ICCA’s Focus on Sweden is a one-stop collection of the arbitration materials from Sweden published by ICCA. It includes, among others, all arbitral awards rendered under the auspices of the Arbitration Institute of the Stockholm Chamber of Commerce, all Swedish court decisions applying the 1958 New York Convention published in the Yearbook Commercial Arbitration, and the National Report Sweden published in the International Handbook on Commercial Arbitration.
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Sweden might be small measured by geography but what happens in Swedish arbitration matters for a large portion of practitioners worldwide. This is why we are so grateful for ICCA’s Focus on Sweden.
Annette Magnusson
Annette Magnusson
International arbitration is part of a transnational justice system. But it still depends on practices rooted in real-world places. Some of them, like Sweden, do more than control the impact of arbitration on public policy. They contribute to the development of standards and best practices for international arbitration worldwide.
Stephan Schill
Stephan Schill

I. Published in the Yearbook Commercial Arbitration

A. Awards

1. Ad Hoc

  • July 1966 (Dutch shipbuilder v. Swedish buyer (M/V MARE LIBERUM))
    Yearbook I (1976) p. 141 
    seat of the arbitration: Sweden
    • conflict of laws rules of the seat of arbitration determine applicable law to substance
    • applicable law to substance and choice of seat of arbitration

2. Arbitration Institute of the Stockholm Chamber of Commerce (SCC)

  • 17 July 1992, Interim award and 13 July 1993, Final award
    Final award, Yearbook XXII (1997) p. 197 
    seat of the arbitration: Stockholm, Sweden
    • optional procedure prescribed in arbitration clause
    • failure to attempt friendly consultations
    • default of party in arbitration·
    • liability for breach of contract
    • termination of contract
    • calculation of yearly loss of profit
  • Final award in case no. 73/2011
    Yearbook XXXVIII (2013) pp. 228-252

    seat of the arbitration: Berlin, Germany
    • termination of contract
    • obligation to repurchase stock
    • United Nations Convention on Contracts for the International Sale of Goods (CISG) Vienna 1980
    • agent
    • filling of gaps in contract
    Manufacturer terminated its contract with a distributor, which it had performed through an affiliate company. The arbitrators found that the affiliate company had acted as an agent and therefore the dispute fell within the arbitration clause in the contract between manufacturer and distributor. Termination involved under the terms of the contract repurchase by manufacturer of stocked products. The tribunal held that no separate agreement in writing and separate signature of the repurchase obligation were required under the contract. Further, even if there had been a provision requiring the written form and a signature, manufacturer could not rely thereon as under the CISG – which applied because it was not excluded by the contract or other stipulation – distributor relied on manufacturer’s conduct in declaring the contract terminated and its concomitant promise to take back all “good” stock against payment. The arbitrators then held that the terms of the repurchase obligation (price and quantity) were sufficiently defined to permit the tribunal to fill in the missing detail, namely the discount, if any, that would take into account some of the products’ unsuitability for repurchase. The arbitral tribunal granted the lower discount admitted by distributor, as manufacturer failed to prove the higher discount it was seeking.
  • Final award in case no. 158/2011
    Yearbook XXXVIII (2013) pp. 253-274 
    seat of the arbitration: Stockholm, Sweden
    • breach of exclusivity obligation
    • (brutal) termination of contract
    • notice of termination of contract
    • mandatory law of third country
    Manufacturer did not breach an obligation of exclusivity by failing to prevent sales of the products in the territory by foreign distributors: there was no such obligation under the agreement between the parties and, given the structure of the supply of the relevant products, the products could easily have been marketed in the territory without any direct involvement of Manufacturer. Termination was given in compliance with the contractual requirement of a six-month notice and was not “brutal” within the meaning of a provision of the French Commercial Code, which as a provision of mandatory law was to be applied by the arbitrator even if the law applicable to the merits of the dispute was Swedish law.
