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Commercial Arbitration

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Sweden

Helena Dandenell and Marcus Axelryd
Frank Advokatbyrå AB

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. Sweden is a party to the New York Convention and ratified it without any declarations or reservations.

  3. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  4. Sweden is a party to the Washington (ICSID) Convention.

  5. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  6. The Swedish Arbitration Act (SFS 1999:116) (the Arbitration Act) entered into force in 1999, replacing the 1929 arbitration act.

    The Arbitration Act is not based on the UNCITRAL Model Law. Although clearly influenced by it, there are a few differences in comparison with the Model Law.

    The Arbitration Act applies to all arbitral proceedings taking place in Sweden – domestic as well as international. If the parties have agreed that an arbitral institution should administer the proceedings, the applicable institutional rules may modify or supplement the non-mandatory provisions of the Arbitration Act. Also in ad hoc proceedings, the parties are free to agree on matters, which are not governed by mandatory rules of the Arbitration Act, or not covered by the Act at all.

    The Arbitration Act is currently under review, and the inquiry Chair last year presented a Swedish Government Official Report (SOU 2015:37). The inquiry has particularly been focusing on making Swedish arbitration even more attractive than at present, not just for Swedish actors but also for foreign parties and arbitrators.

    It is proposed that the new legislation should come into force on 1 July 2016, but it is most likely to be delayed. For cases concerning arbitration convened prior to the entry into force, the Inquiry proposes that the old (ie, the now applicable) regulations should apply.

    The answers in this questionnaire are based on the current legislation. Where important changes are proposed in the Inquiry, they will be presented under the relevant questions below. It should be noted that the changes proposed in the Inquiry are still under consideration and may yet be subject to further amendments before approval.

  7. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  8. The Arbitration Institute of the Stockholm Chamber of Commerce (the SCC) is one of the major arbitral institutions worldwide, receiving some 200 international and domestic cases annually.

    The SCC acts as appointing authority under the UNCITRAL Rules and under the Energy Charter Treaty. 

  9. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  10. Yes. International arbitrations are frequently conducted in Sweden under the rules of foreign arbitral institutions including, for example, the ICC.

  11. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
  12. Sweden has no specialist arbitration court. However, challenges are tried by the Court of Appeal within the jurisdiction where the arbitral proceedings were held. Since the majority of arbitral proceedings taking place in Sweden are held in Stockholm, the specific division of the Svea Court of Appeal designated for handling arbitration matters has developed a specialist competence. In this context it could be noted that the Court of Appeal is the first and normally also the last instance trying challenges; according to the Arbitration Act the determination of the Court of Appeal may only be appealed if the Court of Appeal itself decides to grant leave to appeal to the Supreme Court. Such leave will only be granted where it is of importance as a matter of precedent that the challenge is tried by the Supreme Court (Section 43).

    Swedish courts, in particular the Svea Court of Appeal, are familiar with the law and practice of international arbitration, largely due to the practice developed by the SCC. When trying challenges of arbitral awards, Swedish courts tend to give consideration to international rules and practice, such as the IBA Guidelines on Conflicts of Interest in International Arbitration. 

    The Inquiry (see question 3) has proposed that the Svea Court of Appeal should be the exclusive forum concerning applications for setting aside and amending awards, as well as appeals over the arbitral tribunals’ decisions concerning their own jurisdiction. The Inquiry has also proposed a provision stating that, if one party so requests and the other party agrees, English can be used as the language of court proceedings in applications for setting aside an award. 

    Agreement to arbitrate

  13. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  14. In order for an arbitration agreement to be valid and enforceable under Swedish law the parties must have legal capacity to enter into an agreement. There are no formal requirements concerning how the agreement is entered into; the written form is by far the most common, but an agreement to arbitrate could also be concluded orally or by conduct.

    Unless the parties have agreed otherwise, Swedish substantive law applies to the arbitration agreement as such when arbitration takes place in Sweden. The agreement must therefore be valid according to Swedish contract law and, accordingly, it must not be tainted by duress, fraud or other contractual grounds for invalidity.

