Judgment in the Svea Court of Appeal, 22 February 2019. Case No. T 8538-17 and T 12033-17
The translation was provided by Mannheimer Swartling.
Summary: The Respondent to the arbitration challenged the separate arbitral award and the final arbitral award. The two challenge cases were heard together by the Svea Court of Appeal. The challenging party requested the court to declare both the separate and final award invalid, and set aside both awards in their entirety.
In relation to invalidity, the party raised issues of arbitrability and public policy. The basis for the challenge ground were the following:
- There was not a valid arbitration agreement;
- The tribunal’s handling of evidence and experts;
- The decision to issue a separate arbitral award, which was not requested by any of the parties, and reopening the arbitral proceedings;
- The tribunal gave instructions to the party-appointed experts on its own initiative and without prior communication with the parties;
- The decision to supplement the award with decision on the pre-award interest claim.
The party opposing the challenge argued that the subject matter was arbitrable and that there was nothing in the case that was manifestly incompatible with the Swedish public order. Additionally, it stated that the challenging party waived its right to object to the validity of the arbitration agreement, since it did not raise this issue in its Statement of Defence, and in any case, the arbitral proceedings were covered by a valid arbitration agreement.
The Court concluded that the arbitral awards were not invalid; the dispute was arbitrable and neither the arbitral awards nor the manner in which they arose was incompatible with Swedish public order.
The Court held that the assessment of whether a certain issue is arbitrable or not shall relate to the substantive disputed issues in the arbitral proceedings. The substantive disputed issues in question were whether the challenging party had breached the investment treaty, if it was liable to pay compensation for such a breach of contract, and if so, with what amount. The Court concluded that these questions were arbitrable.
The Court found that the circumstances invoked by the challenging party could not, as a matter of law, result in the substantive contents of the arbitral awards being contrary to fundamental EU law. The Court compared circumstances of Mostaza Claro ruling and court’s findings in the Achmea ruling and stated that they are incompatible with the present case.
The Court further concluded that the challenging party did not raise any objection in regard to the validity of the arbitration agreement in time in the arbitral proceedings and therefore was considered to have waived its right to raise these objections as per section 34, second paragraph of the SAA.
However, the Court concluded that a minor part of the final arbitral award should be set aside as the arbitral tribunal made an addition to the separate arbitral award too late and therefore exceeded its mandate to that extent.
The remainder of the grounds for the challenge were rejected, inter alia, due to the fact that both parties had the opportunity to present their case, and there were no errors that influenced the outcome of the case.