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National arbitration laws
What legislation applies to arbitration in your jurisdiction?
The Arbitration Act (SFS 1999:116) applies to both domestic and international arbitration. Some provisions in the Arbitration Act apply only to international disputes.
Institutional arbitrations seated in Sweden are often conducted pursuant to the Stockholm Chamber of Commerce (SCC) Arbitration Rules, which in many cases is a recommended option for parties seeking to conduct arbitral proceedings under institutional rules in Sweden. With respect to issues that are not regulated by the Arbitration Act, the SCC Rules in some respects contain provisions that, in practice, fill the gaps in relation to arbitration conducted under the rules.
Are there any mandatory laws?
The Arbitration Act applies to all arbitration proceedings conducted in Sweden. In general, the Arbitration Act allows parties to agree on the conduct of the proceedings, but there are a few mandatory rules to safeguard the interest of due process, including the following:
- The parties must be given the opportunity to present their respective cases, orally or in writing, in all necessary respects. This includes a right to review all documents and other materials pertaining to the dispute, which are supplied to the arbitrators by the opposing party or by another person.
- The parties cannot give the tribunal powers that are exclusively reserved to the courts, such as examination of witnesses under oath, imposition of fines or other compulsory measures in order to obtain requested evidence.
- The parties may not agree to exclude or restrict the rules governing invalid awards. However, non-Swedish parties may agree to waive in advance the applicability of the grounds for setting aside an award.
New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?
Yes, Sweden is a signatory to the New York Convention. The convention was ratified on January 28 1972.
Are there any reservations to the general obligations of the convention?
Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?
In addition to the New York Convention, Sweden is party to the following treaties and conventions:
- the Washington (International Centre for Settlement of Investment Disputes) Convention;
- the Energy Charter Treaty;
- the UN Convention on Transparency in Treaty-Based Investor-State Arbitration; and
- a large number of bilateral investment treaties with various countries worldwide.
Has your jurisdiction adopted the UNCITRAL Model Law?
Sweden has not adopted the UNCITRAL Model Law. However, the Arbitration Act is influenced by and largely compatible with it.
Are there any impending plans to reform the arbitration laws in your jurisdiction?
The Arbitration Act is currently under review. The government has assigned a committee to undertake a closer review of certain issues within the legislation.
In April 2015 the committee presented its report proposing several reforms to the Arbitration Act in order to make Swedish arbitration even more attractive – not just for Swedish parties, but also for foreign parties and arbitrators.
Several of the suggested revisions relate to challenges of arbitral awards in court. Some of them are designed to clarify and improve the procedure and include, for instance, that proceedings for setting aside awards may be conducted in English. Other revisions includes a modification of the grounds on which an award can be challenged. These revisions are likely to increase legal certainty.
Other suggested reforms include:
- introducing a provision stating how tribunals will determine what substantive law to apply in the absence of an agreement between the parties; and
- repealing the possibility to bring a positive or negative declaratory claim before a district court regarding the tribunal’s jurisdiction at any point during the arbitral proceedings.
The new legislation was supposed to enter into force on July 1 2016, but it will be delayed.
The Stockholm Chamber of Commerce (SCC) Arbitration Rules are also undergoing a revision and the new rules are expected to come into force in connection with the SCC centennial in 2017.
What are the validity requirements for an arbitration agreement?
Under Swedish law, an arbitration agreement is, in general, no different than other agreements. Provided that an arbitration agreement is governed by Swedish law, issues relating to the formation and validity therein are governed by Swedish contract law.
An arbitration agreement must relate to an identified legal relationship, but no particular form is prescribed. Although arbitration agreements need not be in writing, this is recommended for evidentiary and enforcement related reasons.
In order for an arbitration agreement to be upheld, the parties must have legal capacity to conclude the agreement and it must concern a subject matter that is arbitrable under Swedish law.