    An arbitration agreement may cover future disputes, provided that it is pertaining to a legal relationship that is identified and defined in the agreement  (please see question 8 as regards consumer disputes).

  15. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  16. Disputes where the parties cannot reach out-of-court settlements under the applicable substantive law are non-arbitrable. This also applies in respect of disputes where the courts of Sweden have been given exclusive jurisdiction by law.

    It could also be noted that the Arbitration Act does not allow arbitration agreements concerning future consumer disputes. Once such dispute has arisen, however, the consumer is free to agree to arbitration.

  17. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  18. In principle, arbitration agreements are only binding on the parties to the agreement; only in specific circumstances may a third party be bound by an arbitration agreement. For example, in Swedish case law it has been established that in case of universal succession and as a main rule in case of singular succession, any new party will be bound by the arbitration agreement.

    Third parties may not be ordered to join the arbitration process. However, the parties are free to allow third parties to join the proceedings. Such agreement may be entered into in advance as part of the arbitration agreement, or when the question arises during the proceedings. 

  19. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  20. The Arbitration Act does not contain any consolidation provisions. Accordingly, unless the parties agree, arbitral proceedings cannot be consolidated.

    The SCC Rules provide that where arbitration is commenced concerning a legal relationship in respect of which an arbitration between the same parties is already pending under the Rules, the SCC board may upon request by a party decide to consolidate the new claims with the pending proceedings. Such consolidation shall only be decided after consultation with the parties and the tribunal.

    The Inquiry (see question 3) has proposed a new provision regarding consolidation. The new provision would mean that, if the parties agree and it is beneficial to the handling of the dispute, arbitral proceedings may be consolidated, provided that the same arbitrators are appointed in both proceedings.

  21. 11.

    Groups of companies
    Is the 'group of companies doctrine' (or any other basis for piercing the corporate veil) recognised in your jurisdiction?

  22. The ‘group of companies doctrine’ is not recognised as such. Swedish courts have very rarely and only in exceptional circumstances (never in an arbitration context) rendered judgments piercing the corporate veil. A company can, however, under general Swedish contract law principles be considered a party to an arbitration agreement without being the signatory.

  23. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  24. The doctrine of separability has been codified in the Arbitration Act (section 3), which provides that an arbitration agreement shall be considered separate from the main contract when the validity of such arbitration agreement is determined in conjunction with the determination of the jurisdiction of the tribunal.

  25. 13.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?
  26. Under the Arbitration Act, a tribunal may rule on its own jurisdiction to decide a dispute (section 2). However, this does not prevent a party from asking the courts to determine an issue relating to the tribunal’s jurisdiction. Pending the court’s rulings, the tribunal remains free to continue the arbitral proceedings (a party is thus unable to delay the proceedings by requesting a court to determine the tribunal’s jurisdiction).

    A decision by the tribunal, whereby it is determined that the tribunal has jurisdiction to resolve the dispute, is not final and a party reserving its rights may subsequently challenge the decision through the courts. Should the tribunal find that it lacks jurisdiction, and dismiss the dispute through an arbitration award, the Arbitration Act allows a party to apply to the Court of Appeal to have the award amended so as to declare that the arbitration agreement is valid and applicable.

    The Inquiry (see question 3) has proposed changes to the parties’ rights to have the arbitral tribunal’s jurisdiction tried by the courts. The changes would mean that a party wishing to challenge the tribunal’s decision regarding jurisdiction must do so within 30 days from receiving the decision. The Inquiry also proposes that parties’ are to be prohibited from raising declaratory claims concerning the tribunal’s jurisdiction once arbitration proceedings have been convened, except for when the party is a consumer.

  27. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  28. Arbitration clauses are given an extensive interpretation. If the parties wish to have the proceedings and the award confidential, specific provisions to that effect should be included in the arbitration clause since there is no implied obligation of confidentiality.

  29. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  30. Given the absence of records in respect of ad hoc proceedings taking place in Sweden it is difficult to have a precise view as to the frequency of international ad hoc proceedings. However, it is safe to say that international ad hoc proceedings are clearly less common than institutional arbitral proceedings.

