Judgment in the Svea Court of Appeal, 20 June 2016, Case No. T 6-15

Summary: The arbitral tribunal had dismissed the arbitration under Section 38 of the Swedish Arbitration Act, without deciding the dispute on the merits, on the grounds that the claimant had failed to pay security for costs as requested by the tribunal. In the award, the tribunal also made claimant liable for the arbitrators’ fees and respondent’s legal costs. The claimant challenged the award, alleging that the arbitral tribunal had lacked grounds to terminate the proceedings and to allocate costs as it did between the parties. Claimant further requested that the challenge proceedings be stayed pending the outcome of a review of the arbitrators’ fees by the Stockholm District Court. The Court of Appeal denied the challenge in full. The court noted that Section 38 entitles arbitrators to close the proceedings if requested security is not provided, and that the arbitrators in the present case had deemed additional security necessary. The court concluded that the tribunal’s decisions under Article 38 were not eligible for the court’s review; the compensation to arbitrators can be reviewed only by a district court, pursuant to Section 41 of the Act. Finally, the court also dismissed claimant’s request to annul the tribunal’s decision on the allocation of costs, as the circumstances presented no valid grounds for challenge under Section 34. The Court of Appeal granted leave to appeal the decision to the Supreme Court.