James Hope, Advokatfirman Vinge KB
This is an extract from the first edition of GAR’s The Guide to Challenging and Enforcing Arbitration Awards. The whole publication is available here.
Applicable requirements as to the form of arbitral awards
Applicable legislation as to the form of awards
1 Must an award take any particular form (e.g., in writing, signed, dated, place, the need for reasons, delivery)?
The following requirements are set out in the Swedish Arbitration Act.
An award must be in writing and it must be signed by the arbitrators. If there is more than one arbitrator, it is sufficient that the majority of the arbitrators sign the award, as long as the reason for this is noted in the award. Further, the parties may decide that it is sufficient that the chairman of the arbitral tribunal alone signs the award. The award should also include the date when the award is made and the place of the arbitration, and it must be delivered to the parties immediately. The award must also include a clear reference as to what a party wishing to challenge the award must do.
It should be noted that the government has proposed that the Swedish Arbitration Act should be updated and slightly amended. The amendments entered into force on 1 March 2019.
In relation to the requirements mentioned above, the wording of the Act has now been slightly changed. In particular, the phrase ‘place of the arbitration’ has been changed to ‘seat of the arbitration’. Further, instead of stating that the award should be delivered to the parties, the new paragraph states that the award should be immediately ‘left or sent to the parties’.
Applicable procedural law for recourse against an award
Applicable legislation governing recourse against an award
2 Are there provisions governing modification, clarification or correction of an award?
The following requirements are set out in the Swedish Arbitration Act.
If arbitrators reach the conclusion that there is an obvious inaccuracy in an award, they may decide to correct or supplement the award pursuant to the Swedish Arbitration Act. For the arbitrators to be able to correct or supplement the award, the inaccuracy must be a consequence of a typographical, computational, or other similar mistake, made by the arbitrators or another person, or the arbitrators must by oversight have failed to decide on an issue that they should have dealt with in the award. The arbitrators may also decide to correct or supplement the award or interpret the decision in the award if a party requests them to do so.
In the travaux préparatoires to the Swedish Arbitration Act (Proposition 1998/99:35), it is emphasised that arbitrators have the right to correct, supplement or interpret an award, but they do not have any obligation to do so. Before the arbitrators decide to correct, supplement or interpret the award, they should give the parties an opportunity to make submissions in relation to the decision.
There are certain time limits within which a decision to correct or supplement an award, or to interpret a decision in an award, must be made. If the arbitrators themselves decide to correct or supplement the award, they must do so within 30 days of when the award is made. If a party wants the arbitrators to correct or supplement the award or interpret a decision in the award, that party must make such a request within 30 days of receipt of the award. Thereafter, the arbitrators have 30 days to correct or interpret the award and 60 days to supplement the award.
Appeals from an award
3 May an award be appealed to or set aside by the courts? If so, on what grounds and what procedures? What are the differences between appeals and applications for set-aside?
An award may only be appealed or set aside on certain grounds specified in the Swedish Arbitration Act.
Invalidity
An award is invalid, as a whole or in part, if it includes a question which, according to Swedish law, may not be tried by arbitrators; if the award, or the way in which it was made, is clearly incompatible with the foundation of the Swedish legal system; or if the award does not fulfil the requirement in relation to the written form and the signing of the award (as described in question 1).
The travaux préparatoires to the Swedish Arbitration Act (Proposition 1998/99:35) state that the above list is exhaustive.
Amendment of an award that has not ruled upon the substantive issues
The court may, upon application, amend an award, in whole or part, if the arbitrators concluded the proceedings without ruling on the issues on which they should have ruled. This happens, for example, if the arbitrators conclude that they do not have jurisdiction to rule upon the merits.
An action for amendment must be brought within three months of the date on which the party received the award in its final form (the possibility to amend, supplement or interpret the award is discussed in question 2). If the action relates only to the questions of payment of legal costs and the arbitrators’ costs, the award may only be amended if the arbitrators decide that they lacked jurisdiction to determine the dispute.
Set-aside
If an award is not invalid or cannot be amended as described above, it may be set aside, partly or as a whole, based on the following grounds: (1) the award is not covered by a valid arbitration agreement between the parties; (2) the award has been made by the arbitrators after the period set by the parties has expired or the arbitrators have otherwise exceeded their mandate; (3) the arbitral proceedings should not have taken place in Sweden according to the Swedish Arbitration Act; (4) an arbitrator has been appointed contrary to the parties’ agreement or the Swedish Arbitration Act; (5) an arbitrator was unauthorised because he or she did not possess full legal capacity in relation to his or her actions and his or her property, or because he or she was not impartial; or (6) another irregularity had occurred during the course of the proceedings, without fault of any party, and that irregularity may have influenced the outcome of the matter.