An arbitration agreement can be declared void pursuant to ordinary contract law, if it was entered into as a result of fraud, undue influence, duress or on similar grounds. Although rare in a commercial context, an arbitration agreement can also be regarded as unreasonable due to certain circumstances relating to an uneven balance between the parties and therefore be set aside or modified by an arbitral tribunal or court.
Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?
Swedish courts are favourable towards arbitration. Valid arbitration agreements are respected and enforced by Swedish courts to the effect that they exclude the courts’ jurisdiction. A party that seeks to invoke an arbitration agreement as the basis for an objection to a court’s jurisdiction must do so in its first submission.
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?
The Arbitration Act contains no consolidation provisions. Thus, unless the parties agree otherwise, arbitral proceedings cannot be consolidated.
With respect arbitrations governed by the Stockholm Chamber of Commerce Arbitration Rules, arbitral proceedings concerning the same legal relationship may be consolidated in certain circumstances or in cases where all parties have not agreed to it.
Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
The Arbitration Act contains no rules on how to determine the applicable substantive law. In the absence of an agreement between the parties on the choice of law, the tribunal will decide what substantive law will be applied to the dispute.
The established practice in Sweden has been that the tribunal decides the applicable substantive law based on Swedish choice of law principles (ie, the lex arbitri conflict of law rules). However, in international arbitrations, the trend has been for tribunals also to use other methods for deciding on the substantive law.
Article 22 of the Stockholm Chamber of Commerce Arbitration Rules provides that the tribunal, in the absence of an agreement between the parties, can apply the law or rules of law which it considers to be most appropriate. Any designation made by the parties with regard to the law of a given state will be deemed to refer to the substantive law of that state and not to its conflict of laws rules.
Are there any provisions on the separability of arbitration agreements?
Yes, the doctrine of separability has been codified in the Arbitration Act. Section 3 of the Arbitration Act provides that an arbitration agreement will be deemed to constitute a separate agreement when the validity of an arbitration agreement, which constitutes part of another agreement, is determined in conjunction with a determination of the jurisdiction of the arbitrators.
Are multiparty agreements recognised?
Yes, multiparty agreements are recognised. However, since the Arbitration Act has no specific provisions on multiparty arbitration, it is advisable to include provisions on the constitution of the tribunal and the right to consolidate disputes in the arbitration agreement.
With respect to multiparty arbitrations, the Stockholm Chamber of Commerce (SCC) Arbitration Rules provide in Article 13 that the SCC board will appoint all arbitrators when the parties on either side of the dispute cannot agree on an arbitrator.
Criteria for arbitrators
Are there any restrictions?
In general, anyone who is 18 years of age or older and has full legal capacity may serve as an arbitrator in Sweden.
The Arbitration Act also provides that the arbitrator must be impartial. A person who is asked to serve as an arbitrator must therefore disclose to the parties all circumstances that might prohibit him or her from serving as an arbitrator.
The Arbitration Act contains no specific requirements with respect to the arbitrators’ nationality or qualifications. With respect to arbitrations governed by the Stockholm Chamber of Commerce Arbitration Rules, Article 13 provides that a sole arbitrator or the chair of the tribunal must be of different nationality than any of the parties in cases where the parties are of different nationalities.
What can be stipulated about the tribunal in the agreement?
The Arbitration Act gives the parties significant freedom to make stipulations about the tribunal in the agreement, including for example the number of arbitrators, the qualifications of the arbitrators and the appointment procedure.
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?
Yes. The Arbitration Act contains default provisions on the appointment of the tribunal which apply to the extent that the parties have not agreed on another appointment procedure. The Arbitration Act stipulates that:
- there will be three arbitrators;
- each party will appoint one arbitrator; and
- the appointed arbitrators will appoint the third arbitrator.
With respect to the characteristics of the tribunal, the Arbitration Act contains no specific requirements, other than that the arbitrators must have full legal capacity and be impartial.
Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?
