COMMERCIAL ARBITRATION IN SWEDEN

International arbitration in Sweden is conducted either as ad hoc arbitration under the Swedish Arbitration Act of 1999 (the SAA) or institutional arbitration under specific rules such as the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (the SCC) or the Rules of Arbitration of the International Chamber of Commerce (the ICC). Subject to parties’ agreement, other rules such as of the UNCITRAL may be applied as well.

The first arbitration legislation was adopted in Sweden as early as in 1887 and although Sweden is not a model law country, the SAA generally follows the UNCITRAL model law and is regarded as a very modern and efficient legislation. Sweden has since long acceded the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Swedish court system provides for efficient procedures in connection with the enforcement of arbitration awards in Sweden.

Sweden is a civil law jurisdiction although Swedish court procedure in some respects shows similarities with the common law tradition. Amongst others, procedure is non-inquisitorial. The principle of “party autonomy” has a strong foothold, and arbitrators decide the case on basis of the rules of law and the pleadings submitted by the parties.

As compared to ad hoc arbitration, institutional arbitration gives higher cost predictability and control, independent control of conflicts of interests and supervision in respect of the time-limits of the arbitration as well as procedural rules which may be of practical importance. Among disadvantages in institutional arbitration are that the parties do not have any influence on the appointment of the chairman, unless otherwise is agreed, risk of a more time consuming procedure and also the administrative fees to the institution.

The SCC Institute upholds a strong position as one of the leading centres for international arbitration. Traditionally, Sweden has been regarded as a neutral jurisdiction for east-western disputes and the SCC arbitration has administrated many disputes involving American, Russian, CIS and Chinese parties. The legal community in Stockholm includes arbitrators of which several are fluent in Russian, and the board of the Arbitration Institute includes American, Russian and Chinese nationals.

The SCC Rules include provisions on consolidation, evidence, interim measures and separate award on advance on costs. The latest version of the SCC Rules, which entered into force in January 2010 provides also for the possibility of appointing a so called emergency arbitrator. The aim is to make it possible for parties to request interim measures before the dispute has been referred to an arbitration tribunal, thus bridging the gap between the rise of a dispute and the referral of a case to the tribunal. The SCC Institute has also rules for expedited arbitrations, special rules for insurance disputes and mediation.

The board of the SCC Institute acts also as appointing authority and takes prima facie decisions on the existence of a valid and applicable arbitration agreement, on advance on costs and on extension of time limits for rendering the award. Unlike the International Court of Arbitration of the ICC, the SCC Institute functions solely as an administrative body and is not a court of arbitration. Thus, the procedure does not include any rules for scrutiny of awards by the SCC Institute, and once the matter has been referred to the arbitral tribunal, the SCC Institute has very little involvement in the proceedings.

Pursuant to the SAA any matter on which the parties may reach a settlement is considered arbitrable. A request for relief may include performance claims, declaratory relief as well as the establishment of facts, contract interpretation and gap-filling. Although the SAA does not provide any time limits for the arbitration, it requires arbitrators to decide cases in a “practical and speedy” manner. In this respect, the SCC Rules provides for a six month time limit for rendering the award.