A party is not allowed to rely on a circumstance that the party, through acting in the proceedings without objection or in any other way, may be deemed to have refrained from claiming.
An action under Section 34 of the Act must be brought within two months of the date on which the party received the final award (in relation to the possibility to amend, supplement or interpret the award, see question 2). When this time limit has expired, the party is not allowed to invoke another ground for objection. Note that there are specific rules and time frames if a party wants to rely on a circumstance mentioned in point (5) above.
Applicable procedural law for recognition and enforcement of arbitral awards
Applicable legislation for recognition and enforcement
4 What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral?
The applicable procedural law for recognition and enforcement of an arbitral award, foreign and domestic, is set out in the Swedish Arbitration Act, the Enforcement Code and in general procedural law, including the Swedish Code of Judicial Procedure.
Sweden is a party to the New York Convention and to the ICSID Convention. Sweden is also a Member State of the European Union and as such is bound by rules and regulations within the context of EU cooperation.
Further, Sweden has entered into bilateral treaties with other countries. (It is not possible to give an exhaustive list here of the conventions and bilateral treaties that Sweden is bound by.)
The New York Convention
5 Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?
Sweden is a party to the 1958 New York Convention, which entered into force in Sweden on 27 April 1972. No reservations under Article I(3) have been made.
Recognition proceedings
Competent court
6 Which court has jurisdiction over an application for recognition and enforcement of arbitral awards?
A domestic arbitral award may be enforced by the Swedish Enforcement Authority pursuant to the Enforcement Code. No recognition proceedings are necessary; however, the Swedish Enforcement Authority will, before enforcing the award, examine whether the domestic award satisfies certain requirements for enforceability.
A foreign award is defined in the Swedish Arbitration Act as an award made abroad. An award is deemed to be made in the country where the seat of arbitration is situated.
Before a foreign award may be enforced by the Swedish Enforcement Authority, a declaration of enforceability must be obtained. An application for a declaration of enforceability should, pursuant to the Swedish Arbitration Act, be made to the Svea Court of Appeal in Stockholm. If the application is granted, the foreign award is enforceable in Sweden in the same way as a Swedish legally binding judgment, if nothing else is decided by the Supreme Court upon appeal. It should be noted that no declaration of enforceability is necessary for the foreign award to be recognised in Sweden.
Jurisdictional issues
7 What are the requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards (domestic and foreign awards)? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?
As stated in question 6, the Svea Court of Appeal in Stockholm has jurisdiction. There are no such requirements.
Form of the recognition proceedings
8 Are the recognition proceedings in your jurisdiction adversarial or ex parte?
An application for a declaration of enforceability of a foreign award may not be granted unless the other party has been offered an opportunity to give his or her opinion on the application. As such, the proceedings are inter partes.
Form of application and required documentation
9 What documentation is required to obtain the recognition of an arbitral award?
To obtain a declaration of enforceability from the Svea Court of Appeal regarding a foreign arbitral award, an application must be submitted with the original or a certified copy of the award. Further, unless the Svea Court of Appeal decides otherwise, a certified translation of the award into Swedish must also be submitted to the court. If the other party contests that an arbitration agreement was entered into, the applicant must also submit the original or a certified copy of the arbitration agreement, as well as, if nothing else is decided by the court, a certified translation into Swedish, or prove that an arbitration agreement was entered into in some other way.
It is sufficient to submit one copy of the required documentation.
Translation of required documentation
10 If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition of an arbitral award? If yes, in what form must the translation be?
A certified copy of the award into Swedish should be submitted to the court, if nothing else is decided by the court. Further, if the applicant is required to submit the arbitration agreement, it may be necessary to submit a certified translation of the arbitration agreement into Swedish if the court does not decide otherwise. Note that the requirement to translate documents may vary depending on the language of the documents.
Other practical requirements
11 What are the other practical requirements relating to recognition and enforcement of arbitral awards?
A domestic award is enforceable by the Swedish Enforcement Authority straight away upon application. However, the Enforcement Authority will, before enforcing the domestic award, examine whether the award satisfies certain formal requirements to be enforceable.
Moreover, if the Enforcement Authority has reason to believe that the award is invalid and there are no ongoing proceedings regarding this issue, it may order the applicant to commence such proceedings within one month of service of the order.
