Decision of the Svea Court of Appeal, 11 April 2014, Case No. T245-11, T 314-11
Summary: The claimants requested the Court of Appeal to amend under Section 36 of the Swedish Arbitration Act (“SAA”) an award with a negative decision on jurisdiction which dismissed claimants’ claims and to declare that the arbitration agreement was binding and that it covered all parties involved in the arbitration. The claimants alleged that they could suffer a loss of procedural rights if the dismissal decision was not reviewed, as they would be left litigating before Russian and Ukrainian courts. The respondents objected claimants’ request alleging that the arbitration clause contained a valid exclusion agreement, waiving any form of court review of the award, particularly regarding jurisdiction. The arbitration award read “(…) the parties hereby exclude any right of application or appeal to any court and in particular in connection with any question on jurisdiction (…) arising (…) out of the award.” The Svea Court of Appeal explained that the SAA does not contain any explicit provision prohibiting parties to waive Section 36 SAA. Also, Section 51 SAA allows foreign parties to wholly or partially waive the right to challenge an award under Section 34 SAA. The Svea Court referred to the Supreme Court case NJA 1989, p. 143 in which the Supreme Court concluded that it’s valid for foreign parties without connection to Sweden to limit their rights to challenge the award prior to the dispute has arisen. In the opinion of the Svea Court this strongly indicated that parties should also be allowed to agree in their arbitration agreement that a tribunal’s negative decision on jurisdiction shall be final, without the possibility to review the decision under Section 36 SAA (“exclusion agreement”). The Court considered that it is another matter that an award rendered under such an exclusion agreement could be subject to review by challenge proceedings under Section 34 of the SAA. The Svea Court distinguished between a tribunal’s positive and negative decision on jurisdiction. Positive decisions must be subject to some form of review by courts since the consequence is that the jurisdiction of a court is excluded; negative decisions, on the contrary, do not exclude the jurisdiction of the courts. Therefore, the Svea Court found that an exclusion agreement of negative decisions on jurisdiction does not violate the European Convention on Human Rights, as the claimants are not deprived of the possibility of litigating their claims in the courts, being no loss of procedural rights. The Svea Court found that parties are allowed to exclude court review of dismissal decisions with binding effect, as the parties have an interest in finally determining that jurisdiction to try a case on the merits lies not with a tribunal, but with public courts. The Svea Court rejected the claimant’s request but granted leave to appeal to the Supreme Court.