Judgment of the Supreme Court, 30 April 2019, Case No. T 796-18
Summary: The Supreme Court upheld a judgment by the Svea Court of Appeal, which had partially set aside an arbitral award based on a procedural error that had likely affected the outcome of the case.
Early during the proceedings, the tribunal had issued a procedural order that included a position on the interpretation of the royalty clause in the parties’ agreement. In a partial award rendered nearly two years later, the tribunal found that the royalties under the agreement were to be based on factors other than what it had stated in the procedural order.
The challenging party claimed that the tribunal had committed a procedural error by deviating from its position in the procedural order without informing the parties and providing them with the opportunity to further argue its case. The Court of Appeal had agreed with the challenging party and set aside part of the award.
The Supreme Court agreed, concluding that the tribunal’s deviation from its position in the procedural order constituted a procedural error. The Court also found that the error was of a substantive nature, and that there was a tangible connection between the error and the outcome of the case. Had the tribunal announced in advance that it would re-examine the royalty clause, the challenging party would have further argued this issue. Finally, the Court noted that the challenging party had not caused the error.
The Supreme Court upheld the judgment of the Court of Appeal partially setting aside the arbitral award.