Facts
District court decision
Appeal court decision
Supreme Court decision
Comment
Concorp Scandinavia AB brought an action in the district court against Karelkamen Confectionary AB. Concorp claimed that Karelkamen was liable to pay Skr12 million pursuant to a loan.
Karelkamen argued that Concorp's action should be dismissed, claiming that the dispute should be resolved by arbitration in accordance with the Arbitration Act.(1) The basis of Karelkamen's motion for dismissal was that the loan was covered by a cooperation agreement and a related supplemental agreement, according to which Xcaret Confectionary Holding had acquired Karelkamen from Concorp. Although the agreements were signed only by Xcaret and Concorp, they were binding on all three companies, according to Karelkamen. Each agreement contained an arbitration clause. In addition to the motion to dismiss the action, Karelkamen claimed substantively that it was not liable to pay the loan due to certain circumstances relating to the cooperation agreement.
Among other things, the loan which formed the basis of Concorp's claim had been satisfied following a set-off against a counterclaim based on the cooperation agreement.
The district court denied Karelkamen's motion to dismiss Concorp's action. The district court found that Concorp was not a party to the cooperation agreement and the related supplemental agreement. Accordingly, the district court had jurisdiction to determine the dispute. However, the district court dismissed Karelkamen's substantive set-off objection, which was based on a claim under a cooperation agreement. That agreement did in fact contain an arbitration clause.
Karelkamen appealed the district court's decision. Concorp opposed the motion to modify the judgment. The appeal court found that Concorp's claim was governed by the cooperation agreement and that Karelkamen was thus bound by the agreement. Thus, the appeal court dismissed Concorp's action.
The decision was appealed to the Supreme Court, which issued its judgment on April 5 2012.(2)
The Supreme Court considered whether the district court – in light of the parties' assertions in support of their claims – had jurisdiction to determine the asserted claim under the loan.
The Supreme Court stated that this issue should be assessed based on what Concorp asserted regarding its right. As the basis of its claim, Concorp argued that:
- the loan was the result of a legal relationship that was separate from the agreements which were covered by the arbitration clauses; and
- pursuant to the doctrine of assertion, the district court did not, as a result of the arbitration clauses, lack jurisdiction to determine the claim on the asserted basis.
The Supreme Court's decision confirms the importance of the doctrine of assertion to the issue of jurisdiction, which has proved to be a wise approach.
For further information on this topic please contact Björn Tude at Gernandt & Danielsson Advokatbyrå by telephone (+46 8 670 66 00), fax (+46 8 662 61 01) or email ([email protected]).
Endnotes