Judgment of the Svea Court of Appeal, 13 November 2014, Case No. T 1417-14
Summary:A party sought annulment of an SCC award alleging that the award violated fundamental principles of Swedish law on the protection of property and freedom of contract, since in the award the tribunal had deviated from the conditions agreed by the parties for the transfer of ownership. Swiss law applied to contract, which provided that the buyer would become owner of an amusement ride upon signing an acceptance report and paying full purchase price. Yet, the buyer failed to sign the report. The tribunal regarded such provision as a “reservation of title clause,” which under Swiss law requires to be registered to be valid. The tribunal considered that since the clause had not been registered, it had no effect and thereby the ownership of the ride had been transferred to the buyer,despite its failure to sign the report. The Svea Court of Appeal explained that the travaux preparatoires of the Swedish Arbitration Act indicate that awards are annulled on public policy grounds in highly appalling cases, such as when an award orders somebody to act illegally, or if it disregards a mandatory provision meant for the protection of a third party or of the general interest; and that in doctrine it has been discussed whether in exceptional cases an award could violate public policy if it includes application of the law leading to unreasonable results. The Court considered that the requirement of registration of the clause under Swiss law can’t in and of itself be deemed to violate fundamental principles of Swedish law. The fact that the tribunal concluded that the buyer had become owner, in spite of failing to sign the report, could neither be deemed unacceptable, despite the parties’agreement on the conditions to transfer ownership. The Court concluded that this case was not so exceptional as to constitute an application of the law leading to unreasonable results and thereby the award did not violate public policy.