1 Legal framework
1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?
Arbitration in Sweden is governed by the Arbitration Act of 1999 (SFS 1999:116). The Arbitration Act governs all arbitrations seated in Sweden and applies equally to domestic and international disputes. The Arbitration Act does not prescribe any particular form for the arbitration agreement. The requirement is that the parties make clear in some way that arbitration has been chosen as the procedure for resolving disputes (eg, by stating that disputes shall be decided in accordance with the Arbitration Act). It is hence theoretically possible to conclude a binding arbitration agreement orally or through conduct. However, in practice, arbitration agreements are concluded in writing.
Any matters on which the parties may reach a settlement is considered arbitrable (see question 8). As further described under question 8, an arbitration clause may be set aside pursuant to Section 36 of the Swedish Contracts Act (SFS 1915:218) if it is considered unreasonable.
The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) is one of the world's leading arbitration institutes and is frequently used for the resolution of national and international disputes. Arbitration proceedings may be administered by the SCC if the parties have agreed that the dispute shall be resolved by arbitration under the SCC Rules, either as part of the arbitration clause or later once a dispute has arisen. As an alternative to the ordinary proceedings pursuant to the SCC Rules, the arbitration clause may refer to the SCC Rules for Expedited Arbitration.
1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?
The legal rules governing arbitration in Sweden are the same for domestic and international arbitration, but some additional rules apply to international arbitration. Domestic and international arbitration are not defined, but the Arbitration Act states that it also applies to disputes with "an international connection". As examples, an international connection might involve the following:
- One or both of the parties are domiciled abroad, or were so when the arbitration agreement was made; or
- The dispute has arisen because of activities abroad.
While there is no special law for cases where one or both parties are domiciled abroad, the Arbitration Act includes a number of rules that apply only to international disputes. One such rule states that the law governing the arbitration agreement shall be Swedish law, unless the parties have clearly and specifically agreed on some other law to govern the agreement. Another rule that applies only to international arbitrations gives parties in a commercial relationship which have no domicile or place of business in Sweden the right to exclude or limit the applicability of the grounds for setting aside an award.
1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?
The Arbitration Act is not based on the UNCITRAL Model Law and does not correspond to it in form. However, in substance, the Arbitration Act is very close to the UNCITRAL Model Law.
1.4 Are all provisions of the legislation in your jurisdiction mandatory?
Some provisions of the Arbitration Act are mandatory, while most are non-mandatory and the parties can, under the principle of party autonomy, agree on the procedure to be followed. The Arbitration Act is not based on any presumption that the rules are mandatory, unless it is expressly indicated that the parties are entitled to make an agreement which overrides the rule. Several sections in the Arbitration Act provide for derogation by agreement between the parties. However, it cannot be inferred from this, e contrario, that other provisions are peremptory. The parties do not have the right to exclude or restrict the applicability of the rules of invalid awards under Section 33. Certain sections of the Arbitration Act guarantee the parties' basic procedural safeguards and provisions of this kind cannot always be changed by agreement between the parties. In some cases, such agreement can be accepted if it does not excessively limit the legal protection which the rule is intended to provide. The parties may not agree on a procedure which is contrary to public policy, due process or natural justice. Swedish parties are further not entitled to enter into exclusive agreements – that is, agreements where they exclude in advance the application of the rules of challenge. Neither can the parties conclude a binding agreement that the arbitration award need not be in writing or signed by the arbitrators.
1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?
The Arbitration Act is undergoing legislative revisions and a proposal in the form of a government bill has been drafted to the Swedish Parliament for decision.. The proposed changes of the legislation include the following:
- that the arbitral tribunal's decision regarding its jurisdiction, where the tribunal finds that it has jurisdiction, may be appealed directly to the court of appeal and may no longer be challenged in the district court;
- measures to improve the procedure for challenging awards, such as that all challenge proceedings will be handled by the court of appeal, and that English may be used if the involved parties so agree;
- that it be possible to consolidate multiple proceedings between two parties in certain circumstances; and
- new provisions regarding applicable substantive law on the matters of dispute.
