Judgment of the Svea Court of Appeal, 15 May 2003, Case No. T 8735-01
The appellant challenged an award rendered pursuant a BIT between the Netherlands and the Czech Republic. The appellant challenged the award under Sections 33 and 34 of the Swedish Arbitration Act (SAA), alleging that (1) one of the arbitrators had been excluded from the deliberations; (2) the tribunal failed to apply the law it was obligated to apply according to the BIT; (3) the tribunal lacked jurisdiction due to lis pendens and res judicata; the tribunal exceeded its mandate by (4) applying the concept of “joint tortfeasors”, not submitted by the parties; (5) determining the amount of damages, in violation of the parties’ instructions as to limit the dispute to the existence of liability for damages; (6) applying provisions of the BIT to claims not covered by the arbitration agreement; (7) the appellant also alleged that the award violated Swedish public policy. The Svea Court of Appeal found that (1) the chairman was responsible for issuing the award without unnecessary delay, and it had given the arbitrators reasonable and sufficient time to submit comments. The arbitrator received all essential communications between the other arbitrators and thereby was not excluded of the deliberations; (2) a tribunal exceeds its mandate when it applies a different law in violation of an express choice-of-law provision, or when it makes a baseless interpretation of the choice-of-law clause. The Court explained that the tribunal’s interpretation of the wording of the clause allowed the tribunal to consider other sources of law insofar they were relevant in the dispute; (3) a fundamental condition for lis pendens and res judicata is party identity. Here, the identity of a minority shareholder, albeit a controlling one, could not be equated with the identity of the company; (4) the tribunal did not base the damages liability on the concept of joint tortfeasors. A state may be held fully liable for damages suffered by an investor, notwithstanding that the state is not alone in causing the damage; (5) the appellant waived its right to object excess of mandate. If the appellant considered that the claim raised by the other party was a new claim in excess of the agreement of the parties, it should have raised its objection thereto during the arbitration proceedings; (6) The appellant was barred from appeal under Section 34 of SAA, as during the arbitral proceedings failed to object that the claims fell outside the scope of the BIT and thereby of the arbitrators’ mandate; (7) The appellant failed to show ample reason why the manner in which the arbitral award came about violated public policy. The Svea Court of Appeal rejected the appeal on all grounds and did not leave for review of its judgment by the Supreme Court of Sweden.