    The international ad hoc proceedings taking place in Sweden are commonly governed by the UNCITRAL Rules.

  31. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  32. The rules of the Arbitration Act include no specific provisions on multi-party arbitration. In multi-party agreements, the arbitration clause should therefore include provisions on the constitution of the tribunal and the right to consolidate disputes between several parties.

    The SCC Rules, on the other hand, include provisions dealing with multi-party arbitral proceedings, for example in relation to the appointment of arbitrators.

    The Inquiry (see question 3) has proposed a new provision applicable to arbitral proceedings in which the parties have not decided how the arbitrators are to be appointed and parties on either side of the dispute cannot agree on an arbitrator. In such cases, the district court should, at the request of any of the parties, appoint all arbitrators to the tribunal, notwithstanding any prior selection of arbitrator by one of the parties.

    Commencing the arbitration

  33. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  34. Unless otherwise agreed between the parties, arbitral proceedings commence when the claimant provides the respondent with a request for arbitration. Such request should be in writing. It should contain information regarding the matter to be resolved by the arbitrator(s) and the claimant’s choice of arbitrator (if applicable) (section 19). Should a party fail to comply with these requirements, the arbitral proceedings may still proceed subject to acceptance by the respondent.

    The Arbitration Act contains no specific rules regarding time limits as to when a party is required to request arbitration and limitations of claims is a matter of substantive law.

    Where an interim measure has been decided pursuant to the Swedish Procedural Code or by an emergency arbitrator under the SCC Rules, arbitration must be commenced within 30 days of the date of such decision – otherwise the interim measures cease.

    Choice of law

  35. 18.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?
  36. The Arbitration Act does not contain any rules as to the applicable substantive law. In the absence of an agreement between the parties on the choice of law, the tribunal shall decide what substantive law should apply. The established practice in Sweden has been that a tribunal decides the applicable substantive law based on Swedish choice of law principles, although the trend in international cases is that a tribunal can make the decision by other methods than applying lex arbitri conflict of law rules.

    Under the SCC Rules a tribunal is given discretion, in the absence of an agreement between the parties, to decide the merits of the dispute on the basis of the law or rules of law it considers most appropriate.

    The Inquiry (see question 3) has proposed a provision stating that, in absence of an agreement between the parties, the arbitral tribunal will decide the applicable substantive law, taking account of the legal rules to which the dispute is most closely related. According to the proposal, the arbitral tribunal may only decide ex aequo et bono if the parties have expressly authorised it to do so.

    Appointing the tribunal

  37. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  38. Generally, anyone who is of age and in other respects has full legal capacity may serve as an arbitrator in Sweden and is as such eligible to be selected by a party. There is a general requirement that an arbitrator shall be impartial and independent, failing which the arbitrator is prohibited from participating in the proceedings. A person requested to serve as arbitrator has a duty under the Arbitration Act to inform the parties of all circumstances that may prohibit him or her from serving as arbitrator (section 9).

  39. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  40. Yes. There are no limitations to the rights of foreign nationals in serving as arbitrators, and no specific immigration requirements apply to arbitrators (other than general visa rules, when applicable).

  41. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  42. When a party has failed to make a nomination, or the selection mechanism for some other reason fails, a party may request the district court to appoint an arbitrator.

    In proceedings administered by the SCC where a party fails to appoint an arbitrator within the stipulated time period, the SCC board will make the appointment. In doing so, the board will take into consideration 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 appointed by the SCC shall be of a different nationality than the parties, unless otherwise agreed by the parties or deemed appropriate by the SCC board.

  43. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  44. Arbitrators are not afforded immunity from suit, nor are they immune from being called to give testimony in cases of a challenge procedure before the Court of Appeal.

  45. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  46. The Arbitration Act provides a discretionary right for the arbitrators to require security for the compensation for the arbitrators’ work and expenses (section 38). The SCC may against a fee offer fundholding services in ad hoc arbitral proceedings taking place in Sweden. According to the Arbitration Act, arbitrators may not withhold the award pending the payment of compensation (section 40).

