Judgment in the Svea Court of Appeal, 26 May 2020. Case no. T 1151-19
The parties entered into a share purchase agreement containing an arbitration clause. The parties also entered into a subsequent loan and pledge agreement which, inter alia, contained provisions on payment of the purchase price under the share purchase agreement and the interest thereon. According to the loan agreement, disputes should be settled by public courts instead of arbitration as per the provisions of the share purchase agreement. A dispute arose regarding the aforementioned agreements. In the arbitration, the respondent moved that the arbitral tribunal should dismiss the case since the claimant’s claims were based on the loan agreement, which did not contain an arbitration clause. In the final arbitral award, the tribunal determined that it had jurisdiction except for the claimant’s main interest claim, which was based on the loan agreement.
The respondent to the arbitration challenged the final arbitral award and requested annulment of certain parts of the final arbitral award. The grounds for the challenge were that (i) the arbitral tribunal did not have jurisdiction over the claimant’s specific performance claim since it was based on the loan agreement and was consequently not covered by the arbitration clause of the share purchase agreement and (ii) a procedural error which could be assumed affected the outcome of the arbitration had occurred. The alleged procedural error was constituted by that the respondent had lodged a motion for dismissal of the claimant’s case in the event that the arbitral tribunal would conclude that the loan agreement was valid between the parties. According to the respondent, the tribunal had failed to decide on the motion after it concluded that the loan agreement had been concluded.
The claimant in the arbitration opposed the challenge and argued that it had based its claims on the share purchase agreements, meaning that the arbitral tribunal had jurisdiction to hear the case to the extent it concerned payment liability. Further, the claimant in the arbitration argued that the arbitral tribunal had not reviewed whether the loan agreement, including the prorogation clause, was valid between the parties and that the tribunal therefore had no reason the review the motion for dismissal. Consequently, the claimant in the arbitration argued that no procedural error had occurred.
In its judgement, Svea Court of Appeal found that the relationship invoked by the claimant in the arbitration, which concerned payment of the purchase price under the share purchase agreement, was based on the share purchase agreement. Regarding the alleged procedural error, the Court reviewed this ground even though the applicable time period for invoking new grounds in support of a challenge under the Swedish Arbitration Act had expired since the respondent in the challenge proceedings had not objected that the ground had been invoked too late. Further, the Court noted that the motion for dismissal put forth by the respondent in the arbitration was made for the event that the tribunal would conclude that the loan agreement was valid between the parties. Since the arbitral tribunal had not reviewed the validity of the loan agreement, the Court found that the arbitral tribunal had no reason to review the motion for dismissal and that the alleged procedural error had not occurred.
The court therefore concluded that there were no grounds to annul the arbitral award.