The new legislation is proposed to enter into force on 1 March 2019.
1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?
Sweden is a party to and has ratified the New York Convention without any declarations or reservations.
1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?
Sweden is also a party to the Washington Convention, the Geneva Protocol of 1923 and the Geneva Convention of 1927.
2 Arbitrability and restrictions on arbitration
2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?
Pursuant to Section 1 of the Arbitration Act, only "matters in respect of which the parties may reach a settlement" may be the subject of arbitration. Thus, a wide interpretation of arbitrability applies pursuant to Swedish law and few matters are excluded from arbitrability. For example, questions regarding forfeiture or other penal consequences of a criminal case and most cases of family law cannot be referred to arbitration. Further, certain issues regarding patent and trademark litigation are not regarded as arbitrable, since they have an effect on third parties. Pursuant to Section 1, paragraph 3 of the Arbitration Act, arbitrators may rule on the effects of competition law as between the parties.
An arbitration agreement referring future consumer disputes to arbitration is not valid. In addition, according to Section 36 of the Swedish Contracts Act, an arbitration agreement may be set aside if it would be unreasonable to uphold it under the particular circumstances of the case. An arbitration clause between a business and a consumer is typically considered unreasonable, according to precedents of the Swedish Supreme Court (eg, see NJA 1981 p 711 and NJA 1982 p 800).
Pursuant to the Labour Disputes Judicial Procedures Act, labour disputes may be referred to arbitration, with certain exceptions. The validity of an arbitration clause in an employment contract must be assessed on a case-by-case basis. The Labour High Court has in precedents established that the mere fact that an employee may incur additional costs in arbitration than in court litigation does not per se render an arbitration clause unreasonable. Other aspects such as the parties' interests in confidentiality and a swift resolution may speak in favour of upholding the arbitration clause – in particular, in relation to executives and other qualified employees.
2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?
No, there are no such restrictions on the choice of seat of arbitration.
3 Arbitration agreement
3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?
The main rule is that the principles of contract law indicate the way in which the parties come to be bound by an arbitration agreement. As stated in question 1, the Arbitration Act does not prescribe any particular form for an arbitration agreement to be valid. There are no formal requirements under Swedish law (eg, written form), but there is precedent for finding that an arbitration agreement exists only if it is clear that the parties have agreed on arbitration and not on any other kind of dispute resolution.
The Swedish courts are generally very arbitration friendly and tend to be reluctant not to enforce an arbitration agreement. When deciding whether a dispute is covered by an arbitration agreement, the court will construe the arbitration agreement following ordinary rules applicable to contract interpretation, assessing, among other things:
- the parties' intentions;
- the literal meaning of the arbitration agreement; and
- other related circumstances.
Arbitration agreements are also subject to the ordinary principles of contract law regarding invalidity due, for example, to duress or incapacity to contract.
3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?
Yes – the doctrine of separability is codified in Section 3 of the Arbitration Act, which states that: "Where the validity of an arbitration agreement which constitutes part of another agreement must be determined in conjunction with a determination of the jurisdiction of the arbitrators, the arbitration agreement shall be deemed to constitute a separate agreement."
3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?
If the parties have not determined the seat of arbitration, the arbitrators shall determine this. The arbitrators may hold hearings and other meetings elsewhere in Sweden or abroad, unless otherwise agreed by the parties.
There are no provisions regarding the language of the arbitration in the Arbitration Act and thus the parties are free to agree which language to apply. However, if the parties have not agreed on the language of the proceedings, the arbitrators shall determine this, further to their obligation to handle the dispute in an impartial, practical and speedy manner. The starting point is that an arbitration in Sweden shall be held in Swedish. Another language may be used if there are particular reasons for this – for example, if the parties have always used another language or are not themselves Swedish.
4 Objections to jurisdiction
4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?
Whether a dispute is arbitrable is considered to be a matter of jurisdiction and such question can be raised by a party before the tribunal or before a court at any time during the proceedings. If such question is to be determined by a court, the arbitrators may continue the arbitral proceedings pending the determination by the court.