Section 8 of the Arbitration Act provides that an arbitrator must be impartial. Section 8 also contains a non-exhaustive list of circumstances that are always deemed to diminish confidence in the arbitrator's impartiality, including where:
- the arbitrator or a person closely associated with him or her is a party to the proceedings, or otherwise may expect benefit or detriment worth attention from the outcome of the dispute;
- the arbitrator or a person closely associated with him or her is the director of a company or any other association that is party to the proceedings or otherwise represents a party or any other person who may expect benefit or detriment worth attention from the outcome of the dispute;
- the arbitrator has taken a position in the dispute, as an expert or otherwise, or has assisted a party in the preparation or conduct of its case; or
- the arbitrator has received or demanded compensation that has not been jointly agreed on by the parties.
When evaluating an arbitrator’s impartiality, other circumstances may naturally be taken into account and parties can seek guidance from, for example, the International Bar Association Guidelines on Conflicts of Interest in International Arbitration.
If a party so requests, an arbitrator will be discharged if any circumstances exist which may diminish confidence in the arbitrator’s impartiality. According to Section 10, a challenge on the grounds of non-impartiality must be presented within 15 days of the day on which the party became aware of the appointment of the arbitrator and the circumstances by which the arbitrator’s impartiality can be questioned. The request to discharge an arbitrator will, unless otherwise agreed between the parties, be tried by the arbitrators (including the arbitrator whose impartiality is in question).
If the challenge is successful, it is not subject to appeal. If the challenge is denied or dismissed on the grounds that the motion was not filed in time, a party may, within 30 days of receiving the decision, request the district court to discharge the arbitrator. The arbitral proceedings may continue, pending the district court’s decision.
The decision by the district court may be appealed to the court of appeal.
How should an objection to jurisdiction be raised?
Under Swedish law, the tribunal may examine and rule on its own jurisdiction to decide on the dispute. However, the final decision on jurisdiction lies with the court.
A party that wants to raise a jurisdictional objection can either request the tribunal to dismiss the claim due to lack of jurisdiction or turn to the district court and request a declaratory judgment on the tribunal’s jurisdiction. The district court’s judgment can be sought before or during the arbitral proceedings and it is binding on the arbitrators.
The Arbitration Act contains no express provision on the timing of a jurisdictional objection. However, a party should at an early stage raise a jurisdictional objection; otherwise, the possibility to challenge the award on the ground that the tribunal lacks jurisdiction will be forfeited.
In proceedings under the Stockholm Chamber of Commerce Arbitration Rules, Article 5(i) provides that any objections regarding the existence, validity or applicability of the arbitration agreement should be included in the respondent’s answer to the request for arbitration. However, the respondent maintains its right to raise such objections up to and including the submission of the statement of defence.
To maintain the right to challenge the arbitral award based on the tribunal’s lack of jurisdiction, a respondent must object without delay to the tribunal’s decision establishing that it has jurisdiction.
Replacement of an arbitrator
Why and how can an arbitrator be replaced?
Although it is not expressly stated in the Arbitration Act, the parties have the power to jointly remove an arbitrator (or the entire tribunal). The Arbitration Act deals only with discharge of arbitration on two occasions (ie, in case of lack of impartiality or delay of the proceedings).
When an arbitrator has resigned or been discharged – for example, as a result of a successful challenge to the arbitrator’s impartiality – the Arbitration Act provides that the arbitrator will be replaced. The procedure for replacing an arbitrator depends on whether the circumstances causing the arbitrator to be unable to fulfil his or her duties arose before or after appointment. In the former case (and in all cases where an arbitrator has been discharged for delaying the proceedings), the district court will make the new appointment on a party’s request. In cases where the relevant circumstances arose after the appointment of the arbitrator, the person who was originally entitled to make the appointment will appoint the new arbitrator.
Powers and obligations
What powers and obligations do arbitrators have?
The arbitration agreement and the Arbitration Act constitute the primary basis for the arbitrators’ powers and obligations under Swedish law. This means that the parties have significant influence in this respect.
