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Magnus Stålmarker


A.1 Legislation

Sweden has a long tradition of arbitration and as a preferred venue for international arbitration. Arbitrations in Sweden are governed by the Swedish Arbitration Act of 1999 (Sw: Lag (1999:116) om skiljeförfarande) which applies to both domestic and international arbitrations in Sweden.

On 1 March 2019, the revised Swedish Arbitration Act (SAA) entered into force. The legislative revisions to the SAA introduced a number of changes that essentially aims to enhance, modernize and simplify the arbitration procedure.

The SAA includes a few mandatory requirements for the parties and is generally based on party autonomy, allowing the parties themselves to decide on the arbitration procedure. The parties are free to agree on matters not governed by the SAA. The revisions to the SAA also introduce a more accessible process for foreign parties and applies to arbitrations commenced from 1 March 2019.

While Sweden has not adopted the UNCITRAL Model Law, the SAA contains few material differences from the UNCITRAL Model Law.

Some of the key amendments to the SAA are set out below.

A.1.1   Multi-party arbitrations

The SAA provides that if arbitration is commenced against two or more respondents and the parties cannot agree on the appointment of an arbitrator, the latter should be appointed by the District Court. If a respondent has already appointed an arbitrator, the latter shall be released.

A.1.2   Consolidation of two or more arbitrations into single arbitration proceedings

The revised SAA provides that two or more arbitration proceedings may be consolidated if: (i) the same arbitrators are appointed in all proceedings; (ii) the arbitrators decide that consolidation is beneficial to the arbitrations and (iii) the parties do not object to the consolidation.

A.1.3   Determination of the applicable substantive law by the arbitral tribunal in case of absence of an agreement between the parties

The revised SAA allows the arbitrators to determine the applicable substantive law in the absence of a party agreement. The SAA does not regulate on which grounds the arbitrators shall make such a determination. If the parties have so agreed, the arbitral tribunal shall decide the dispute ex aequo et bono.

A.1.4   The excess of mandate ground for challenging an award is revised to require that the excess of mandate must have affected the outcome of the dispute

The revised SAA introduces a provision, requiring the party challenging an award on the grounds of excess of mandate to prove that the outcome of the dispute has been affected by the excess of mandate.

A.1.5   Shorter term for setting aside the arbitral award

The revised SAA will reduce the timeline for applications to set aside an arbitral award from three months to two months from the date when the party received the award.

A.1.6   Independence of the arbitrators

Emphasis is placed on the independence of the arbitrators. The current SAA only requires the arbitrators to be impartial. The amendments have extended the arbitrator to be not only impartial but also independent.

A.1.7   The possibility to appeal an Appeal Court’s decision to the Supreme Court requires leave to appeal

The revised SAA introduces a leave to appeal requirement if a party wishes to appeal the Appeal Court’s decision on challenge. This enables the Supreme Court to limit its examination to issue(s) of precedential value.

A.2 Institutions, Rules and Infrastructure

The Arbitration Institute of the Stockholm Chamber of Commerce (“SCC Institute”) maintains a strong position as the largest arbitration institute in Sweden as well as one of the leading forums for international commercial and investment arbitration in the world. The SCC Arbitration Rules (“SCC Rules”) are some of the most commonly used set of arbitration rules for the administration of investment disputes.

In 2018, the SCC registered 152 new cases. While the number of disputes referred to the SCC decreased somewhat in 2018, the calculated value in dispute for the cases commenced in 2018 was reportedly at an all-time high.

The revisions of the SCC Rules in 2017 have accommodated for summary procedures, multi-party and multi-contract disputes as well as for expedited arbitrations. The SCC Rules offer proceedings under the ordinary SCC Rules and the separate SCC Institute’s Rules for Expedited Arbitration. The focus is placed on efficiency and cost-effective procedures on both the parties and the tribunal.

In September 2019, the SCC launched its digital platform (“SCC Platform”) for communication and file-sharing between the parties, the tribunal and the SCC. Submissions, procedural orders, communication to and from the SCC and exhibits are now communicated through the SCC Platform. The platform aims to further improve user-friendliness, efficiency and the communication between the parties and the tribunal throughout the proceedings.