4.2 Can a tribunal rule on its own jurisdiction?
An arbitral tribunal may rule on challenges in relation to arbitrability (see above), pursuant to Section 2 of the Arbitration Act. However, its ruling is not final. Thus, a party may institute court proceedings during or after arbitration to have the issue finally decided. If the arbitral tribunal finds that it lacks jurisdiction, it should dismiss the dispute by way of an award. If the arbitral tribunal instead affirms jurisdiction, this finding should take the form of a decision. Such a decision may be challenged before a competent court. If the arbitral tribunal issues an award dismissing the entire case for lack of jurisdiction, such an award may be appealed to the court of appeal within three months.
4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?
Yes – a party can request a court to determine the question of the arbitrators' jurisdiction to decide the dispute in accordance with the above.
5 The parties
5.1 Are there any restrictions on who can be a party to an arbitration agreement?
Any party with legal capacity to enter into a contract may be a party to an arbitration agreement.
5.2 Are the parties under any duties in relation to the arbitration?
Pursuant to the Arbitration Act, the parties shall supply the evidence. The parties are further jointly and severally liable to pay reasonable compensation to the arbitrators for work and expenses. The arbitrators may request security for their compensation from the parties and may fix separate security for individual claims.
5.3 Are there any provisions of law which deal with multi-party disputes?
The Arbitration Act in principle contains no provisions on the subject of multi-party proceedings. The legislature considered it more appropriate to allow the parties agree on multi-party proceedings and the questions associated with such proceedings. In the absence of an agreement, a party generally cannot be forced into proceedings with more than two parties. The Stockholm Chamber of Commerce Rules include provisions regarding multi-party disputes.
6 Applicable law issues
6.1 How is the law of the arbitration agreement determined in your jurisdiction?
Where an arbitration agreement has an international connection, the agreement shall, pursuant to the Arbitration Act, be governed by the law agreed upon by the parties. Where the parties have not reached such an agreement, the arbitration agreement shall be governed by the law of the country in which, by virtue of the agreement, the proceedings have taken place or shall take place.
6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
If the parties have made a choice regarding substantive law, it will be upheld. If there is no agreement regarding choice of substantive law, it will be for the arbitrators to decide. There is no provision in the Arbitration Act regarding the grounds on which the arbitrators shall decide which substantive law to apply to the arbitration. They will typically look at the conflict of laws rules applicable in Sweden. If the proceedings are governed by the Stockholm Chamber of Commerce Rules, the arbitrators need not consider the conflicts of law rules, but can make a direct decision to apply the law that they find appropriate.
7 Consolidation and third parties
7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
The Arbitration Act includes no specific rules regarding consolidation. Multi-party disputes must be resolved by the parties on a contractual basis. Hence, if it is possible to predict that potential disputes could concern multiple claimants or respondents, or relate to several arbitration agreements, the parties should take this into account in the arbitration agreement. The parties may also agree on a solution when a dispute has already arisen, although this is often difficult. The Stockholm Chamber of Commerce Rules include rules on multi-party solutions.
7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
See question 21.
7.3 Does an arbitration agreement bind assignees or other third parties?
As a general rule, the arbitration agreement can only bind the parties to the agreement. In certain situations, however, an arbitration agreement may also become binding on third parties. Examples of when this can be the case include:
- a party voluntarily transferring all of its rights and obligations under a contract including an arbitration agreement;
- a guarantor being bound by an arbitration agreement included in the main contract between creditor and debtor; and
- a bankruptcy estate being bound by the bankrupt debtor's arbitration agreement.
However, the circumstances in each case must be considered and can imply that the third party is not bound by the arbitration agreement.
8 The tribunal
8.1 How is the tribunal appointed?
Unless the parties have agreed otherwise, the default rule pursuant to the Arbitration Act is that the arbitral tribunal shall be composed of three arbitrators, with the parties appointing one arbitrator each and the arbitrators appointed by the parties appointing the chairperson. The parties have considerable freedom to agree on other procedures for appointing the tribunal, within the boundaries of due process and public policy.