Arbitrators generally have extensive powers to decide on the dispute and issues relating to the arbitral proceedings, subject to the requirements of due process. As regards the conduct of the arbitral proceedings, the arbitrators’ powers include deciding on:
- the seat of the arbitration;
- the applicable law;
- the timetable for the arbitration;
- production of documents;
- issues relating to evidence, including witness and experts; and
- security measures.
Arbitrators have no governmental powers enabling them to, for example, subpoena third parties or witnesses to appear at hearings and similar.
Pursuant to the Arbitration Act, interim measures decided by the arbitrators are unenforceable.
Particular powers may also be conferred by the parties’ references to institutional rules – for example, the Stockholm Chamber of Commerce Arbitration Rules.
Arbitrators are obliged to decide on the dispute and handle the arbitral proceedings in an impartial, effective and speedy manner. Another central obligation is to provide the parties with sufficient opportunity to present their cases.
Liability of arbitrators
Are arbitrators immune from liability?
No. The Arbitration Act does not exclude liability for damages. The general view is that arbitrators might be liable to pay damages for loss caused by negligence in their performance as arbitrators. However, the degree of negligence required for liability is not agreed on. While some authors suggest that negligence is enough, others consider gross negligence or wilful misconduct to be required in order for arbitrators to become liable for damages.
According to Article 48 of the Stockholm Chamber of Commerce (SCC) Arbitration Rules, the SCC and the arbitrators are excluded from liability for any act or omission in connection with the arbitration, except when such act or omission constitutes wilful misconduct or gross negligence.
Communicating with the tribunal
How do the parties communicate with the tribunal?
The parties and tribunal are free to agree on an appropriate means of communication. The most common means of communication in arbitral proceedings is email.
Pursuant to Article 8 of the Stockholm Chamber of Commerce Arbitration Rules, any communication from the secretariat, the board or the tribunal must be delivered to the last known address of the addressee by courier or registered mail, fax, email or in any other way that provides a record of the sending thereof.
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?
According to Section 30(2) of the Arbitration Act, the majority’s opinion will prevail unless the parties have decided otherwise. If no majority decision can be reached, the chair’s opinion will prevail.
Are there any disputes incapable of being referred to arbitration?
Section 1 of the Arbitration Act provides that disputes where the parties may reach a settlement on the subject matter of the dispute can be referred to arbitration. Thus, disputes where the parties cannot reach out-of-court settlement under the applicable substantive law are non-arbitrable. Under Swedish law, this includes disputes regarding the registration and validity of patents and trademarks and most questions relating to family law (eg, divorce and child custody cases).
Further, the Arbitration Act does not allow arbitration agreements concerning future consumer disputes. However, once such dispute has arisen, the consumer is free to agree to arbitration.
Section 1 expressly provides that arbitrators may rule on the civil law effect of competition law as between the parties.
Can the arbitrability of a dispute be challenged?
Yes, an award involving a decision on arbitrability may be challenged.
Jurisdiction and competence-competence
Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
Yes. Pursuant to Section 2 of the Arbitration Act, a tribunal may rule on its own jurisdiction to decide a dispute. The tribunal’s discretion in this regard does not prevent a party from requesting the courts to determine an issue relating to the tribunal’s jurisdiction. Pending the court’s ruling, the tribunal may continue the arbitral proceedings.
If the tribunal finds that it has jurisdiction, a party reserving its rights may subsequently challenge an award entailing such decision in court. Should the tribunal find that it does not have jurisdiction and dismiss the dispute by way of an award, the Arbitration Act allows a party to challenge such award.
Starting an arbitration proceeding
What is needed to commence arbitration?
Under the Arbitration Act, unless otherwise agreed by the parties, arbitral proceedings are commenced when a party receives a request for arbitration. The request for arbitration should be in writing and include the following information:
- an express and unconditional request for arbitration;
- a statement of the issue which is covered by the arbitration agreement and which is to be resolved by the arbitrators; and
- a statement of the party’s choice of arbitrator where the party is required to appoint an arbitrator.
