represented by counsel from a particular law firm.
The Stockholm Chamber of Commerce (SCC) has adopted an entirely new set of rules for the appointment of 'emergency arbitrators'. The rules should be analyzed by any party that has incorporated the SCC's dispute resolution provisions into an agreement, and parties already involved in a contentious matter would be well advised to attempt to anticipate whether the new rules are to the advantage of any of the parties.
In a recent case the Svea Court of Appeal determined what was required in order to avoid preclusion of the right to challenge. The judgment stressed the importance of being explicit when making an objection which is intended to constitute grounds for challenge.
Although shareholders are unable to include in the articles of association compulsory buy-out rules which deviate from those set forth in the Companies Act, there is nothing to prevent shareholders from contractually agreeing to refrain from exercising the compulsory buy-out provisions. This issue was recently considered by an arbitral tribunal.
If one party fails to provide its share of security for tribunal fees, the other may provide additional security in respect of that party's share. Whether the paying party may, before the final award, request a separate award requiring the other party to pay its share depends on whether the proceedings are ad hoc or are governed by the Arbitration Rules of the Stockholm Chamber of Commerce.
The Supreme Court has recently determined whether a party that has refused to provide its share of requested security for compensation to the arbitrators thereby forfeits its right to invoke the arbitration agreement as a bar to judicial proceedings only in the dispute to which the arbitration proceedings relate, or whether it forfeits its right in all disputes based on the arbitration agreement.
In most cases, the language to be used in an arbitral proceeding is not an issue discussed between the parties. Nevertheless, the language to be used in the arbitration can have a negative impact on party equality. Given the various circumstances to be considered, the nationality and language skills of the party-appointed arbitrator as well as the legal counsel will be relevant.
According to Article 36(1) of the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce, unless otherwise agreed by the parties, the arbitral tribunal shall state the reasons on which an award is based. However, what degree of reasoning is sufficient? This was one of the issues decided by the Svea Court of Appeal in Rapla Invest AB (in bankruptcy) v TNK Trade Limited.