  • Final award in case no. 2015/078, 27 May 2016
    Yearbook XLV (2020) pp. 74-83 
    seat of the arbitration: Stockholm, Sweden
    • lump sum price contract
    • burden of proof
    • prolongation costs
    • disruption costs
    • testing costs
    • currency fluctuation
    • calculation of escalation
    • scope of arbitration agreement
    • delay damages
    • storage costs
    • apportionment of legal costs
    • reasonable legal costs
    • consolidation of arbitrations
    • choice of English law as governing law
    The award concerned the burden to prove the right to payment of additional amounts under two contracts. The arbitral tribunal decided on the claims under two separate contracts between the parties in consolidated proceedings. In respect of the lump sum price provided for certain work in the General Services Contract, the tribunal found that the respondent was liable to pay an additional amount to the claimant. Conversely, it dismissed most of the claimant’s claims for further additional payments, mainly for failure to meet the required burden of proof as to the circumstances that could justify such additional payments. The tribunal found, among other things, that the claimant was not entitled to additional payments based on the contract’s prolongation, for disruption costs, for additional testing costs allegedly falling outside the original scope of works, for currency fluctuation and for escalation. The arbitral tribunal instead granted the respondent’s counterclaims for overpayments, to the extent that such amounts were not agreed: both parties had accepted that the accuracy of the costs included in the relevant payments would be agreed at a later date, and both parties had accepted that the relevant payments could be revisited until the final account was signed. The arbitral tribunal then found that it had jurisdiction over the claimant’s claim in respect of work carried out but not paid for under the second contract – the Elements Contract; however, it denied jurisdiction over some claims for interest raised by the claimant on allegedly delayed payments of invoices, holding that it was unable to determine to which contracts, or service orders, the work covered by some of those invoices related. The tribunal then dismissed most of the claimant’s claims for further additional payments under the Elements Contract, mainly for failure to meet the required burden of proof as to the circumstances that could justify such additional payments. It found, among other things, that the claimant was not entitled to additional payments for further work it allegedly carried out, for alleged underpayments, for some additional costs, for delay damages, for interest on some delayed payments, for escalation, for storage costs and for currency fluctuation/devaluation. The arbitral tribunal instead granted the respondent’s counterclaims under the Elements Contract for overpayments and return of borrowed equipment, while it dismissed the respondent’s counterclaims for liquidated damages and costs it would have incurred to complete the works covered by the Contract. Taking into account the outcome of the dispute and the procedural conduct of the parties, the tribunal directed the claimant to bear 90 percent of the costs of the arbitration. As to the parties’ legal costs, it found that 75 percent of the total legal and other costs claimed by the respondent was reasonable and that the respondent was entitled to reimbursement from the claimant of 90 percent of that figure.
  • Final award in case no. 2016/047, 31 March 2017
    Yearbook XLV (2020) pp. 84-92 
    seat of the arbitration: Stockholm, Sweden
    • interpretation of contract
    • non-compete clause
    • trademark violations
    • confidentiality clause
    • liability of company for actions of natural person owner
    • proof of loss
    • calculation of loss
    • general damages under Act on Protection of Trade Secrets (Sweden)
    • application of Swedish law rule on damage assessment
    • discretion of arbitrator(s) to assess damages
    • notice of breach of contract
    • choice of Swedish law as governing law
    • applicable law to procedure is law of place of arbitration (Swedish law)
    The award found, as a matter of contract interpretation, that the non-compete clause in a contract for the sale and purchase of shares applied, and that its breach led to a reduction of the purchase price and an obligation by the party in breach to pay damages. The sole arbitrator denied the claimant’s (seller) claim for payment of the outstanding contract price for the sale of shares in a Company, and granted the respondent’s (buyer) counterclaim for damages. The arbitrator applied both procedural and substantive Swedish law, the former as being the law of the seat of the arbitration, and the latter as being the law contractually agreed by the parties The arbitrator found that the breach of the non-compete clause in the shares purchase agreement (SPA) by the seller company had caused damages to the buyer; since those damages exceeded the outstanding purchase price, and the SPA provided that any amount payable to the buyer as a result of a claim was to be treated as a reduction of the purchase price, no amount was owed to the seller, which also had to pay damages to the buyer. (1) The sole arbitrator found that, as a matter of contract interpretation, the non-compete clause in the SPA applied, because its wording clearly indicated that it became applicable from the moment the SPA was signed – not, as argued by the seller, after the end of the three-year transitional acquisition period. The clause, however, bound only the seller company; it did not bind the natural person owning the seller company. Further, the seller could not be held accountable for its owner’s actions. On the merits, the arbitrator held that the seller had breached the non-compete obligation by registering a trademark bearing similarities to the products of the Company purchased by the buyer, by marketing competing products under that trademark from its URL, and by transferring the trademark and the domain name to a third company. (2) The sole arbitrator reached a different conclusion in respect of the alleged breach by the seller of the confidentiality clause in the SPA. He found, as a matter of contract interpretation, that the clause applied and was binding only on the seller; on the merits, he concluded that the buyer had failed to establish a breach by the seller. (3) As a consequence of the seller company’s breach of the non-compete clause, the buyer had the right to claim reduction of the purchase price under the SPA. In order to