Are there any limitation periods for the commencement of arbitration?
The Arbitration Act contains no specific rules regarding time limits for the commencement of arbitration.
Should a claim be subject to a statute of limitations (either by an agreement or by law), it must be tried by the arbitrators as grounds for dismissal. Thus, a statute barring, for example, a payment claim does not result in the arbitration agreement lapsing.
Are there any procedural rules that arbitrators must follow?
In general, the Arbitration Act allows the parties to agree on the conduct of the proceedings as they see fit. In the absence of any agreement regarding the conduct of the proceedings, the tribunal may conduct the arbitration as it considers appropriate, subject to the Arbitration Act and institutional rules, if applicable. There are a rules safeguarding due process that must be observed, including the following:
- The arbitrators must handle the dispute in an impartial, practical and speedy manner.
- The parties must be afforded an opportunity to present their respective cases in writing or orally, to the extent necessary.
- The parties may not give the tribunal powers exclusively reserved to the courts, such as the administering of oaths or truth affirmations, imposition of conditional fines or other compulsory measures in order to obtain requested evidence.
- The parties may not agree to exclude or restrict the rules governing invalid awards. However, non-Swedish parties may agree to waive in advance the applicability of the grounds for setting aside an award.
Are dissenting opinions permitted under the law of your jurisdiction?
Yes, dissenting opinions are permitted.
Can local courts intervene in proceedings?
Swedish courts are arbitration friendly and have no competence to intervene in arbitral proceedings. A separate issue is that Swedish courts have jurisdiction over certain elements of the procedure, as the parties may request the court’s assistance in order to:
- conduct witness examinations under oath;
- order the production of documents;
- appoint or remove an arbitrator; and
- order enforceable interim measures.
Can the local courts assist in choosing arbitrators?
Yes. If a party, an arbitrator or another entity that is required to appoint an arbitrator fails to do so, the district court will, on request of a party, appoint the arbitrator in question.
What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?
Section 24 of the Arbitration Act provides that if a party fails to appear at a hearing or otherwise fails to comply with an order from the arbitrators without a valid reason, such failure shall not prevent a continuation of the proceedings or a resolution on the dispute on the basis of the existing materials. However, if such situation occurs, the tribunal must consider the case as if both parties were actively engaged in the arbitral proceedings.
The courts cannot compel parties to arbitrate (although they can assist in choosing an arbitrator), nor can they issue subpoenas to third parties.
In what instances can third parties be bound by an arbitration agreement or award?
In principle, arbitration agreements and awards are binding solely on the parties. However, in certain situations, arbitration agreements and awards may be binding on third parties.
For example, in case of universal succession and as a main rule in case of singular succession, the successor is bound by the arbitration agreement which was binding on the succeeded party. In cases of bankruptcy, the bankruptcy estate is bound by the arbitration agreement entered into by the debtor and its joint party before the onset of the bankruptcy.
In certain other cases, arbitration agreements and awards may be binding in relation to third parties. For example, an arbitration agreement included in a contract between a creditor and debtor may, under certain circumstances, be binding in relation to the guarantor.
Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?
If the parties have not agreed on the place or seat of arbitration, the tribunal will determine the issue. The tribunal may hold hearings and other meetings in places other than the place of arbitration (unless the parties have agreed otherwise).
If the parties cannot agree on the language of the arbitration, the tribunal will decide on this issue, taking into account for example:
- the nationality of the parties and their counsel;
- the language of the contract and other documents; and
- the language used in any correspondence between the parties.
How is evidence obtained by the tribunal?
The tribunal may, at a party’s request, order the other party or a third party to produce documents that may be of evidentiary value. However, such orders are unenforceable. If a party refuses to provide the documents ordered by the tribunal, the tribunal may permit a party to request that the district court orders the production. A court order is enforceable.
What kinds of evidence are acceptable?