    Under the SCC Rules, the SCC board shall determine an amount to be paid by the parties as an advance on costs, corresponding to the estimated amount of costs for the arbitration calculated in accordance with the Rules. Each party shall normally pay half of the advance on costs but where a party fails to make the required payment, the other party shall be given the opportunity to pay also that amount. If the other party, normally the claimant, makes the required payment, the tribunal may at the request of the paying party render a separate award for the reimbursement of the payment.

    The Inquiry (see question 3) has proposed that the provision in the Arbitration Act prohibiting arbitrators from withholding the award pending payment of compensation be repealed.

    Challenges to arbitrators

  47. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  48. An arbitrator may be challenged on the ground of non-impartiality. According to the Arbitration Act an arbitrator shall be discharged if there exists any circumstance, which may diminish the confidence in the arbitrator’s impartiality (section 8). 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). Where the request is denied, a party may (unless the parties have agreed otherwise) request the district court to discharge the arbitrator. The decision by the district court may be appealed to the higher courts. In SCC arbitrations, the SCC board makes the final decision on arbitrator challenges.

    Swedish courts have considered the IBA Guidelines on Conflicts of Interest in International Arbitration when determining an arbitrator’s impartiality (Supreme Court Case No. NJA 2007 p. 841; AJ ./. Ericsson AB and Case No. NJA 2010 p. 317; Korsnäs Aktiebolag v. AB Fortum Värme are of specific interest).

    Under the Arbitration Act, an arbitrator may also be removed for delaying the arbitration proceedings (section 17). On application by a party, the district court decides on removal of an arbitrator for delaying the arbitration and appoints a replacement arbitrator. The parties may agree that the question of removal shall be conclusively determined by an arbitration institution instead.

    Interim relief

  49. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

  50. Both courts and arbitral tribunals may, at the request of a party, order provisional measures. A court decision on interim measures is enforceable, while an equivalent decision by a tribunal is not. The types of interim relief available include orders to provide security for the claim that is to be adjudicated by the tribunal, seizure of property and orders to undertake or refrain from certain actions.

    Under the SCC Rules, a tribunal may at the request of a party grant any interim measure it deems appropriate. As of 1 January 2010 such interim measures may even be granted prior to arbitration having commenced, or the case having been referred to a tribunal, through the appointment of an emergency arbitrator. The SCC board shall seek to appoint such arbitrator within 24 hours from the request and any emergency decision shall be made within five days from referral to the arbitrator. The SCC Rules also state that a party’s request for interim measures to a judicial authority is not incompatible with the arbitration agreement or the SCC Rules.

    Where the case is of emergency, a court may, as opposed to an arbitral tribunal, decide on a motion for interim relief ex parte.

    The Inquiry (see question 3) has proposed a provision enabling the arbitral tribunal to order a security measure via a special award, if the parties have agreed to this in the arbitration agreement. Such special award would become enforceable, but would also be subject to the regular rules on challenging awards.

  51. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  52. In principle it is not possible for a tribunal (or a court) to order a party to provide security for costs in arbitral proceedings (please see question 23 as regards security for the arbitration costs).

    Procedure

  53. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

  54. In the main, the Arbitration Act allows the 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 shall 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 and being 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. Non-Swedish parties may, however, agree to waive in advance the applicability of the grounds for setting aside an award (as regards the distinction, see questions 41 and 43).
  55. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  56. According to the Arbitration Act, if a party, without valid cause, fails to appear at a hearing or otherwise fails to comply with an order of the tribunal, such failure shall not prevent the continuation of the proceedings and a resolution of the dispute on the basis of the existing material (section 24(3)). It should be noted that the tribunal is still under an obligation to consider the case as if both parties were actively engaged in the arbitral proceedings. A respondent’s failure to appear or to plead may, however, be given evidentiary weight. 

  57. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?
  58. There are no restrictions as to the types or form of evidence. Accordingly, unless the parties have agreed otherwise, they are free to present any and all evidence on which they wish to rely, such as written evidence, witness examinations, expert witnesses and legal opinions. The tribunal may refuse to admit evidence clearly being irrelevant, or if such refusal is justified having regard to the time at which the evidence is offered.

