On 21 November 2018, the Swedish Parliament adopted revisions to the Swedish Arbitration Act (“SAA”). The revisions continue to reflect the influence that the UNCITRAL Model Law also had on the current 1999 Act, but are intended to make arbitration proceedings seated in Sweden more efficient and more accessible, especially for foreign practitioners, ensuring that Sweden continues to be an attractive venue for international dispute resolution. The revised SAA is set to enter into force on 1 March 2019.
Some of the key amendments to the SAA are described below.
Under the current 1999 Act, the parties have the option of bringing a declaratory action to the District Court to determine jurisdiction prior to or during an arbitration, with the arbitrators entitled to continue arbitration proceedings in parallel with the court proceedings. Parties may also challenge an Award on jurisdictional grounds in set-aside proceedings at the Court of Appeal.
The revised SAA will change the current practice in two significant ways; first, the revised SAA will allow parties to bring declaratory actions to determine jurisdiction only prior to the commencement of arbitration, unless the other party does not object to such parallel proceedings after the commencement of arbitration. Second, the revised SAA provides that if the arbitrators have decided that they have jurisdiction over the dispute, a party may appeal such a decision to the Court of Appeal within 30 days. During the judicial review, the arbitration may continue. Parties should pay careful attention to the time-limit for an appeal of such an order as compared to challenging an award on jurisdictional grounds.
Appointment of arbitrators in multi-party arbitrations
The revised SAA entails that if an arbitration is commenced against two or more respondents, and they cannot agree on the appointment of an arbitrator, the court shall upon the request of a party appoint the entire tribunal, and release any arbitrator previously appointed. It should nevertheless be noted that the revision addresses the appointment of the arbitral tribunal in such cases when the parties have not agreed otherwise, which they typically would have by agreeing to arbitration rules such as the SCC or ICC rules.
Consolidation of two or more arbitrations into single arbitration proceedings
The current 1999 Act does not contain any provisions governing consolidation. However, the revised SAA provides that a party may request the District Court to consolidate two or more arbitrations when three conditions are met: (i) the parties do not object to it; (ii) the same arbitrators are appointed in all arbitral proceedings; and (iii) the arbitrators consider consolidation to be beneficial to the arbitrations. The consolidated proceedings may also be separated if the court considers it to be justified.
This provision should be considered in the context of the applicable arbitration rules in a specific case; if the parties have agreed to arbitration rules that provide for consolidation procedures it would not be applicable. The Act’s consolidation provision would thus mainly be used in ad hoc proceedings.
Determination of the applicable substantive law by the arbitral tribunal in case of absence of an agreement between the parties
The current 1999 Act does not provide for the determination of the substantive law applicable to the dispute. The revised SAA first of all provides that the arbitrators shall apply the law or set of legal rules the parties have agreed to. Second, in the absence of a party agreement, the revised SAA gives arbitrators an explicit mandate to determine the applicable substantive law. However, the SAA does not regulate on which grounds the arbitrators shall make such a determination. Only if the parties have so agreed shall the arbitral tribunal decide the dispute ex aequo et bono.
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
Excess of mandate is a ground for setting aside an award under the current 1999 Act. The revised SAA introduces a provision, requiring the party challenging an award on the grounds of excess of mandate to show that the outcome of the dispute has been affected by the alleged excess of mandate.
Shorter term for setting aside the arbitral award
The revised SAA will reduce the timeline for applications to set aside an arbitral award from 3 months to 2 months from the date when the party received the award.
Independence of the arbitrators
The revised SAA places an emphasis on the independence of the arbitrators. The current 1999 Act only requires the arbitrators to be impartial. The revised SAA provides that the arbitrator shall not only be impartial, but also independent.
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 local Appeal Court’s decision to the Supreme Court. This enables the Supreme Court to limit its examination to issue(s) of precedential value.