In general, any evidence is admissible and the tribunal is free to determine the weight and relevance of the evidence in each case. However, according to Section 25 of the Arbitration Act, the arbitrators may refuse to admit evidence that is manifestly irrelevant to the case or if such refusal is justified, having regard to the time at which the evidence was offered.
Is confidentiality ensured?
The Arbitration Act contains no provisions dealing with confidentiality. Nevertheless, arbitration in Sweden is considered to be private (as opposed to public), but not confidential in all aspects.
According to Swedish case law, the parties to arbitration proceedings are not bound by confidentiality, unless they have explicitly agreed on this. However, disclosure of information outside the arbitral proceedings can of course be protected by other regulations, such as the Swedish Trade Secret Act.
Counsel, arbitrators and arbitration institutions are bound by confidentiality corresponding to their specific roles. With respect to arbitrations conducted under the Stockholm Chamber of Commerce (SCC) Arbitration Rules, it is explicitly stated in Article 46 of the SCC Rules that the SCC and the tribunal, unless otherwise agreed by the parties, must maintain confidentiality of the arbitration and the award.
Can information in arbitral proceedings be disclosed in subsequent proceedings?
Yes. If, for example, the arbitral award is challenged before the court of appeal, the award and any other documents filed to the court will generally be made public, in accordance with the rule of public access. There are statutory grounds for requesting the court to maintain confidentiality with respect to some information.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
Although no specific ethical code applies to arbitrators, they must respect the ethical responsibilities set out in the Arbitration Act, including to:
- maintain impartiality;
- conduct the arbitral proceeding in an efficient manner; and
- provide both parties with sufficient opportunity to present their case.
Counsel and arbitrators who are members of the Swedish Bar Association are also required to observe the Bar Association’s Code of Professional Conduct. This includes, among other things, the requirement to observe confidentiality.
Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?
Section 37 of the Arbitration Act provides that the arbitrators are entitled to reasonable compensation for work and expenses and that the parties, as a rule, are jointly and severally liable to pay such compensation. In addition, reasonable costs incurred by a party (eg, counsel’s fees and costs related to representatives of the party) can be reimbursed.
Unless otherwise agreed between the parties, the tribunal may, on request by a party, order the allocation of costs. In Sweden, the ‘loser pays’ rule has gained general acceptance. Thus, the tribunal will usually regard the outcome of the case when allocating the costs for the arbitrators as well as the costs incurred by the party.
The Stockholm Chamber of Commerce (SCC) Arbitration Rules contain provisions on determining and allocating costs. According to the SCC rules, the costs of the arbitration proceeding consist of:
- the fees of the tribunal;
- the administrative fees; and
- the expenses of the tribunal and the SCC.
Before the tribunal makes the final award, it must request the SCC board to determine the costs of the arbitration. Unless the parties have agreed otherwise, the tribunal will, at the request of a party, apportion the costs of the arbitration between the parties. The parties are jointly and severally liable to the arbitrator(s) and the SCC for the costs of the arbitration.
According to Section 44 of the SCC Arbitration Rules, if the parties have not agreed otherwise, the arbitral tribunal may, in the final award on a party’s request, order one of the parties to pay any reasonable costs (including legal representation) incurred by another party.
Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?
Section 38 of the Arbitration Act provides that the tribunal can request security for the tribunal’s compensation. Tribunals in ad hoc proceedings commonly request an advance deposit by the parties as security. If a party does not pay its share, the other party can pay both parts and thereafter claim reimbursement from the opposing party. Should the requested security not be provided, the arbitrators may terminate the proceedings.
According to Section 40, arbitrators may not withhold the award pending the payment of the compensation to them.
According to Article 45 of the Stockholm Chamber of Commerce (SCC) Arbitration Rules, the SCC board shall determine the amount to be paid by the parties as an advance on costs. Each party must pay half of that amount. If a party fails to make a required payment, the other party will be given the opportunity to do so. If payment is not made, the SCC board will dismiss the case in whole or in part.