There are no fees for applying for a declaration of enforceability of a foreign award in the Svea Court of Appeal. However, note that the ‘losing party’ in the proceedings, in certain situations, has been ordered to pay the other party’s legal costs (see case NJA 2001 p. 738).
Once the foreign award has been declared enforceable, the award may, upon application, be enforced by the Swedish Enforcement Authority. During these enforcement proceedings, the applicant may be required to pay some of the costs incurred – this applies to enforcement of foreign awards as well as domestic awards. The costs vary, depending on what type of enforcement measures the Swedish Enforcement Authority is required to take.
Recognition of interim or partial awards
12 Do courts recognise and enforce partial or interim awards?
The general rule is that a foreign award based on an arbitration agreement is recognised and enforceable in Sweden, except in certain situations explicitly stated in the Swedish Arbitration Act.
However, a foreign award is not recognised or enforced in Sweden if the counterparty can prove that the award is not yet binding upon the parties, that it has been set aside, or that the enforcement has been postponed by a competent authority in the other country or under which legislation it has been made.
Thus, interim awards will not be enforced unless they can be shown to be final and binding in respect of the issues that they determined.
Grounds for refusing recognition of an award
13 What are the grounds on which an award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the Convention?
The general rule is that a foreign award based on an arbitration agreement is recognised and enforced in Sweden. However, there are a few exceptions to this rule. An award that includes a question that, according to Swedish law, may not be determined by arbitrators, or if it would be manifestly incompatible with the grounds of the Swedish legal system to recognise or enforce the award, cannot be recognised or enforced in Sweden. Further, the other grounds for refusal may be summarised as follows.
- The parties lacked capacity pursuant to the applicable law to enter into the arbitration agreement or they were not properly represented, or the arbitration agreement is invalid pursuant to the agreed law or, if there is no agreed law, the law in the country where the award was made.
- The respondent did not receive proper notice of the appointment of arbitrators or the arbitration proceedings, or was for some other reason unable to present his or her case.
- The award includes a dispute not contemplated by or which was not part of the parties’ request for arbitration, or the award includes decision in a matter outside of the parties’ arbitration agreement. However, if a decision in a matter that was included in the mandate may be separated from any that fall outside the mandate, the part of the award containing the decision on the matter falling within the mandate may be recognised and enforced.
- The composition of the arbitration tribunal or the arbitral procedure was not in accordance with the parties’ agreement or, absent such an agreement, not in accordance with the law in the country of the seat of arbitration.
- The award has not yet become binding upon the parties or has been set aside, or the enforcement has been suspended by the foreign competent authority in which, or according to the law of which, the award was made.
Effect of a decision recognising an award
14 What is the effect of a decision recognising an award in your jurisdiction? Is it immediately enforceable? What challenges are available against a decision recognising an arbitral award in your jurisdiction?
If an application for a declaration of enforceability of a foreign appeal is granted by the Svea Court of Appeal, the award is enforceable in the same way as a final and legally binding Swedish judgment, subject to any decision by the Supreme Court upon appeal.
Decisions refusing to recognise the award
15 What challenges are available against a decision refusing to recognise an arbitral award in your jurisdiction?
A decision in relation to a declaration of enforceability of a foreign award may be appealed to the Supreme Court, subject to applicable procedural rules.
Stay of recognition or enforcement proceedings pending annulment proceedings
16 Will the courts adjourn the recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration? What trends, if any, are suggested by recent decisions? What are the factors considered by courts to adjourn recognition or enforcement?
The Svea Court of Appeal may postpone its decision on enforcement if the other party states that a petition has been lodged to set aside the award, or a motion has been submitted for stay of execution with the foreign competent authority of the country in which, or under the law of which, the award was made.
It is not necessary that the petition has been granted, but it must be somewhat probable that the petition may be accepted. When deciding the matter, the court may take into account that there is a general interest in facilitating the enforcement of foreign arbitration awards. (See the Supreme Court’s judgments in NJA 1979 p. 527 and NJA 1992 p. 733. In both these cases, the Supreme Court found that the decision should not be postponed.)
Security
17 If the courts adjourn the recognition or enforcement proceedings pending the annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security? What are the factors considered by courts to order security? Based on recent case law, what are the form and amount of the security to be posted by the party resisting enforcement?
If the court postpones its decision for recognition and enforcement, the court may, upon request from the applicant, order the other party to provide reasonable security – failing which, enforcement would otherwise be ordered.