The parties are also free to agree on a procedure for the appointment of the arbitral tribunal pursuant to the Stockholm Chamber of Commerce (SCC) Rules. If the parties have not agreed on the procedure or if the tribunal has not been appointed within the agreed timeframe, the SCC Rules provide as follows:
- Where the tribunal is to consist of a sole arbitrator, the parties shall be given 10 days to jointly appoint the arbitrator. If the parties fail to appoint the arbitrator within this timeframe, the SCC board shall make the appointment.
- Where the tribunal is to consist of more than one arbitrator, each party shall appoint an equal number of arbitrators and the SCC board shall appoint the chairperson.
8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
There are no requirements as to the number of arbitrators.
Apart from the fundamental requirements of impartiality (see below), the only formal qualification that applies according to the Arbitration Act is that only people with full legal capacity in regard to their person and property may serve as arbitrators. The tribunal need not include any Swedish citizens.
The SCC Rules provide that when the SCC board appoints arbitrators, it will consider:
- the nature and circumstances of the dispute;
- the applicable law;
- the seat and language of the arbitration; and
- the nationality of the parties.
If the parties are of different nationalities, the sole arbitrator or the chairperson shall be of a different nationality from the parties, unless the parties have agreed otherwise or the SCC board otherwise deems it appropriate.
8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
An award cannot be challenged on the merits. Thus, high standards of objectivity and impartiality must be required of the arbitrators. The Arbitration Act builds on the view that the party-designated arbitrators shall be impartial, as well as the chairperson. Pursuant to the Arbitration Act, an arbitrator shall be discharged at the request of a party if there is any circumstance which may diminish confidence in the arbitrator's impartiality. Such a circumstance shall be deemed to exist where:
- the arbitrator or a person closely associated with him or her is a party to the dispute, or otherwise may expect benefit or detriment worth attention as a result of 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 which is a party to the dispute, or otherwise represents a party or any other person which may expect benefit or detriment worth attention as a result of 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 in the dispute; or
- the arbitrator has received or demanded compensation from one party only.
The purpose of the rules of challenge is to guarantee the arbitrators' impartiality so far as possible.
The arbitrators must immediately disclose circumstances which may constitute grounds for challenge. A challenge of an arbitrator on account of a circumstance set forth above shall be presented within 15 days of the date on which the party became aware both of the appointment of the arbitrator and of the existence of the circumstance.
Pursuant to Section 10 of the Arbitration Act, the challenge shall be adjudicated by the arbitrators, unless the parties have decided that it shall be determined by another party. If the challenge is successful, this decision is not subject to appeal. If the challenge is disallowed, a party may file an application with the district court for the removal of an arbitrator from his or her post. The application must be submitted within 30 days of the date on which the party receives the decision. The arbitrators may continue with the arbitral proceedings pending the determination of the district court.
Pursuant to the SCC Rules, a party may challenge an arbitrator if circumstances arise that give rise to justifiable doubts as to his or her impartiality or independence, or if the arbitrator does not possess the qualifications agreed by the parties. A party wishing to challenge an arbitrator shall submit a written statement to the secretariat of the SCC stating the reasons for the challenge within 15 days of learning of the circumstances giving rise to the challenge. Unless the other party agrees to the challenge, the SCC board will take the final decision on the challenge.
The parties further have the right to have an arbitrator removed for delaying the proceedings. Where an arbitrator has delayed the proceedings, the district court shall, upon request by a party, discharge the arbitrator and appoint another arbitrator. The parties may decide that such a request shall instead be conclusively determined by an arbitration institution.
8.4 If a challenge is successful, how is the arbitrator replaced?
According to Section 16 of the Arbitration Act, if an arbitrator resigns or is discharged, the district court shall appoint a new arbitrator, upon the request of a party. Where the arbitrator cannot fulfil his or her duties due to circumstances which arise after his or her appointment, the party which originally was required to make the appointment shall instead appoint a new arbitrator.
Pursuant to the SCC Rules, the SCC board will appoint a new arbitrator; but if the removed arbitrator was appointed by a party, that party shall appoint the new arbitrator, unless the board otherwise deems it appropriate.
