New Government Bill Proposing Modernisations in the Swedish Arbitration Act

Introduction

On 4 September 2018, the Swedish gov­ern­ment is­sued a bill with the pur­pose of mod­ernising the Swedish Arbitration Act. The main pur­pose of the pro­pos­al is to make ar­bi­tra­tion in Sweden more ef­fi­cient and avail­able to for­eign par­ties. The new leg­is­la­tion is pro­posed to en­ter in­to ef­fect on 1 March 2019.

An Arbitral Tribunal’s Ruling on Its Competence May Bar a District Court from Ruling on the Same Issue

Presently, an ar­bi­tral tri­bunal may rule on its com­pe­tence to ad­ju­di­cate the ar­bi­tra­tion; ei­ther when the is­sue is raised, i.e. dur­ing the pro­ceed­ings, or when ren­der­ing the award. However, a par­ty to the ar­bi­tra­tion is al­so al­lowed to file a claim for a de­clara­to­ry judg­ment to a dis­trict court re­gard­ing the same is­sue. Accordingly, the is­sue of whether the ar­bi­tral tri­bunal has com­pe­tence to ad­ju­di­cate in the ar­bi­tra­tion pro­ceed­ings may be sub­ject to two si­mul­ta­ne­ous pro­ceed­ings.

The gov­ern­ment pro­pos­es that an ar­bi­tral tri­bunal’s rul­ing on its com­pe­tence shall be a pro­ce­dur­al im­ped­i­ment that a par­ty may in­voke in or­der to pre­vent the same is­sue from be­ing raised in a dis­trict court. Furthermore, the gov­ern­ment pro­pos­es that the de­ci­sion by the ar­bi­tral tri­bunal may be ap­pealed to a court of ap­peal.

Applicable Substantive Law

The Arbitration Act does not con­tain any pro­vi­sions as re­gards what sub­stan­tive law the ar­bi­tral tri­bunal shall ap­ply to the ar­bi­tra­tion. The gov­ern­ment pro­pos­es that a pro­vi­sion is added where­in it is ex­plic­it­ly stat­ed that the ar­bi­tral tri­bunal shall ap­ply the sub­stan­tive law agreed up­on by the par­ties. In the ab­sence of an agree­ment be­tween the par­ties, the ar­bi­tral tri­bunal shall de­cide on what sub­stan­tive law is to be ap­plic­a­ble on the ar­bi­tra­tion.

Challenge of Awards

Legal Grounds

According to the Arbitration Act, an award shall be set aside to the ex­tent that the ar­bi­tral tri­bunal has ex­ceed­ed its man­date when de­cid­ing on an is­sue. A fur­ther re­quire­ment, which has been es­tab­lished by case law, is that to set aside an award on this ground al­so re­quires that it is like­ly that the ex­ceed­ing of the man­date has had an ef­fect on the out­come of the case. The gov­ern­ment pro­pos­es the afore­men­tioned case law to be cod­i­fied in the Arbitration Act.

Time Frame

It is pro­posed that the time frame for fil­ing a claim to chal­lenge an award is short­ened from three to two months.

Presentation of Oral Evidence in English

Arguably the biggest news in the bill is a pro­pos­al to per­mit ex­am­i­na­tion of wit­ness­es in English with­out trans­la­tion to Swedish.

Leave to Appeal in the Swedish Supreme Court

Currently, a court of ap­peal’s judg­ment can­not be ap­pealed to the Supreme Court un­less the court of ap­peal grants per­mis­sion in the judg­ment. The court of ap­peal can­not grant such per­mis­sion par­tial­ly. Consequently, the judg­ment in its en­tire­ty will be sub­ject to pro­ceed­ings in the Supreme Court notwith­stand­ing that there may be on­ly a par­tic­u­lar is­sue that is of in­ter­est to the Supreme Court.

The gov­ern­ment pro­pos­es that a re­quire­ment for leave to ap­peal in the Supreme Court is im­ple­ment­ed. Accordingly, the re­quire­ments for pro­ceed­ings in the Supreme Court would be twofold; first­ly a per­mis­sion to ap­peal must be grant­ed by a court of ap­peal and sec­ond­ly the Supreme Court must grant a leave to ap­peal.

Our Comments

The pro­posed changes are wel­come clar­i­fi­ca­tions and con­sti­tutes rea­son­able mea­sures of mak­ing ar­bi­tra­tion in Sweden more ef­fi­cient. Of par­tic­u­lar in­ter­est are the var­i­ous pro­pos­als of mak­ing ar­bi­tra­tion more avail­able to for­eign par­ties, e.g. to per­mit pre­sen­ta­tion of oral ev­i­dence in English (with­out the need for trans­la­tion to Swedish).