In the legal literature it is stated that an applicant’s request for security should in general be granted by the court, unless it is exceptionally likely that the foreign authority’s decision will be an impediment to the enforcement (see Stefan Lindskog,
Recognition or enforcement of an award set aside at the seat
18 Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If the award is set aside after the decision recognising the award has been issued, what challenges are available against this decision?
If the award has been set aside by a foreign competent authority in which, or according to the law of which, the award was made, it is not possible to obtain enforcement or recognition of the award in Sweden.
A decision regarding enforcement of an arbitral award may, subject to applicable procedural rules, be appealed to the Supreme Court.
Service
Service in your jurisdiction
19 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction?
There are several ways to serve judicial documents in Sweden, depending on the type of document and the circumstances in the specific case.
A document may for example be served orally, by post, through use of a process server or by publication in a specific magazine. If the defendant is a legal entity, it may be possible to serve a document on the entity by sending it to the registered address. In certain situations, it is possible to serve documents using a simplified means of service.
The procedure for service to be used in a specific case will depend on the circumstances and on the document being served.
Note that not all documents must be formally served upon the other party.
Service out of your jurisdiction
20 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant out of your jurisdiction?
The common law requirement of seeking permission for service out of the jurisdiction has no equivalent in Sweden.
Service of documents on a defendant outside the Swedish jurisdiction may be performed if it is allowed by the other country. It is the law at the place of service that is applicable, provided service is not contrary to the general principles of Swedish law.
Sweden is party to several treaties that allow for service of documents in other jurisdictions. Sweden is, for example, a Member State of the European Union and, as such, is such bound by several rules and regulations regarding service of documents in other EU Member States. One example is the Regulation (EC) No. 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No. 1348/2000. Further, outside the European Union, Sweden is a party to the Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. Furthermore, Sweden has several agreements with the other Nordic countries regarding service of judicial documents.
Several of the above-mentioned agreements include specific requirements regarding the manner and form of service, for example in relation to specific certificates or translation requirements.
Identification of assets
Asset databases
21 Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?
No such database or publicly available register exists. However, companies’ annual accounts are publicly available in Sweden.
Information available through judicial proceedings
22 Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?
All information held by public authorities in Sweden is public, with only limited exceptions. This includes, for example, information on income and ownership in relation to property.
When the Swedish Enforcement Authority is enforcing an award, it will, if necessary, investigate the debtor’s employment and income, and whether the debtor has any assets that may be subject to attachment.
Enforcement proceedings
Availability of interim measures
23 Are interim measures against assets available in your jurisdiction? May award creditors apply such interim measures against assets owned by a sovereign state?
It is possible to seek interim measures against assets. An application for interim measures should be made to the court.
In relation to interim measures against assets owned by a sovereign state, Sweden is a party to several international agreements relating to state immunity.
There is no recent case law in relation to interim measures against assets owned by a sovereign state. In older case law, sequestration orders against assets owned by states have been refused with reference to state immunity (see the Supreme Court’s judgments in NJA 1942 p. 65 and NJA 19452 p. 342). However, in more recent case law about enforcement in general against assets owned by sovereign states, it has been concluded that enforcement in relation to assets belonging to a foreign state is possible if the property is used for a purpose other than a government non-commercial purpose (see the Supreme Court’s judgment in NJA 2011 p. 475). The property must also be located within Swedish territory (see travaux préparatoires, Proposition 2008/09:204 p. 45).
Procedure for interim measures
24 What is the procedure to apply interim measures against assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before applying interim measures? If yes, are such proceedings ex parte?
An application for an interim measure is made to the court, and no prior court authorisation is necessary. In general, the opponent should be given the opportunity to respond to the application. However, if there is an imminent risk in letting the opponent respond, the court may grant the application without giving the opponent that opportunity.
There are a few interim measures available pursuant to Swedish law, including:
- provisional attachment of a person’s property to secure a debt;
- provisional attachment of a specific property if there is a question regarding superior right to the property; or
- other suitable measures to secure the applicant’s right, for example a prohibition order against performance of a specific activity, subject to a default fine.
For an interim measure to be granted, the applicant must deposit security with the court for the loss that the other party may suffer. Such security must normally be provided in the form of a bank guarantee or other similar instrument. If the applicant cannot deposit security and has shown an extraordinary reason, the court may, however, waive the requirement to deposit security. The state, municipalities, county councils and local community organisations are exempted from the requirement to deposit security. If the other party does not accept the security, the security should be examined by the court.
The granted interim measures are executed by the Swedish Enforcement Authority.