8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?
Pursuant to the Arbitration Act, an arbitrator shall be impartial (see question 26) and the arbitrators shall handle the dispute in an impartial, practical and speedy manner. In doing so, they must act in accordance with the decisions of the parties insofar as there is no impediment to do so.
8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
(a) Procedure, including evidence?
Unless the parties have agreed otherwise, an arbitrator has the power, among other things, to decide on the procedure and timetable of the arbitration. Pursuant to the Arbitration Act, the parties will supply the evidence. However, the arbitrators may appoint experts unless both parties are opposed. The Arbitration Act contains no provisions on the admissibility of evidence. Thus, the parties are free to introduce such evidence as they consider appropriate.
(b) Interim relief?
An arbitral tribunal may, unless otherwise agreed by the parties, decide upon the request of one party that the other party undertake interim measures to secure the disputed claim during the proceedings. An arbitral tribunal may grant interim measures to:
- maintain or restore the status quo pending determination of the dispute;
- take action that would prevent, or refrain from taking action that is likely to cause, imminent harm or prejudice to the arbitral process itself;
- provide a means of preserving assets from which a subsequent award may be satisfied; or
- preserve evidence that may be relevant and material to the resolution of the dispute.
However, orders issued by the arbitral tribunal granting interim measures are not enforceable through enforcement proceedings in Sweden. Further, the arbitration agreement does not prevent the parties – before or during arbitration – from seeking interim measures in court.
(c) Parties which do not comply with its orders?
If a party without legal cause fails to appear at the hearing or otherwise to comply with an order of the arbitrators, this does not prevent the continuation of the proceedings and a resolution of the dispute on the basis of the existing material. This also applies if the respondent's failure to take part in the proceedings is not caused by an effort to obstruct them. The arbitrators have no power to make a summary examination and base a default award on a presumption that the claimant's representation of the facts is correct. Nor do they have the power to dismiss a dispute because one party has failed to plead its case. However, the arbitrators are at liberty to decide on the evidentiary value to be attributed the party's passivity. The dispute will be decided based on the entirety of the evidence presented and after an examination on the merits.
(d) Issuing partial final awards?
An arbitral tribunal may decide part of the dispute or a certain issue that is relevant for final resolution of the dispute in a separate award (sometimes referred to as a partial award), unless both parties object. Separate awards have the same legal effect as final awards, also as regards enforcement. Issues which have been referred to the arbitrators shall be finally decided by an award. Other determinations are designated as decisions. Unless authorised by the parties, the arbitrators may not issue awards for issues concerning interim measures.
(e) The remedies it can grant in a final award?
The only limits on the powers of arbitrators to render appropriate remedies are that the remedy have been requested by one of the parties and that it not contravene public policy in Sweden (see question 38).
If requested by a party, interest may be awarded both for principal claims and for costs. The rate depends on the applicable substantial law.
8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
The respondent often takes a great risk by not participating in the arbitral proceedings, as the arbitrators may deliver an enforceable award despite this lack of participation. A default award cannot be appealed on the merits even in cases where the dispute may have an incorrect outcome merely because the respondent failed to defend itself.
8.8 Are arbitrators immune from liability?
No. An arbitrator may be held liable in damages towards the parties where he or she has acted negligently. This follows from the general rule of liability in Swedish contract law.
9 The role of the court during an arbitration
9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?
If a party initiates court proceedings despite a valid arbitration agreement, the other party can require the court to dismiss the claimant's action in court or to stay proceedings. A jurisdictional objection must be raised at the latest when the objecting party should submit its statement of defence in the court proceedings. Consequently, if the defendant does not invoke the arbitration agreement in its statement of defence or submits its statement of defence after the time stipulated by the court, it is considered to have waived or forfeited its right to invoke the arbitration clause. The court will not consider the arbitration clause on its own initiative.
9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?