establish this right, the buyer had to show that either the Company or the buyer had suffered losses because of the seller’s breach, and that none of the defences invoked by the seller applied. As to the proof of damages, the arbitrator found: (i) preliminarily, that he could apply by analogy the legal principle set forth in the Swedish procedural code RB 35:5 – according to which a court of law had the power to assess the extent of damages to a reasonable amount in cases where the party seeking compensation was unable to present full proof of the amount of losses suffered, or where such proof could be produced only with difficulty – as this principle was not strictly specific to Swedish court proceedings but rather expressed a general legal principle, serving an important function by attenuating the otherwise strict approach denying damages to a claimant for failure to furnish “full proof” of the extent of damages sought; and (ii) on the merits, that the buyer was entitled to damages: for losses due to the sales by the third company of products similar to those sold by the Company; for losses due to the sales lost by the Company when its distributors and retailers decided to replace it as a supplier with the third company; for loss of value of the Company; and for “general damages” under the Swedish Act on Protection of Trade Secrets. In respect of this last item, the arbitrator denied the seller’s jurisdictional objection, finding that he had jurisdiction under the broad wording of the arbitration clause in the SPA. As to the defenses raised by the seller, the sole arbitrator (i) rejected the objection that the buyer had not met the requirement for the notification of claims under the SPA, finding that the buyer had given the seller prompt and sufficient information on the basis and nature of its claims; on the basis of his earlier findings, (ii) rejected the objection that the individual losses suffered by the Company or the buyer did not exceed the minimum for which the seller was liable under the SPA; and (iii) rejected the objection that the seller should be liable for any loss solely pro rata to the Company’s shares it had sold, reasoning that such reading of the relevant provision in the SPA would be so unusual and unreasonable that the seller bore the burden of proving that this was indeed the joint intention of the parties. The seller had not discharged such burden. (4) The sole arbitrator granted interest on the principal amount, and ordered the seller to bear the costs of the arbitration and reimburse the buyer for its legal costs, together with interest.
  • Final award in case no. 2017/058, 5 April 2018
    Yearbook XLV (2020) pp. 93-97 
    seat of the arbitration: Stockholm, Sweden
    • CIP (Carriage and Insurance Paid To) terms
    • obligations under CIP supply contract
    • United Nations Convention on Contracts for the International Sale of Goods (CISG)
    • liability for demurrage and detention costs
    • doctrine of group of companies
    • breach of contract by refusal to take delivery of goods
    • mitigation of damages
    • calculation of damages
    • applicable law as to interest
    • starting date of interest
    • pre-award and post-award interest
    The award, which concerned a claim for demurrage and detention charges incurred when the buyer refused to accept a delivery of goods, rejected the attempt of the buyer to explain its failure in the context of its relationship with various entities in the group of the seller; the arbitrators also found that the claimant seller did not accept the jurisdiction of an institute other than the SCC by citing a meeting of the shareholders of the respondent which had authorized application to a different arbitral institute to conduct an independent legal evaluation of the situation between the parties. The arbitral tribunal ordered the buyer to reimburse the seller for the demurrage and detention charges the seller had paid to the carrier; these charges had been incurred when the buyer had refused to timely accept delivery of the goods sent through the carrier pursuant to CIP supply contracts between the parties. The supply contracts were governed by the CISG and residually by Swedish law. (1) The tribunal dismissed the buyer’s claim that the SCC proceedings should be terminated because the seller accepted to refer the dispute to a different arbitral institute by citing in its pleading an excerpt of the minutes of a meeting of the shareholders of the buyer in which the buyer’s director was authorized to apply to a different arbitral institute to conduct an independent legal evaluation of the situation. The tribunal noted that the seller had merely reflected in its pleading what had been said in the minutes. (2) The arbitral tribunal dismissed the buyer’s claim that, based on the group of companies’ doctrine, the seller was liable for the (in)actions of other companies in its group, explaining that neither the CISG nor Swedish law made provision for such doctrine and that in any event the tribunal did not have jurisdiction to determine disputes between the buyer and other companies in the seller’s group. (3) The arbitral tribunal dismissed the buyer’s claim that the legal opinion it had provided in support of its claim that it was not liable to pay the demurrage and detention charges was binding on both the buyer and the seller, finding that the seller, which was not a shareholder of the buyer, had not been present at the shareholders’ meeting in which it was decided to seek this legal opinion, and had not been involved in its making in any way. (4) The buyer’s claim that all supply contracts between the parties were to be considered as one also failed, since the tribunal found that they were clearly separate contracts. Arguments as to their interrelationship within a wider plan were irrelevant. (5) Proceeding to the merits of the case, the tribunal first examined the parties’ obligation under a CIP contract, and then held that the seller had proved that it had discharged its duties under the contracts; that the demurrage and detention charges flowed directly from the buyer’s breaches; that the seller had proved that it had paid the demurrage and detention charges in dispute; that there was a direct causal link between the breaches and the loss caused by the demurrage and detention charges; and that the seller had mitigated its losses by obtaining a significant discount on the demurrage and detention charges from the carrier. Hence, the buyer was liable to pay such charges as damages for breach of the supply contracts. (6) The tribunal granted the seller’s claim for interest and post award interest.
