Arbitration in Sweden

MANY standard contract forms in shipping refer to arbitration in London, and to English law as governing law. However, in our view, arbitration in Sweden and Swedish law is an equally good alternative. Sweden is a frequently chosen venue for international arbitration, e.g. under the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce or under the Swedish Arbitration Act.

Arbitrability

Under Swedish law, the parties may agree that any dispute, present or future, of which they may freely dispose, shall be settled by arbitration. Most matters within the field of shipping and maritime law are arbitrable under Swedish law.

The arbitration agreement

The arbitration agreement requires no specific form. However, in disputes concerning carriage of general cargo, an arbitration agreement entered into before the occurrence of the dispute must be in writing in order to be valid (see Chapter 13, Section 61 of the Swedish Maritime Code).

Swedish law upholds the principles of separability and Kompetentz-Kompetentz. Consequently, the validity of an arbitration agreement is not affected by the invalidity of the main contract. Moreover, the arbitrators may determine their own authority, although a court may supersede any decision by the arbitrators on their jurisdiction.

A valid arbitration agreement precludes a party from going to court, provided that the other party invokes the arbitration agreement in its first brief or appearance in the case.

The procedural rules

Swedish arbitration law emphasises the autonomy of the parties. Thus, the parties are free to agree on the procedural rules to be applied. In the absence of an agreement, the arbitrators will apply the procedural rules of the Swedish Arbitration Act. The parties are expected to present their case, the facts and the law, and to determine which evidence they wish to rely on. In practice, a party is allowed to rely on almost anything as long as the evidence in question is deemed to be important to the case. The tribunal, in its discretion, may then freely evaluate the evidence presented by the parties.

Documentary production/discovery

The arbitral tribunal may, at the request of a party, ask the opposing party or a third party to produce certain documents. This decision is not enforceable in Sweden. However, if necessary, recourse can be had to the courts for an enforceable order. In the absence of any other agreement of the parties, the arbitrators are likely to apply, by analogy, the rules on production of documents in the Swedish procedural code (SPC). Under the SPC, production of documents may only be ordered for sufficiently identified documents that may be of importance as evidence in the proceedings. The same principles would probably also be upheld by arbitrators, leaving little room for the more extensive discovery known in common law countries, especially in the United States.

The award

Swedish law distinguishes between two types of defects in an award that make it unenforceable or ineffective. An award is deemed invalid without any action necessary by any of the parties, and irrespective of the time lapsed after the award if and to the extent the award concerns an issue that is non-arbitrable according to Swedish law, or is contrary to Swedish ordre public. An award may also be challenged and set aside if and to the extent the award is not covered by a valid arbitration agreement, if there are grounds for disqualification of an arbitrator, or if there have been procedural irregularities that probably influenced the outcome of the case.

Actions on the invalidity or challenge of an award shall be brought before the Court of Appeal having jurisdiction over the geographical area in which the award was made. Non-Swedish parties may in commercial matters agree to limit or exclude the right to challenge an award, but not the right to attack an invalid award.

A Swedish award is immediately enforceable in Sweden. As regards enforcement abroad, Sweden is, without any reservations, a party to the New York Convention. Thus, a Swedish award will be enforceable subject to the conditions laid down in that convention in a state that is a party to the New York Convention. If sought in a state that is not a party to the New York Convention, enforcement is, on the other hand, likely to be refused.

A foreign award is not enforceable in Sweden before it has been confirmed by the Court of Appeal. The grounds for refusing such a confirmation are by and large identical to those of the New York Convention.