As stated in question 14, the arbitral tribunal may decide on its own jurisdiction, but a party is still permitted to petition a court to decide the question definitively. A decision by the tribunal to dismiss a claim without prejudice owing to lack of jurisdiction may, following a challenge of the final award, be revised by the court of appeal. As explained above, a party may have recourse to the courts if its request for the removal of an arbitrator is denied by the arbitral tribunal. The court can then appoint a new arbitrator at the request of a party.
Further, witnesses cannot be sworn in by the tribunal. However, the tribunal can allow a party to petition the district court to hear a witness under oath.
The district court may also assist in the production of documents or other information that can be transferred in writing. A party must first have the arbitral tribunal's permission to petition the court. An order by the district court to produce documents is enforceable. The courts have no general right to intervene in arbitral proceedings.
9.3 Can the parties exclude the court's powers by agreement?
The parties may agree not to apply several provisions of the Arbitration Act. For example, the parties may agree that an arbitration institution and not a court shall determine all questions on the challenge and replacement of arbitrators. However, there are a few mandatory provisions, including the provision that arbitrators are prohibited from using means of compulsion such as to swear somebody in (or to impose fines), and the provisions concerning invalid awards and the setting aside of awards. Further, agreements to exclude or limit the parties' rights to challenge an award are recognised and enforced in Sweden only where:
- none of the parties is domiciled or has its place of business in Sweden;
- the parties' relationship is of a commercial nature; and
- the agreement is in writing.
10.1 How will the tribunal approach the issue of costs?
Unless the parties have provided otherwise, the arbitrators may, at the request of a party, make an order for the distribution of costs between the parties. As a general rule, the arbitrators will follow any agreement of the parties regarding the allocation of costs (see below). If the parties have not made any agreement regarding costs, the general rule, by non-binding analogy from the Code of Judicial Procedure, is that the losing party is liable for its own costs as well as those of the winning party. Exceptions to the general rule may apply in certain situations –for example, where the winning party has negligently brought an unnecessary action or otherwise negligently caused the other party to incur unnecessary costs.
10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
With respect to the distribution of costs, the arbitrators will follow any agreement of the parties. If the parties have not made any agreement regarding costs, the general rule, by non-binding analogy from the Code of Judicial Procedure, is that the losing party is liable for its own costs as well as those of the winning party. Exceptions to the general rule may apply in certain situations – for example, where the winning party has negligently brought an unnecessary action or otherwise negligently caused the other party to incur unnecessary costs.
11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?
There are no restrictions on third-party funding in Sweden. Thus, third-party funding is generally permissible even though the concept is not particularly well known, used or discussed.
12.1 What procedural and substantive requirements must be met by an award?
The award must be made in writing and signed by the arbitrators. It is sufficient that the award is signed by a majority of the arbitrators, as long as the reason why not all arbitrators have signed is stated in the award. It is also possible for the parties to agree that only the chairperson shall sign the award. The award shall state the seat of arbitration and the date on which the award was made. Further, the award should identify the parties and the dispute, and include a clear and definitive decision. Remedies rendered in the award must have been requested by one of the parties and may not be contrary to public policy in Sweden.
12.2 Must the award be produced within a certain timeframe?
The Arbitration Act does not specify a time limit for arbitration. However, it does state that arbitrators shall decide cases in a practical and speedy manner. The Stockholm Chamber of Commerce (SCC) Rules specify a six-month timeframe for rendering the award. For more complex cases, this timeframe is usually extended. Statistics from the SCC Institute show that an award is rendered within 18 months of registration in 80% of all cases and within 12 months of registration in almost 60% of cases.
13 Enforcement of awards
13.1 Are awards enforced in your jurisdiction? Under what procedure?
An award made in Sweden is enforceable in Sweden without a court order or other exequatur, unless the award is of a declaratory nature. If the losing party does not perform voluntarily, the award may be brought before the relevant enforcement authority (Kronofogdemyndigheten) if the winning party is seeking execution of the award in Sweden. An application for enforcement of a foreign award shall be submitted to the Svea Court of Appeal in Stockholm.