  • Final award in case no. 2017/134, 23 April 2018
    Yearbook XLV (2020) pp. 98-101 
    seat of the arbitration: Stockholm, Sweden
    • termination of contract due to event of default
    • calculation of liquidated damages
    • public policy and bankruptcy of party
    • duty of arbitrators to render enforceable award
    • choice of English law as governing law
    The award denied the argument that the tribunal’s duty to render an enforceable award prevented it from awarding the relief sought by the claimant, because the enforcement of such an award in Russia would lead to the bankruptcy of the respondent and thus to a violation of Russian public policy. The arbitral tribunal granted the claimant’s claim for liquidated damages under a management agreement with the respondent concerning a facility, following an event of default as defined in the agreement. The event of default consisted in the termination by the third party to the management agreement – the owner of the facility – of a lease agreement the third party had concluded with the respondent in respect of the facility. (1) The tribunal found that the respondent was liable to pay compensation, as it appeared from the evidence that the owner had unilaterally terminated the lease agreement; and that this termination constituted an event of default as defined in the management agreement, which entitled the claimant to terminate the management agreement. The claimant had duly done so by sending a valid notice of termination and giving a proper notice of the claim to the respondent. As to the quantum, the claimant had provided conclusive evidence of the appropriateness and correctness of the calculations made to determine the amount of compensation. The tribunal added that the contractual provisions relied upon to calculate the losses of the claimant under the management agreement were fully consistent with the principle of freedom of contract and were not subject to any limitations in relation to the recovery of losses under the contractually applicable English law. (2) The arbitral tribunal denied the respondent’s objection that the tribunal’s duty to render an enforceable award prevented it from awarding the relief sought by the claimant, because the enforcement of such an award in Russia would lead to the bankruptcy of the respondent and thus to a violation of Russian public policy. The tribunal noted that Russian bankruptcy law expressly provided that bankruptcy proceedings could be commenced on the basis of a court decision ordering the enforcement of an arbitral award, and that the Russian courts had accordingly ordered the initiation of such proceedings against Russian companies based on foreign awards. The sole Russian decision, from 2009, on which the respondent relied in support of its argument had been overturned by the Supreme Arbitrazh (Commercial) Court of the Russian Federation, and in any event was not consistent with the restrictive approach to public policy in the recognition and enforcement of foreign awards adopted in 2013 by the Supreme Arbitrazh Court in its Information Letter No. 156. Further, while the SCC Rules did provide that arbitrators had to make every reasonable effort to ensure that an award was legally enforceable, no legal authority had been brought to the attention of the tribunal – and the tribunal was not aware of any such authority – that would compel the tribunal to refrain from awarding relief on the ground that its award might not be recognized and enforced in a given jurisdiction.