    Witness examination without the provision of witness statements would be the common practice in domestic arbitration, whereas in international arbitration witness statements are frequently used.

    The parties may agree that the IBA Rules on the Taking of Evidence in International Commercial Arbitration should apply. Absent such agreement, the IBA Rules commonly serve as guidance in international arbitration proceedings.

  59. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  60. If a party wishes to examine a witness or an expert under oath, or if a party or other person is ordered to produce documents or objects, the party may, after having obtained the consent of the tribunal, submit an application to the district court. The tribunal shall consent to such application if it considers the measure to be justified having regard to the evidence in the case. The tribunal may also refuse consent if the party’s request is considered to have been made too late in the proceedings.

  61. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  62. The Arbitration Act provides that a tribunal may, at the request of a party, order the other party or a third party to produce documents that may be of evidentiary value. A tribunal is thus given considerable discretion. Under the SCC Rules, a tribunal may draw such inferences as it considers appropriate when a party without showing good cause fails to comply with any procedural order – such as a document production order – given by the tribunal. The IBA Rules on the Taking of Evidence in International Arbitration commonly serve as guidelines in matters of document production in international arbitrations taking place in Sweden.

    If a party refuses to provide the documents as ordered by a tribunal, the other party may request that the district court orders the production. Production orders by a court are enforceable and may be sanctioned by fines.

  63. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  64. Unless otherwise agreed and when one party so requests, an oral hearing on the merits shall be held.

  65. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?
  66. Yes. Hearings and procedural meetings may be conducted outside Sweden. If the parties have agreed on a seat of arbitration in Sweden, the Arbitration Act applies and the Swedish courts are deemed to have a judicial interest in the case. This was ruled by the Supreme Court in Case No. NJA 2010 p. 508; The Russian Federation v RosInvestCo Uk Ltd – thereby overturning the much debated Titan case from the Svea Court of Appeal (Case No RH 2005:1).

    Award

  67. 34.Majority decisions
    Can the tribunal decide by majority?
  68. Unless the parties have agreed otherwise, the tribunal may decide by majority. Contrary to the Model Law, the Arbitration Act provides that where no majority is attained for any decision, the opinion of the chairman shall prevail (section 30).

  69. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  70. Provided that the dispute is arbitrable, a tribunal may, within the scope of the arbitration agreement, grant any remedy or relief available to the courts.

  71. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  72. Dissenting opinions are permitted, but occur relatively rarely.

  73. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  74. The award shall be made in writing, and be signed by the arbitrators. The Arbitration Act provides that if not all arbitrators have the possibility to sign the award the signatures of the majority of the arbitrators are sufficient, provided that the reason for only the majority signing the award is set out therein (section 31). The parties may agree that the chairman of the tribunal shall sign the award alone.

    The award shall state the date it is rendered and the place of arbitration, but a lack thereof has no effect on the validity or enforceability of the award.

  75. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  76. The Arbitration Act only provides that disputes shall be handled in a speedy manner but does not give any time limits for rendering the award (section 21). The parties, however, are free to agree that an award is to be rendered within a certain time. Under the SCC Rules an arbitral award shall be rendered within six months from the date when the dispute was referred to the tribunal. The time limit may be extended if deemed necessary. 

    Where the tribunal finds that an award contains any obvious inaccuracy as a result of a typographical, computational or other similar mistake, or if the tribunal by oversight has failed to decide an issue which should have been dealt with in the award, it may within 30 days of the announcement of the award, decide to correct or supplement it (section 32).

    Upon request of a party, the arbitrators may also correct or supplement an award, or interpret the operative part of an award, subject to such request being made within 30 days of the receipt of the award. The tribunal’s correction of an award or interpretation of the ruling shall be made within 30 days of receipt by the tribunal of the party’s request. Where the tribunal decides to supplement the award, it shall be made within 60 days (section 32).