A foreign arbitral award will not be valid and enforceable in Sweden if the respondent can prove any of the following circumstances:
- The parties to the arbitration agreement, pursuant to the law applicable to them, lacked the capacity to enter into the agreement or were not properly represented, or the arbitration agreement was not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made;
- The party against which the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present its case;
- The award deals with a dispute not contemplated by, or not falling within, the terms of the submission to arbitration, or contains decisions on matters which are beyond the scope of the arbitration agreement, provided that if the decisions on matters which falls within the mandate can be separated from those which fall outside the mandate, that part of the award which contains decisions on matters falling within the mandate may be recognised and enforced;
- The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
- The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made.
The Svea Court of Appeal may decide to temporarily postpone its decision on enforcement if the opposing party states that it has challenged the award at the seat and requests a stay of enforcement. However, at the request of the applicant, the opposing party may be required by the court to provide security. Regardless of whether security is provided, a parallel procedure may not, as a general rule, imply that the court has postponed the enforcement of an arbitral award, unless it is shown that the challenge is likely to succeed. A foreign award is enforced as a Swedish court judgment, provided that the Svea Court of Appeal has granted an application for enforcement of the award. In general, the procedure before the Swedish enforcement authority described above is applicable to such enforcement.
14 Grounds for challenging an award
14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?
The grounds on which an award may be challenged are set out in the Arbitration Act. Pursuant to Section 34, an award may be set aside if:
- it is not covered by a valid arbitration agreement between the parties;
- the arbitrators made the award after the expiration of the timeframe decided by the parties or have otherwise exceeded their mandate;
- the arbitral proceedings, according to the Arbitration Act, should not have taken place in Sweden;
- an arbitrator was appointed contrary to the agreement between the parties or to the Arbitration Act;
- an arbitrator was unauthorised due to any circumstance set out in the Arbitration Act, such as partiality; or
- there occurred, without the fault of a party, an irregularity in the course of the proceedings which probably influenced the outcome of the case.
An award may further be invalid if:
- the award includes determination of an issue which, in accordance with Swedish law, may not be decided by arbitration;
- the award or the manner in which it arose is clearly incompatible with the basic principles of the Swedish legal system; or
- the award does not fulfil the requirements with regard to the written form and signature pursuant to the Arbitration Act.
Furthermore, a party may request that the arbitrators supplement, correct or interpret the award if it contains an obvious inaccuracy as a consequence of a typographical, computational or similar mistake, or if the arbitrators by oversight failed to decide an issue which should have been dealt with in the award.
14.2 Are there are any time limits and/or other requirements to bring a challenge?
A challenge must in most cases be brought within three months of the date on which the party receives the award. Where supplementation, correction or interpretation of the award has taken place, the challenge must be brought within three months of the date on which the party receives the award in its final wording. A party challenging an award may not rely on a circumstance to which it should have objected during the proceedings.
A request by a party for the arbitrators to supplement, correct or interpret the award must be put forward within 30 days of announcement of the award.
14.3 Are parties permitted to exclude any rights of challenge or appeal?
For non-Swedish commercial parties, the Arbitration Act provides the opportunity to enter into an express written agreement whereby the parties waive, in advance, their right to challenge the award as set forth in Section 34 of the Arbitration Act. The agreement must be sufficiently specific and clear in order to be effective.
15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?
Swedish law does not prescribe any duty of confidentiality covering the parties to an arbitration. Thus, unless the parties have agreed on confidentiality, each party may decide to make disclosures about the arbitration in relation to third parties.
Arbitrators are under a duty of confidentiality and may not make any disclosures in relation to the arbitral proceedings or the award. This also applies to the Stockholm Chamber of Commerce (SCC) Institute if the arbitration is conducted under the SCC Rules.
15.2 Are there any exceptions to confidentiality?
If the parties have agreed on confidentiality, they may also add explicit exceptions to this. If no such exceptions have been agreed, there may be reasons to exclude certain information from the agreed duty of confidentiality pursuant to legislation or general principles of law. This includes where information is revealed in order to comply with a duty to inform stipulated in law (eg, the duty to witness). Consent from both parties is also an exception to the duty of confidentiality. Further, information which is public knowledge is not covered by the duty of confidentiality.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.