  • Final Award in case no. 2017/124, 14 November 2018
    Yearbook XLV (2020) pp. 102-106 
    seat of the arbitration: Stockholm, Sweden
    • arbitration agreement replaced by arbitration agreement in subsequent contractual document
    • arbitration clause binding on nonsignatory guarantor
    • breach of contract by failure to pay balance of contract price
    • liquidated damages
    • contractual penalty
    • applicable law to procedure is law of place of arbitration (Swedish law)
    • choice of English law as governing law
    The award held that the request of the claimant based on a contractual provision for a “penalty” (contractual penalties being unenforceable under the contractually applicable English substantive law) could be granted because it was in fact a request for liquidated damages; it also held that the guarantor – which had guaranteed the financial obligations of the respondent buyer to the claimant seller – was bound to the arbitration agreement in the guaranteed contract. The sole arbitrator held that he had jurisdiction over a dispute in respect of the outstanding payment of the balance of the contract price under a supply contract. He found that the parties’ SCC arbitration agreement contained in a subsequent contractual document (Minutes of Meeting – MOM) validly varied the SIAC arbitration agreement in the supply contract. The SCC arbitration agreement in the MOM also bound the guarantor – although it was not a signatory – because the guarantor had expressly accepted the terms of the MOM in a letter; also, under Swedish law, which applied as the law of the seat of the arbitration, an arbitration agreement signed by a debtor was binding on the guarantor of the debtor’s financial commitments. On the merits, the sole arbitrator noted that it was common ground between the parties that the balance payment under the supply contract remained outstanding. The buyer had accepted the existence of the supply contract by making the contractually provided advance payment, and the fact that the balance remained unpaid had been indicated in an appendix to the MOM, which the buyer had signed and the guarantor had accepted. Further, the supply contract provided that the buyer and the guarantor were jointly and severally liable, as did the “umbrella” agreement in whose context the individual supply contract had been concluded. Hence, the buyer and the guarantor had breached their contractual obligations and were jointly and severally liable to pay the outstanding sum. The sole arbitrator also granted the seller’s request for liquidated damages. He found that although the relevant provision in the supply contract referred to a “penalty” – and penalty provisions were not enforceable under English law, which was the contractually agreed applicable substantive law – the provision envisaged in fact liquidated damages and could therefore be enforced. The arbitrator also granted the seller’s request for interest on the awarded sums and, in light of the outcome of the case, directed the buyer and the guarantor to bear, jointly and severally, both the costs of the arbitration and the costs incurred by the seller in relation to the arbitration.
  • Final award in case no. 2017/164, 27 November 2018
    Yearbook XLV (2020) pp. 107-113 
    seat of the arbitration: Geneva, Switzerland
    • applicable law to substance
    • United Nations Convention on Contracts for the International Sale of Goods (CISG)
    • formation of contract
    • automatic renewal of contract
    • termination of contract
    • breach of contract by failure to deliver goods
    • breach of exclusivity
    • good faith and fair dealing
    • calculation of loss
    • lost profit
    • collusion in respect of settlement agreement
    • foreseeability of loss
    • mitigation of loss
    • Lanham (Trademark) Act
    • arbitrability of trademark claims
    • scope of arbitration agreement and tort claims
    • collateral estoppel of related court decision
    • burden of proof of unfair competition
    • burden of proof of unauthorized use of trademark
    • interest on damages
    • rate of interest
    • starting date of interest
    • double compensation
    The award dealt with the termination and breach of a distribution agreement. The arbitral tribunal found (1) that the agreement between the parties, which foresaw international sales of goods, was governed by the CISG as to the individual sales (as provided by the agreement itself) and by New York law in all other respects (as agreed by the parties before the arbitral tribunal). (2) It then held that the agreement was validly formed, finding that Claimant had met the burden of establishing that there was a ‘meeting of the minds’ on essential contract terms. (3) The majority of the arbitral tribunal found that the agreement did not expire or terminate, despite the distributor’s failure to meet the condition for automatic renewal provided in the agreement (a yearly purchase minimum), because the parties chose to continue expressly to refer to and invoke the agreement. As to the performance of the agreement, the arbitral tribunal