Judgment of the Supreme Court of Sweden, 14 June 2013, Case No. T 2104-12/NJA 2013 s. 578

Summary: The appellant requested the Supreme Court to revert the judgment of the Svea Court of Appeal, declaring the arbitral award invalid. The appellant maintained that there was no valid arbitration agreement, as one of the parties did not hold the business license required by the applicable law at the time of entering into the contract. The Court explained that when a party is aware of a circumstance or when a party has some evidence that a circumstance is at hand and knowingly neglects to investigate that circumstance, that party must be deemed to have waived its rights to rely on that circumstance. In addition, for a party to successfully challenge an arbitral award based on the invalidity of the arbitration agreement, the party must during the arbitration proceedings raise a clear and separate objection that the agreement is invalid. Here the appellant was suspicious of the lack of a business license and chose not to request the tribunal to order the submission of any possible license. In addition, the appellant failed to clearly and separately object the invalidity of the arbitration agreement during the arbitral proceedings. The Supreme Court deemed that the appellant waived its right to claim the invalidity of the agreement, according to Section 34 of the Swedish Arbitration Act and upheld the judgment of the Svea Court of Appeal.