Decision by the Svea Court of Appeal, 18 May 2018, Case No T 82-16
The Claimant in the arbitration challenged both the Partial Award and the Final Award. The Claimant requested the court to declare both the Partial Award in its entirety, and parts of the Final Award invalid, and as an alternative, set aside.
The Claimant argued that the arbitral awards and the manner in which they arose were manifestly incompatible with the fundamental principles of the Swedish legal system (ordre public) as a result of irregularities by the arbitral tribunal in the course of the proceedings. It argued that the arbitral tribunal wrongfully rejected the Claimant’s motion for document production and then dismissed the case on the ground that the Claimant had not proved its case concerning the legality or illegality of the disputed actions by the host state. Therefore, the Claimant argued that it had not been given a proper opportunity to present its case and that it violated the right to due process.
Additionally, the Claimant raised the following grounds for challenge:
- Claimant’s witness was not heard at the main hearing;
- The arbitral tribunal refrained from determining the issue regarding the ownership of the shares.
The Respondent objected to the challenge grounds invoked by the Claimant, but also raised the issue of inadmissibility of the challenge of the Final Award, arguing that it was not properly submitted to the court.
The court rejected the motion for dismissal by the Respondent since the Claimant had noted in its challenge application of the Partial Award that it would possibly challenge also the Final Award when rendered. The supplement, containing the challenge of the Final Award, was submitted before the court had taken any actions and the summon issued by the court covered both awards. Therefore, the court found that both awards were properly challenged.
The court rejected the challenge in its entirety. The court found that circumstances raised by the Claimant were not of such nature that the arbitral awards or the manner in which they arose could be considered to be manifestly incompatible with the fundamental principles of the Swedish legal system.
Additionally, the court found that the Claimant had not objected to the alleged irregularities made by the arbitral tribunal during the proceedings and was consequently not allowed to invoke the circumstances as a ground for challenging the awards.