Judgment of the Court of Appeal for Western Sweden, 27 February 2015, Case No. T 4028-13
Summary: The claimant requested that the Court annul certain items of the arbitral award because the arbitral tribunal had exceeded its mandate by going beyond the parties’ motions and by considering circumstances not referenced by the parties. More specifically, the Claimant complained that the arbitrator allocated litigation costs in a manner that did not correspond to the parties’ claims for compensation, and that he had settled an issue in dispute by citing the general legal principle that a party may not benefit from its own breach of contract – a principle not referenced by the parties. The respondent opposed all grounds for challenge pleaded by the claimant. The Court of Appeal rejected the challenge in its entirety. First, the Court explained that arbitrators shall ex officio decide on the allocation of litigation costs within the boundaries of the claimed amounts, and that a party’s claim for compensation does not preclude the arbitrator from allocating the amounts differently. Second, the Court noted that an arbitrator is entitled (and also obliged) to apply legal rules which have not been referenced by the parties, and that doing so does not mean that he exceeds his mandate.