held (4) that the supplier was in breach, because (i) it failed to deliver an order to the distributor; (ii) it breached its exclusivity obligations by selling products covered by the parties’ agreement to a third company; and (iii) by so doing, it breached the implied covenant of good faith and fair dealing under New York law. In respect of the claims of the distributor for damages due to the supplier’s breach of contract, the arbitral tribunal found that (5) the distributor was entitled to the profits it would have earned from it during the life of the agreement, i.e. lost profits; (6) the distributor was not entitled to damages corresponding to purchases made from another company to substitute for the products that the supplier had failed to deliver; (7) the supplier was liable to indemnify the distributor for the losses caused to the latter by a settlement agreement concluded with another company – to which the distributor had agreed to sell the products purchased from the supplier – as a consequence of the supplier’s breaches. (8) The arbitral tribunal also granted the distributor’s claim to commission fees for purchases under the agreement. However, (9) the tribunal rejected the distributor’s claim for commission fees on certain resales, finding that there was insufficient evidence of the alleged resales. The arbitral tribunal also (10) rejected the distributor’s claim to compensation for costs and expenses incurred for market development, finding that the distributor did not show that these costs were specifically incurred for the purposes of developing the market for the products under the agreement. It also (11) rejected the distributor’s claim to compensation for attorney’s fees in a separate, related trademark litigation because (i) such litigation was not caused by the supplier; (ii) the attorney’s fees had been incurred in the context of a US district court action initiated by a non-party to the arbitration; and (iii) such fees normally fell to be recovered in the litigation in which they were incurred. In respect of the trademark claims raised by the distributor, the arbitral tribunal (12) held that it had jurisdiction to arbitrate trademark and related tort claims under the law of the seat – Swiss law – provided the arbitration clause was broad and the claims were closely related to the contract at issue in the arbitration. This was the case here. The tribunal (13) admitted in this regard the US district court order in the separate, related trademark proceedings as evidence, without however finding that it was legally bound by it. (14) On the merits, it rejected the distributor’s claim for damages based on unfair competition and unauthorized use of trademark, finding that the distributor did not discharge its burden of proof. (15) The arbitral tribunal further dismissed the supplier’s counterclaim that, since the distributor had not met the yearly purchase minimum, the supplier was entitled to lost profits equal to the profits it would have received had the distributor met such minimum, finding that there was no certainty that if the distributor had met this threshold, the supplier would have received those profits. The arbitral tribunal then (16) granted the distributor’s interest claim and (17) found that there was no risk of double compensation in granting the distributor’s claims in the arbitration. Finally, (18) the tribunal decided that the supplier was to bear two thirds of the arbitration costs and reimburse the distributor for part of its legal costs.
  • Award in case no. 2018/040, 9 May 2019
    Yearbook XLV (2020) pp. 114-117 
    seat of the arbitration: Stockholm, Sweden
    • pledge of shares
    • forced sale of pledged shares
    • breach of duty of care in the sale of pledged shares
    • market price and sale price of shares
    • common intention of the parties is fundamental condition for existence and validity of contract
    The arbitral tribunal (1) dismissed the claimant’s claim for damages, finding that the claimant did not prove that the respondent – the pledgee – had breached its duty of care in the process for the forced sale of the shares of a subsidiary of the claimant, which the claimant had pledged as security in favor of the respondent. The tribunal held in this respect (i) that the contention that the respondent, which had eventually decided not to accept any offer for the shares and had appropriated them itself, had paid a significantly lower price than their fair market value was not supported by the evidence; (ii) that the short duration of the bid period had been justified; and (iii) that there had been valid reasons for the respondent to exclude certain bidders from the sale process. The arbitral tribunal (2) also dismissed the claimant’s claim for a sum which the respondent had deducted from the price it had paid for the shares and allocated to cover a debt of the claimant’s subsidiary. The tribunal found that while the respondent had not been entitled to allocate the funds as it had done, the claimant had not offered any proof that it would have been the rightful recipient of the amount in dispute.
