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
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.
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.
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).