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
Generally speaking, the Arbitration Act contains few formal requirements regarding the arbitral award. Section 31 of the Arbitration Act provides that the award must be made in writing and signed by the arbitrators. Non-observance of these requirements would result in the arbitral award being invalid. Further, according to Section 31, the place or seat of arbitration and the date when the award was made must be stated in the award. However, non-observance of these requirements will not render the award invalid.
Legal literature holds that even though it is not explicitly stated in the Arbitration Act, the award must identify the parties to the dispute as well as the dispute itself. It is also held in the legal literature that an award must contain a clear and definitive decision. No explicit statutory requirement obliges arbitrators to state their reasons in the award, but the tribunal is, in practice, required to do so.
Article 36 of the Stockholm Chamber of Commerce Arbitration Rules explicitly provides that the tribunal must make its award in writing and, unless otherwise agreed by the parties, state the reasons on which the award is based. The award must also include the date of the award and the seat of arbitration, and be signed by the arbitrators.
The award is not subject to review or scrutiny by any other body (except where there is a question as to the applicable institutional rules).
Timeframe for delivery
Are there any time limits on delivery of the award?
The Arbitration Act contains no time limit for the delivery of the award, but provides that disputes will be handled in a speedy manner.
Article 37 of the Stockholm Chamber of Commerce (SCC) Arbitration Rules explicitly provides that the final award must be made no later than six months of the date on which the arbitration was referred to the tribunal. On a reasoned request from the tribunal, or if otherwise deemed necessary, the SCC board may extend this time limit.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
If the dispute is arbitrable, a tribunal may, within the scope of the arbitration agreement, grant any remedy or relief available to the courts.
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
Available interim relief includes orders to:
- provide security for the claim that will be adjudicated by the tribunal;
- seize property;
- preserve evidence; and
- take actions or refrain from taking actions which are likely to cause imminent harm or prejudice to the arbitral process.
Local courts can issue interim relief pending constitution of the tribunal.
The Stockholm Chamber of Commerce Arbitration Rules contain rules regarding emergency arbitration, which can be used to obtain an emergency decision on interim measures before the tribunal is constituted.
Interim measures issued by an arbitral tribunal are not enforceable.
Can interest be awarded?
Yes, on request by a party.
At what rate?
A party’s entitlement to interest is held as a substantive issue. In cases where Swedish law applies, interest will apply to an award unless otherwise agreed between the parties. The default penalty interest rate under the Swedish Interest Act 8%, plus the reference rate established by the Swedish central bank.
Is the award final and binding?
Yes, the award is final and binding on the parties when it is issued.
What if there are any mistakes?
Section 32 of the Arbitration Act enables the tribunal, within 30 days of the announcement of the award, to correct or supplement the award at its own initiative if it finds that:
- the award contains any obvious inaccuracy as a consequence of a typographical, computational or other similar mistake; or
- the tribunal by oversight has failed to decide an issue which should have been dealt with in the award.
On request by any of the parties, the tribunal may also correct an award or interpret the decision in an award. Before a decision to correct, supplement or interpret the decision in the award, the parties should be afforded an opportunity to express their views with respect to the measure. Further, an award whereby the arbitrators concluded the proceedings without ruling on an issue submitted to them for resolution may be amended, in whole or in part, on application by one of the parties.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
Parties cannot exclude or limit the right to challenge the award beforehand, except in cases concerning a commercial relationship, where none of the parties is domiciled or has its place of business in Sweden. After the award has been rendered, the parties are free to waive their right to challenge it.
When it comes to awards dismissing or rejecting a claim due to, for instance, lack of jurisdiction, it has been established in case law that the parties may agree to waive their right to challenge such award, both before and after it is rendered.
What is the procedure for challenging awards?
Any challenges to awards must be filed with the court of appeal within the jurisdiction where the proceedings were held. If this is not stated in the award, the Arbitration Act stipulates that the challenge can be brought before the Svea Court of Appeal. According to Section 34(3) of the Arbitration Act, a challenge against an award must be brought within three months of the receipt of the award.
