Decision of the Svea Court of Appeal, 2 July 2012, Case No. T 611-11

Summary:The appellant challenged an arbitral award as invalid under Section 33(2) of the Swedish Arbitration Act, due to incompatibly with basic principles of the Swedish and Ukrainian legal systems, and under Section 34 of the Swedish Arbitration Act, due to failure to decide a claim or excess of mandate.  The appellant alleged that the award violated public policy by ordering the appellant to deliver gas in violation of Ukrainian law.  The counterparty objected that the tribunal did not order the appellant to deliver gas but rather found that the appellant had a contractual obligation to deliver gas and was liable for liquidated damages if it failed to do so.  The Svea Court of Appeal agreed with the counterparty and concluded that the award did not violate public policy.  The court noted that international public policy should be applied when assessing the invalidity of an international arbitral award under the Swedish Arbitration Act, which has a narrower scope than the domestic concept.  Because a complete ban on exporting gas from Ukraine did not exist, the tribunal’s determination that the appellant had an obligation to deliver gas did not violate international public policy.  The court also concluded that the tribunal neither failed to decide the claims alleged by the appellant nor exceeded its mandate.  The Svea Court of Appeal dismissed the challenges and affirmed the award in its entirety.