Judgment of the Supreme Court, 20 March 2019. Case No. T 5437-17

Summary: The Supreme Court rejected the challenging party’s application to set aside the challenged arbitral award under Section 34 SAA, finding that the challenging party had not brought such grounds that the arbitral tribunal’s interpretation of the parties’ agreement on dispute resolution could be rejected. The court stated that when reviewing a tribunal’s decision on jurisdiction, regard should be made to the fact that it typically is the tribunal who is best positioned to determine the issue, and that the starting point for the court’s review should be that the tribunal’s interpretation and evaluation of evidence is correct. The tribunal had found that the dispute was covered by the arbitration agreement by applying general principles of contract interpretation.

The Challenging party’s basis for the ground to set aside the arbitral award was that:

• actions related to additional works were not covered by the arbitration agreement;
• the tribunal failed to review a disputed circumstance;
• the tribunal did not give the party an opportunity to sufficiently present its case; and
• the arbitral award was not based on the invoked evidence.

The arbitral tribunal had found that even though the additional works were completed under five separate additional contracts with state court as dispute resolution forum, it did not exclude jurisdiction of the arbitral tribunal under the main contract. In the tribunal’s view the additional works were performed “within the contractual framework between the Parties established by the [main] Contract”. In its evaluation the tribunal noted that the parties must be assumed to have intended disputes to be resolved quickly and in the same forum. Since the parties had chosen arbitration in the Contract, it was deemed to be most in line with the parties’ joint and common intention.

The Supreme Court further found that failure to review a disputed circumstance constituted a procedural error but rejected the action since the effect of the error was not shown to be of any reasonable importance to the challenging party. As to the rest of the grounds, the court stated that the appellant had failed to establish that the tribunal’s dealing with the proceedings and the tribunal’s assessment of the reasons presented by the party when requesting an extension of time was indefensible and that the party had not itself caused its predicament. The court also stated that a rejection of a request directed to the tribunal to appoint its own expert cannot constitute a procedural error, unless otherwise provided for in the arbitration agreement and that the review of the invoked evidence cannot constitute a procedural error or excess of the tribunal’s mandate since it is a question relating to the review of the merits of the case.