In general, the court of appeal’s decision on matters of invalidity, setting aside and amendment of an award may not be appealed. However, the court can permit a party to appeal where the case is of importance as a matter of precedence.
On what grounds can parties appeal an award?
There are no grounds for appealing an award on the merits of the case. However, the Arbitration Act enables a party to make an application to the court of appeal to decide on the validity of an award or to challenge the award.
According to Section 33 of the Arbitration Act, an award is invalid if:
- it includes a determination on an issue that may not be decided by arbitrators under Swedish law;
- it, or the manner in which it arose, is clearly incompatible with the basic principles of the Swedish legal system (public policy); or
- it does not fulfil the requirements with regard to the written form and signature in accordance with the Arbitration Act.
According to Section 34, an award may, in whole or in part, be set aside on the motion of a party if:
- it is not covered by a valid arbitration agreement between the parties;
- the arbitrators made the award after the expiration of the period decided on by the parties, or where the arbitrators have otherwise exceeded their mandate;
- the arbitral proceedings should not have taken place in Sweden;
- an arbitrator was appointed contrary to the agreement between the parties or the Arbitration Act;
- an arbitrator did not meet the impartiality requirements or possess full legal capacity; or
- an irregularity occurred in the course of the proceedings (without fault of the party) which likely influenced the outcome of the case.
Under Section 36 of the Arbitration Act, parties can challenge awards where the arbitrators concluded the proceedings without ruling on an issue submitted to them (ie, rejection or dismissal).
What steps can be taken to enforce the award if there is a failure to comply?
The award is an enforcement title and can be enforced by the Swedish Enforcement Authority on application of a party.
Can awards be enforced in local courts?
Awards rendered in Sweden are final and binding and constitute, just like judgments rendered by local courts, an enforcement title. Thus, there is no need to enforce the awards in local courts. The awards can be enforced by the Swedish Enforcement Authority.
How enforceable is the award internationally?
As Sweden ratified the New York Convention without reservation, the award may be enforced in contracting states.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
Swedish law accepts state immunity at the enforcement stage to the extent that the relevant property is used for official purposes or purposes nearly linked to the official purposes. Should the property not be sufficiently connected to the state’s official purposes, enforcement of the award will be possible.
Are there any other bases on which an award may be challenged, and if so, by what?
No, the grounds on which an award can be challenged are exhaustive.
How enforceable are foreign arbitral awards in your jurisdiction?
Sweden is a signatory to the New York Convention. This means that foreign awards from other signatory countries may be enforced in Sweden. To enforce a foreign award in Sweden, the party seeking enforcement must file an application with the Svea Court of Appeal for recognition and enforcement.
For awards rendered under the Washington (International Centre for Settlement of Investment Disputes) Convention, no application to the Svea Court of Appeal is required. Such awards are enforceable as if they were a final judgment of a Swedish court or a Swedish arbitration award.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
A judgment by which an award has been set aside can be invoked as a defence against an application for enforcement.
Rules and restrictions
Are there rules or restrictions on third-party funders?
Class-action or group arbitration
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?
Multiparty arbitration is allowed if there is an arbitration agreement providing for multiparty arbitration. However, the concept of class-action arbitration or group arbitration is not established under Swedish law.
Are there any hot topics or trends emerging in arbitration in your jurisdiction?
The two words that, arguably, summarise the ongoing developments in Swedish arbitration law are ‘internationalisation’ and ‘efficiency’. The ongoing revision of the Arbitration Act is driven by an ambition to internationalise the Arbitration Act further in order to make Swedish arbitration even more attractive to international parties. The committee established by the government has proposed a number of improvements which set out that the limited number of features in the Arbitration Act that are perceived as unusual in an international context will be adapted to better correspond to international arbitration practice. The Stockholm Chamber of Commerce (SCC) Arbitration Rules are also undergoing a revision which, among other things, is intended to promote overall efficiency in proceedings under the SCC Rules, taking into consideration the different types of case conducted under the rules.