Interim measures against immovable property
25 What is the procedure for interim measures against immovable property within your jurisdiction?
An application for interim measures is made to the court. The general rule is that the opponent should be given the opportunity to respond to the application. However, if there is an imminent risk in letting the opponent respond, the court may grant the application without giving the opponent the opportunity to respond.
The granted interim measures are executed by the Swedish Enforcement Authority.
Interim measures against movable property
26 What is the procedure for interim measures against movable property within your jurisdiction?
The procedure as described in question 25 also applies to enforcement measures against movable property.
Interim measures against intangible property
27 What is the procedure for interim measures against intangible property within your jurisdiction?
The procedure as described in question 25 also applies to enforcement measures against intangible property.
Attachment proceedings
28 What is the procedure to attach assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before attaching assets? If yes, are such proceedings ex parte?
The Swedish Enforcement Authority executes the attachment proceedings. Attachment proceedings may take place if there is a writ of execution (e.g., a judgment or an award), if the amount expected from the attachment proceedings after deduction of costs exceeds the debt and if the action is reasonable.
For assets to be attached, they must belong to the debtor. Some assets may not be attached (e.g., clothes and other objects that are necessary for the debtor), if the value is reasonable. Further, attachment on salary may be granted in certain situations.
Attachment proceedings may be executed in the absence of the debtor, if it is not necessary that the debtor is afforded an opportunity to express his or her view on the proceedings.
Attachment against immovable property
29 What is the procedure for enforcement measures against immovable property within your jurisdiction?
The Swedish Enforcement Authority executes the attachment proceedings. Attachment proceedings may take place if there is a writ of execution (e.g., a judgment or an award), if the amount expected from the attachment proceedings after deduction of costs arising exceeds the debt and if the action is reasonable. For assets to be attached, the asset must belong to the debtor.
Immovable property is often sold by public auction. However, in certain situations, an immovable property may be sold privately.
Attachment against movable property
30 What is the procedure for enforcement measures against movable property within your jurisdiction?
The rules as described in question 29 also apply to enforcement measures against movable property.
Movable property is sold either by public auction or in private. Some assets may not be attached (for example, clothes and other objects that are only used for the debtor’s personal use, if the value is reasonable, or other objects that are necessary for the debtor, such as certain furniture, tools, or items with a significant personal value, which would make it manifestly unjust to claim that property.
Attachment against intangible property
31 What is the procedure for enforcement measures against intangible property within your jurisdiction?
The rules as described in question 29 also apply to enforcement measures against intangible property.
Further, tenancy rights or tenant-owner rights to an apartment may be exempted as well as, in certain situations; for example, money up to an amount required for the debtor’s maintenance.
Enforcement against foreign states
Applicable law
32 Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?
Sweden is a party to the Vienna Convention on Diplomatic Relations of 18 April 1961 and the Vienna Convention on Consular Relations of 24 April 1963, which have been incorporated in Sweden as Swedish law. Further, Sweden has ratified the Convention on Jurisdictional Immunities of States and Their Property of 2 December 2004 (i.e., the UN Convention), which has also been incorporated into Swedish legislation. However, the UN Convention and the law incorporating the Convention have not entered into force yet (the Convention will enter into force 30 days after the 30th instrument of ratification, acceptance approval or accession).
Sweden is not a party to the European Convention on State Immunity.
Service of documents to a foreign state
33 What is the applicable procedure for service of extrajudicial and judicial documents to a foreign state?
Service of documents on a defendant outside Swedish jurisdiction may be performed if it is allowed by the other country. It is the law at the place of service that is applicable, if it is not contrary to the general principles of Swedish law.
Sweden is also a party to several international agreements in relation to service of documents, for example as an EU Member State.
Immunity from enforcement
34 Are assets belonging to a foreign state immune from enforcement in your jurisdiction? If yes, are there exceptions to such immunity?
In Swedish case law, it has been concluded that the UN Convention in large part is a codification of customary law.
Swedish case law provides that enforcement in relation to assets belonging to a foreign state is possible if the property is used for a purpose other than a government non-commercial purpose (NJA 2011 p. 475). The property must be located in the Swedish territory (Proposition 2008/09:204 p. 45).
Waiver of immunity from enforcement
35 Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? If yes, what are the requirements of such waiver?
According to the travaux préparatoires on Swedish legislation, it is possible for a foreign state to waive immunity from enforcement in Swedish jurisdiction. Generally, the waiver must be explicit and clear, and an implicit waiver may only be accepted in special circumstances (Proposition 2008/09:204 p. 45).
However, the legal situation in this regard does not seem to be completely clear.
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