Judgment in the Svea Court of Appeal, 30 June 2022. Case No T 7158-20
In a recent ruling by the Svea Court of Appeal, the Court of Appeal confirmed that the right to an oral hearing under the Swedish Arbitration Act (the “SAA") is technology neutral and allows for remote hearings.
The respondent in the arbitration challenged the final arbitral award and requested that the award should be declared invalid or, in the alternative, set aside, based on the tribunal’s decision to hold a remote hearing against the will of the respondent.
The claimant in the challenge proceedings submitted inter alia that the award, or the manner in which it was rendered, was clearly incompatible with Swedish public policy and therefore should be declared invalid. The claimant argued that i) the tribunal’s refusal to hold an oral hearing and the digital procedure did not guarantee the parties’ right to equal treatment and ii) the principle of party autonomy had been disregarded since the tribunal’s decision to hold a remote hearing put the claimant in the arbitration in a better position than the respondent in the arbitration. In the alternative, the claimant submitted that the tribunal’s decision to hold a remote hearing violated its right to an oral hearing and due process. This was argued to constitute a procedural irregularity which had likely influenced the outcome of the case, why the award should be set aside.
In its reasoning, the Court of Appeal noted that the SAA does not define the term oral hearing and that it follows from the preparatory works that the relevant article - Section 24 of the SAA - is based on the right to a fair trial enshrined in the Swedish Code of Judicial Procedure and the European Convention on Human Rights. Considering the background and purpose of Section 24 of the SAA, the Court of Appeal found that Section 24 is technology neutral and that the provision does not exclude the possibility of remote participation in a hearing. The Court of Appeal made the same finding as regards Article 32 of the SCC Arbitration Rules.
Therefore, the Court of Appeal found that, if not otherwise agreed by the parties, it falls within the mandate of an arbitral tribunal to decide if participants in a hearing shall participate remotely, regardless of party objections to such participation. The Court of Appeal noted that arbitral tribunals should determine if a hearing with remote participation is appropriate on a case-by-case basis, taking into consideration the right of the parties to adequately present their case, the impartiality, efficiency and expeditiousness of the proceedings and that the technical elements must enable adequate communication.
The Court of Appeal found that the award, or the manner in which it was rendered, did not violate Swedish public policy and that there had been no procedural irregularity in the arbitration since the parties had been given adequate opportunity to present their case and the proceedings had been conducted in an impartial, efficient and expeditious manner. Consequently, the Court of Appeal found no reason to declare the award invalid or to set aside the award.
Finally, the Court of Appeal decided that its judgment may be appealed to the Swedish Supreme Court. In order for such an appeal to be tried, the Supreme Court must grant a leave to appeal.
An English translation of the judgement will be published on the Swedish Arbitration Portal shortly.