Judgment of the Supreme Court of Sweden, 23 November 2012, Case No. T 4982-11

Summary: The appellant appealed to a judgment of the Svea Court of Appeal, alleging that a Swedish arbitral award was invalid, as it resolved non-arbitrable issues breaching Swedish and Russian peremptory laws. The Supreme Court of Sweden rejected the appeal and upheld the judgment of the Svea Court of Appeal. The Court found that a dispute is arbitrable if it relates to matters which the parties may settle out-of-court. The Court explained that arbitrable disputes can include non-arbitrable elements and include the application of peremptory rules of law, as long as these peremptory rules do not prevent the parties from reaching an out-of court settlement. Also, for an arbitral award to be invalid, the peremptory element must be of importance, like when the interest of society or of a third party is concretely involved. Finally, the Court emphasized that when deciding the invalidity of an award, the determining factor is whether the parties could have reached an out-of-court settlement at the time when the dispute was resolved, irrespective of whether the arbitration clause could be deemed in breach of peremptory laws when it was entered into.