Judgment of the Svea Court of Appeal, 4 December 2014, Case No. T 2610-13
Summary: The claimant sought to annul the arbitration award alleging that the arbitrator had exceeded his mandate by basing the award on legally relevant circumstances that had not been referenced by the parties. The claimant further argued that because the arbitrator had interpreted the parties’ agreement without a mandate from the parties to do so, and without granting the parties the opportunity to present their views on his interpretation, procedural errors occurred that likely affected the outcome of the case. More specifically, the claimant argued that the arbitrator exceeded his mandate by reducing certain “warranties” in the agreement to “provisions” even though the parties agreed that they were in fact “warranties”, and that the arbitrator’s failure to let the parties comment on this interpretation constituted a procedural error. The respondent stated that the parties had not agreed on a specific interpretation of the term “warranties”, and that it was within the arbitrator’s mandate to interpret the term. The respondent further noted that the arbitrator had sent the recitals to the parties for comment, and that neither party had objected to how the arbitrator had understood their cases. The court rejected the claimant’s challenge on two main grounds: First, neither the recitals nor the documentary evidence served to establish that the parties had agreed on an interpretation of the term “warranties”. Therefore, interpreting the agreement in this respect fell within the scope of the arbitrator’s mandate to resolve the dispute between the parties. Second, the Court did not find support for the claimant’s assertion that the arbitrator in interpreting the agreement had considered unreferenced legally relevant circumstances or evidentiary or supporting facts. The court noted that the arbitrator’s interpretation of an agreement is not limited by the parties’ legal arguments. Rather, pursuant to the principle of jura novit curia, the arbitrator must apply the law even if if it has not been referenced by a party.