Judgment of Svea Court of Appeal, 11 February 2015, Case No Ö 4508-14
Summary: The respondent in an ongoing arbitration challenged the arbitral tribunal’s jurisdiction based on Section 2 of the Swedish Arbitration Act. Under the Act, arbitrators may rule on their own jurisdiction, but a party may also bring a positive or negative declaratory claim before a district court to affirm or challenge a tribunal’s jurisdiction. The respondent challenged the tribunal’s jurisdiction on several alternative grounds: (1) there arbitration agreement was not valid or applicable; (2) the arbitration proceedings violated fundamental principles of Swedish law; and (3) certain obligations agreed upon in the arbitration had not been met. The issue before the court was whether grounds (2) and (3) were appropriate under the Act. Overturning the District Court, the Svea Court of Appeal rejected the motion. The court explained that declaratory claims could only be brought based on the validity or applicability of the arbitration agreement. The alternative grounds of the motion were inappropriate because they would require that the court, once it had established the existence of a valid and applicable arbitration agreement, review the tribunal’s jurisdiction on other grounds. Such review, the court explained, may be not be conducted in the context of declaratory proceedings under Section 2 of the Act, but rather in proceedings challenging the final arbitral award. The Court also rejected the argument that the motion could be reviewed based solely on the third paragraph of Section 2 of Chapter 13 of the Swedish Code of Judicial Procedure, which allows for motions of affirmation where there is uncertainty about a legal relationship and that uncertainty is detrimental to the claimant.