    An action to set aside or amend an award shall be brought by a party within three months of the date on which the party received the award or, where the award has been corrected, supplemented, or interpreted pursuant to section 32, within three months from the date on which the party received the award in its final wording. 

    Costs and interest

  77. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the 'loser pays' rule generally apply in your jurisdiction?

  78. The parties are jointly and severally liable to pay compensation to the arbitrators. Unless otherwise agreed between the parties, the tribunal may upon request by a party order the allocation of costs between them.

    The “loser pays” rule has a general acceptance in Sweden, meaning that the losing party will typically bear all costs, including reasonable costs incurred by the winning party. Within the boundaries of the claimed amounts, the tribunal is free to allocate the costs differently from what the parties have claimed.

  79. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  80. Interest issues are considered substantive matters under Swedish law. Under Swedish law, interest will apply to an award, once rendered, unless otherwise agreed between the parties. The default penalty interest rate under the Swedish Interest Act is eight percentage points plus the reference rate established by the Swedish central bank. Interest on the principal claim, accumulated prior to the time of the award, may also be awarded if claimed by a party. Upon a party’s request, the tribunal’s order may also include interest on the party’s costs, running from the date of the award until payment is made. The arbitrators have a discretionary right to, in the final award, order the parties to pay interest on the arbitrators’ compensation, from the date occurring one month after the date of the announcement of the award.

    Challenging awards

  81. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  82. There are no grounds for appealing an award on the merits of the case.

    According to the Arbitration Act (section 33), an award is invalid if:

    1. the award includes determination of an issue which, in accordance with Swedish law, may not be decided by arbitrators;
    2. the award, or the manner in which the award arose, is clearly incompatible with the basic principles of the Swedish legal system; or
    3. the award does not fulfil the requirements with regard to the written form and signature in accordance with the Arbitration Act (see question 37).

    Further, an award may, wholly or partially, be set aside upon motion of a party (section 34) if:

    1. it is not covered by a valid arbitration agreement between the parties;
    2. the tribunal has made the award after the expiration of the period decided by the parties, or where the tribunal has otherwise exceeded its mandate;
    3. the arbitral proceedings should not have taken place in Sweden;
    4. an arbitrator has been appointed contrary to the agreement between the parties or the Arbitration Act;
    5. an arbitrator did not possess full legal capacity or did not meet the impartiality requirements; or
    6. without fault of the party, if there otherwise occurred an irregularity in the course of the proceedings, which probably influenced the outcome of the case.

    The Inquiry (see question 3) has proposed that the rules on invalidity be repealed. The public policy rule (ie, lack of compatibility with the basic principles of the Swedish legal system) is to become a new possible ground for setting aside the award. The Inquiry has stated that an award that would be considered invalid under any of the other two current grounds for invalidity mentioned above, is in fact per se a legal nullity. It would not constitute an arbitral award at all. The parties’ recourse against such a document should therefore be to raise a declaratory claim with respect to the document's lack of legal force as an arbitral award (see question 42).

  83. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  84. A party may bring an action against an award whereby the tribunal has concluded the proceedings without ruling on the issues submitted to it for resolution (section 36). 

    typically because the tribunal has concluded that it lacks jurisdiction (section 36). Action against such award, if successful, results in the award being amended by the Court of Appeal.

    The Inquiry (see question 3) has proposed a provision stating that parties may bring actions before the district court with respect to whether a document has legal force as an arbitral award.

  85. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  86. Where none of the parties are domiciled or have their place of business in Sweden, such parties may in a commercial relationship through an express written agreement exclude or limit the application of the grounds for setting aside an award set forth in section 34 of the Arbitration Act (section 51). The parties may, regardless of their nationality, exclude the right to bring action against awards by which the tribunal has concluded the proceedings without ruling on the issues submitted to it for resolution (section 36). The invalidity grounds set forth in section 33 are, however, mandatory. 

