Judgment in the Svea Court of Appeal, 26 February 2018. Case No. T 6582-16

Summary:  The Claimant in the arbitration challenged the arbitral award claiming that the award should be (i) declared wholly or partially invalid, pursuant to item 2 of the first paragraph of Section 33 of the Swedish Arbitration Act (1999:116); (ii) wholly or partially annulled pursuant of Section 34 of the Swedish Arbitration Act or (iii) wholly or partially adjusted, pursuant to the first paragraph of Section 36 of the Swedish Arbitration Act. The Claimant commenced arbitration pursuant to Article 26 of the ECT against the Respondent claiming that the Respondent violated their obligations under article 10 and 13 of the ECT by unlawfully expropriating the Claimant’s investment. The Respondent objected and argued that the Claimant should not be considered as an investor under the articles of the ECT.

In challenging the Award the Claimant argued that he should have be considered as an investor under the article 1(7)(a)(i) of the ECT due to the fact he was  permanent resident of a contracting state at the time of the investment, irrespective of the fact that he was a citizen of the Respondent.

The Claimant further argued that the arbitral tribunal exceeded its mandate or committed a procedural error by misinterpreting Article 1(7)(a)(i) of the  ECT

Lastly, pursuant to Section 33 of the Swedish Arbitration Act the Claimant argued that the tribunal violated fundamental principles of Swedish law by providing the parties with contradictory information failing to inform the parties of the tribunal’s changed views during the course of the arbitration. Additionally the circumstances referenced by the Claimant as grounds that the arbitral award should be set aside included; that the arbitral award was not given in due time, that the arbitral tribunal tried an issue on the merits within the scope of its jurisdictional review, that the arbitral tribunal provided contradictory information to the parties and thereby deprived him of the right to argue his case to any reasonable extent, that the arbitral tribunal failed to review his assertions that he was permanently residing in the UK during 1996-2000, that he was not allowed to reference additional information following the closing of the arbitration proceeding and that the arbitral tribunal dismissed his motions for an additional award.

The Respondent claimed that the arbitral tribunal had acted entirely in accordance with the arbitration agreement, the applicable rules and the law. Furthermore, the Respondent argued that the arbitral tribunal rendered the award in time as an extension of time had been granted.

The Court dismissed the challenge in its entirety. The Court first tried the motion of invalidity under Section 33 in the Swedish Arbitration Act. The Court noted that the possibility of having an arbitral award declared invalid is very limited finding that the circumstances presented by the challenging party were not of the nature which would lead to invalidity of the award. 

The Court considered the question of adjustment under Section 36 of the Swedish Arbitration Act. The Court found that in the circumstances of this case there was no reason to adjust the award.  Additionally the Court found that although the challenging party is a resident of a contracting state, he was not entitled to commence the relevant arbitration against the Respondent since the Claimant holds a citizenship in that country.