B.1 Challenge of arbitral award – about, inter alia, the starting point of the court’s view when reviewing a tribunal’s decision and the significance of a procedural error (NJA 2019 s. 171)[1]

The questions argued and decided in the Supreme Court were:

  • Whether the arbitral tribunal had decided on an issue that was not covered by the arbitration clause.
  • Whether the tribunal had exceeded its mandate or committed a procedural error by not reviewing a disputed circumstance.
  • If the tribunal had committed a procedural error by not giving a party the opportunity to sufficiently argue its case, and
  • If the tribunal had committed a procedural error by giving an arbitral award, which was not based on the invoked evidence.

The case concerned a construction contract between a Belarusian and a Turkish company. The main construction contract included an arbitration clause, however, additional works were completed under five separate additional contracts with reference to state court as a dispute resolution forum. The arbitral tribunal had found that even though the additional contracts gave the parties the right to petition the economic court of Minsk as a dispute resolution forum, it did not exclude jurisdiction of the arbitral tribunal under the main contract. In the tribunal’s view, the additional works were performed within the contractual framework between the parties established by the main contract. In its evaluation, the tribunal noted that the parties must be assumed to have intended disputes to be resolved quickly and in the same forum. Since the parties had chosen arbitration in the main contract, it was deemed to be most in line with the parties’ joint and common intention.

The Supreme Court stated that when reviewing a tribunal’s decision on jurisdiction, regard should be made to the fact that it is typically the tribunal who is best positioned to determine the issue, and that the starting point for the court’s review should be that the tribunal’s interpretation and evaluation of evidence are correct. The court should, therefore, review whether the challenging party had established that the tribunal had made an incorrect assessment of the scope of the arbitration agreement. The court found that the challenging party (the Belarusian company) had not brought such grounds that the tribunal’s interpretation of the parties’ agreement on dispute resolution could be rejected.

The challenging party also argued that the tribunal incorrectly assumed that the parties agreed on the estimation of interest and that the tribunal, therefore, had exceeded its mandate or committed a procedural error by not reviewing a disputed circumstance. The Supreme Court found that the action of the tribunal constituted a procedural error. However, the Supreme Court rejected the action concerning this issue arguing that the procedural error’s effect on the outcome of the arbitral award concerning the interest could not have been of any reasonable significance to the challenging party.

As to the claim that the tribunal had committed a procedural error by not giving a party the opportunity to sufficiently argue its case, the Supreme Court stated that the challenging party had failed to establish that the tribunal’s dealing with the proceedings and the tribunal’s assessment of the reasons presented by the party when requesting an extension of time was indefensible.

As to the claim that the tribunal had committed a procedural error by giving an arbitral award, which was not based on the invoked evidence, the Supreme Court found that the tribunal’s assessment of questions of burden of proof and evidentiary thresholds form part of the review of the merits. Even if the tribunal had committed an error in any of these respects, it would not constitute an excess of the mandate, nor a procedural error.

B.2 Challenge of arbitral award – question whether a procedural error had likely affected the outcome of the case (NJA 2019 s 382) [2]

The case concerned a royalty clause in a license contract between a German and a Swedish company. The tribunal had issued a procedural order that included a position on the interpretation of the royalty clause in the parties’ agreement. The procedural order also contained an undertaking that the tribunal would not deviate from the interpretation without first informing the parties and give them the opportunity to issue their opinion. However, in a partial award rendered nearly two years later, the tribunal found that the royalties under the agreement were to be based on factors other than what it had stated in the procedural order, without first informing the parties about the deviation from its earlier interpretation.

The challenging party claimed that the tribunal had committed a procedural error by deviating from its position in the procedural order without informing the parties and providing them with the opportunity to further argue its case. The Court of Appeal agreed with the challenging party and set aside the award partially.

The Supreme Court upheld the judgment of the Court of Appeal with the conclusion that the procedural error had likely, without the challenging party (the counterparty in the Supreme Court appeal case) causing the error, affected the outcome of the case. The conduct of the proceedings meant that the arbitral tribunal had determined a question that could be presumed to have been finally determined which, according to the court, meant that important principles of legal security were neglected. This, together with the fact that the challenging party would have further argued its case knowing that the issue was going to be re-examined by the arbitral tribunal, gave the court reasons to presume that the error had affected the outcome of the case.