    Enforcement in your jurisdiction

  87. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  88. If an award has been set aside through a foreign court judgement, the Swedish court – which should have declared the award enforceable (the Svea Court of Appeal) – may refuse enforcement under article V 1 (e) of the New York Convention. This does not mean that the Swedish court has a discretionary right when it comes to enforcement matters; the principle is that an award that has been set aside, shall not be enforced. However, in the unlikely event that a foreign court has set aside an award for reasons, which appear contrary to basic Swedish principles and Swedish public policy (for instance, after the court reviewing the merits of the case) there is a possibility that the award may still be enforced in Sweden. 

  89. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  90. The Swedish courts are familiar with the New York Convention; the enforcement of arbitral awards in Sweden – foreign or Swedish – is not a problematic area. 

  91. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  92. Where the state or state entity in question has accepted the jurisdiction of a tribunal it is in principle not possible for such a state or state entity to raise a defence of state or sovereign immunity at the enforcement stage. Certain assets may, however, be covered by state immunity from enforcement, to the extent that such assets are used, or intended to be used, primarily for state purposes. If property is predominantly used for other purposes, of a commercial nature of otherwise of a non-official nature, the property may be subject to enforcement.

    Further considerations

  93. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  94. The Arbitration Act does not contain any provisions on confidentiality. The Supreme Court has held that, in the absence of an express agreement to the contrary, the parties are under no obligation of confidentiality under the Arbitration Act (see Supreme Case No NJA 2000 p. 538; Bulgarian Foreign Trade Bank Ltd v AI Trade Finance Inc). However, disclosure of information that includes trade secrets, such disclosure may result in a liability for damages under the Swedish Trade Secrets Act. 

    Arbitrators are considered to be obliged to maintain confidentiality by virtue of the nature of their assignment. Arbitrators are thus prevented from revealing information regarding the arbitration, unless both parties agree otherwise. The SCC Rules sets out an explicit provision to this effect (section 46 of the SCC Rules).

    Counsel are also considered to be under a duty of confidentiality, but only in favour of the counsel’s client. The client is therefore in dubio free to relieve the counsel of his or her duty of confidentiality. 

  95. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  96. In the absence of an express agreement between the parties or confidentiality obligations set out in law, no obligations or duties of confidentiality exist between the parties. However, see question 47 above in respect of trade secrets.

  97. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  98. Counsels and arbitrators who are members of the Swedish Bar Association must observe the Bar Association’s Code of Conduct, including a requirement to treat information relating to a client as confidential.

    There is no specific ethical code applying to arbitrators. However, the Supreme Court has in several cases made references to the IBA Guidelines on conflict of interest in international arbitration.

  99. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
  100. Parties are essentially free to agree on how any arbitration in Sweden should be conducted. The procedural tradition of Sweden combines civil and common law practices and it can be argued that Sweden therefore is particularly suitable for international arbitration. The parties themselves control, in principle, the facts and evidence to be introduced, and counsels of the parties conduct examinations of witnesses and experts.

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GAR know-how provides reliable cross-jurisdictional insight to help cement the building blocks of international practice. In this section, select experienced practitioners answer commonly-asked questions for key jurisdictions so allowing readers to be better-placed to solve the challenges of their working days.

Questions

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
  7. Agreement to arbitrate

  8. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  9. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  10. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  11. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  12. 11.

    Groups of companies
    Is the 'group of companies doctrine' (or any other basis for piercing the corporate veil) recognised in your jurisdiction?


  13. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  14. 13.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?
  15. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  16. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  17. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  18. Commencing the arbitration

  19. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  20. Choice of law

  21. 18.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?
  22. Appointing the tribunal

  23. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  24. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  25. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  26. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  27. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  28. Challenges to arbitrators

  29. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  30. Interim relief

  31. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?


  32. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  33. Procedure

  34. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?


  35. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  36. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?
  37. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  38. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  39. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  40. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?
  41. Award

  42. 34.Majority decisions
    Can the tribunal decide by majority?
  43. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  44. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  45. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  46. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  47. Costs and interest

  48. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the 'loser pays' rule generally apply in your jurisdiction?


  49. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  50. Challenging awards

  51. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  52. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  53. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  54. Enforcement in your jurisdiction

  55. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  56. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  57. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  58. Further considerations

  59. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  60. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  61. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  62. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?