B.3 Validity etc., relating to arbitral awards – about, inter alia, arbitration clauses’ compatibility with EU law and Swedish ordre public[3]

The case concerned a damage claim between a Luxembourg company and the Republic of Poland. The arbitral tribunal first issued a separate arbitral award determining that Poland had violated its obligations under an intra-EU investment treaty between Poland, Luxembourg and Belgium by expropriating the Luxembourg company’s shareholdings in a Polish bank, and subsequently, the company was entitled to damages. In the tribunal’s final award, the amount of the damages was determined. The awards were challenged by Poland and the challenged cases were heard together by the Svea Court of Appeal. Primarily, the Luxembourg company requested the court to declare both awards invalid, secondly, to set aside the awards in their entirety, and thirdly, to set aside the awards partially.

The court of appeal concluded that the arbitral awards were not invalid, since the dispute which the arbitral awards concerned was arbitrable, and neither the arbitral awards nor the manner in which they arose was incompatible with Swedish ordre public. Poland had argued that the dispute was not arbitrable since the investment treaty did not provide any possibility to request a preliminary ruling by the CJEU, and therefore undermined the autonomy of EU law. The arbitration clause was in conflict as well with the foundation of the EU legal system and the Swedish legal system. Arbitral awards based on such an arbitration clause were subsequently manifestly incompatible with the foundation of the legal system (ordre public) according to Poland. The Eco Swiss case (Case no C-126/97), the Mostaza Claro case (Case no C‑168/05) and the Achmea case (Case no C 284/16) were outlined and compared in the judgment of the court of appeal.

The court further concluded that the arbitral awards should not be set aside on the grounds that they were not covered by a valid arbitration agreement between the parties, as Poland did not raise any objection in this regard within in due time of the proceedings. However, the court concluded that a minor part of the final arbitral award about interest should be set aside as the arbitral tribunal made an addition to the separate arbitral award too late. The tribunal, therefore, exceeded its mandate to this extent. The court also found that the arbitral tribunal committed a procedural error. The error meant that the tribunal, without first communicating with the parties, issued a separate arbitral award. Since Poland did not make it probable that the error affected the outcome of the case, the arbitral awards were not set aside by the court.

The awards were, subsequently, upheld regarding the damages Poland was obligated by the tribunal to pay the Luxembourg company but a certain part of what was awarded in interest was set aside. The court noted that the case involved issues for which it is important to the uniform application of law that an appeal can be reviewed by the Supreme Court and therefore allowed the judgment to be appealed. The judgment has been appealed.[4]

B.4 Challenge of arbitral award – questions of excess of mandate and procedural errors[5]

The case concerned two contracts regarding the supply and transit of natural gas between a Russian and Ukrainian company. The arbitral tribunal issued three awards. All three awards were challenged by the Russian party. The judgment of the Court of Appeal concerned the separate award rendered under the supply agreement.

The separate award included a decision on, inter alia, certain issues relevant to whether any contractual provision should be declared invalid and whether payments could be based on a Take-or-Pay provision. The challenging party (the Russian company) argued that the tribunal had committed several procedural errors and that the arbitral tribunal had exceeded its mandate in its assessment of the parties’ requests. i.e. that the tribunal had gone beyond the scope of the proceeding, that the tribunal failed to provide substantive guidance of the proceeding, and finally that the tribunal had failed to provide complete grounds when rendering the award.

The Court of Appeal concluded that it had not been established that any excess of mandate or procedural error had occurred during the arbitration, and therefore rejected the challenge in its entirety. The court did not grant leave to appeal as the case did not involve issues of importance for the development of case-law. Final hearings in the two remaining cases[6] will most likely take place during 2020.

[1] Judgement of the Supreme Court, 20 March 2019, Case no. T 5437-17 (NJA 2019 s. 171).

[2] Judgement of the Supreme Court, 30 April 2019, Case no. T 796-18 (NJA 2019 s. 382).

[3] Judgement of the Svea Court of Appeal, 22 February 2019, Case no. T 8538-17 and T 12033-17.

[4] Case no. T 1569-19.

[5] Judgement of the Svea Court of Appeal, 27 November 2019, Case no. T 10191-17.

[6] Case no T 2826-18 and T 3250-18.


Magnus Stålmarker is a senior associate and part of the Arbitration & Litigation Department in Baker McKenzie's Stockholm office. He graduated from the University of Gothenburg in 2002. He clerked at the District Court of Gothenburg and served in the Svea Court of Appeal from 2002 to 2007. He joined Baker McKenzie in March 2007. Magnus focuses on dispute resolution in the fields of international commercial arbitration and litigation, procurement and construction.