  • Final award in case no. 2018/084, 25 June 2019
    Yearbook XLV (2020) pp. 118-123 
    seat of the arbitration: Stockholm, Sweden
    • obligation to sell shares under shareholders agreement on becoming leaver
    • leaver provision in shareholders agreement
    • bad leaver v. good leaver
    • valuation of shares
    • interpretation of contract
    • intention of parties as to contractual requirements
    • choice of Finnish law as governing law
    The award concerned the issue whether the shareholders agreement between the parties obliged the respondent, a consultant to and a shareholder of the claimant, to sell his shares in the claimant following the termination of the consultancy agreement. Applying Finnish law, which was the law contractually agreed to govern the shareholders agreement, the arbitral tribunal held that the respondent was so obliged. (1) The tribunal agreed with the claimant that the date on which the consultant became a “Leaver” under the shareholders agreement and therefore bound to sell his shares was the date on which the claimant gave notice of termination of the consultancy agreement, as expressly provided in the shareholders agreement. It was irrelevant that the consultancy agreement provided for a twelve-month prior written notice of termination. (2) The arbitral tribunal, however, dismissed the argument of the claimant that the consultant was a “Bad Leaver” within the meaning of the shareholders agreement which affected the calculation of the price for the sale of the shares, finding instead that he was a “Good Leaver” as the two conditions under the shareholders agreement for his being a Bad Leaver were not met. The conditions were that the consultancy agreement be terminated for breach by the consultant of his contractual duties, and that the breach be such as to justify the termination of his engagement, had consultant been an employee of claimant rather than a consultant, under the Finnish Employment Contracts Act. Here, the allegations regarding the consultant’s failures were vague and there was no credible evidence that he had to comply with specific and precise instructions or to fulfil clear and generally applicable duties for a CEO. (3) In respect of the sale price of the shares, the tribunal noted that under the shareholders agreement the price was to be calculated as the result of a combination between the market value and the subscription price of the shares, and that market value meant the market value of the shares as in a sale of all shares between a willing seller and a willing purchaser under the assumption that the claimant continued to carry on its business. The tribunal found that it lacked sufficient information to determine the market value of the shares in such manner, and therefore supplemented the valuations provided by the parties with reliable information made available in the proceedings, reaching the conclusion that the sale price was higher than the sum proposed by the claimant, but lower than the sum proposed by the consultant. (4) The arbitral tribunal found that the claimant could determine at its sole discretion whether to request a transfer of the shares to a specified transferee once the sale price had been determined, and granted 30 business days to the claimant to make its request, specifying the transferee(s). (5) In light of the outcome of the proceeding, the tribunal directed the claimant to bear 75 percent of the costs of the arbitration and its own legal and other costs, and to reimburse the consultant for his own costs, together with interest.
  • Final award in case no. 2018/097, 5 August 2019
    Yearbook XLV (2020) pp. 124-131 
    seat of the arbitration: Stockholm, Sweden
    • breach of contract by failure to contribute to joint venture
    • failure to contribute land use rights to joint venture
    • stay of arbitration and pending court proceedings (no)
    • foreign-related arbitration
    • applicable law to arbitration clause
    • validity of arbitration clause
    • capacity to sue in arbitration of shareholder
    • dispute within scope of arbitration clause
    • condition precedent to arbitration
    • multistage relief sought in arbitration
    • discretion of arbitrators in ordering appropriate relief
    • specific performance v. damages
    • enforcement under 1958 New York Convention
    • time limit to file claim (in arbitration)
    • waiver of right to arbitrate (no)
    • obligations of parties under contract
    • interpretation of contract
    • admissibility of extrinsic evidence
    • causation
    • loss of profits
    • calculation of damages
    • mitigation of damages
    • choice of PR China law as governing law
    The award dismissed a number of objections to jurisdiction, including in respect of the arbitrability of the claims and the potential difficulties of enforcement under the 1958 New York Convention. The dispute concerned the alleged failure by a joint venture participant, a state-owned enterprise, to contribute land use rights to a certain land in PR China to the joint venture (JV) in accordance with the joint venture agreement (JVA). (1) The tribunal held that it had jurisdiction over the dispute, finding that (i) the facts that a case was pending before a court in PR China on the same matter did not imply that the tribunal needed to stay the proceedings in order to avoid duplication or inconsistency of decisions; (ii) there were sufficient foreign elements to qualify the arbitration as a foreign-related arbitration which could be submitted to a foreign international arbitration institute; (iii) the arbitration was not in essence a dispute between two PRC entities – the joint venture and the respondent – over the transfer of land use rights, because both the first and third claimants were foreign entities presenting their dispute as a shareholder dispute relating to the alleged breach by one shareholder of its contractual obligations; and (iv) Swedish law was the governing law of the arbitration agreement, because Stockholm was the contractually agreed seat of the arbitration. Further, all objections raised by the respondent failed: (v) the arbitration clause was not invalid under the applicable Swedish law; (vi) the claimants, as the shareholders who had fulfilled their capital contributions, had standing to bring the claim against the respondent, the shareholder who had not, under the applicable PRC law, and to seek either specific performance and/or the payment of damages to the JV; (vii) the fact that the dispute related to the transfer of land use rights in the PRC did not change the nature of the claim – a shareholder claim under the JVA – which clearly fell within the jurisdiction of the tribunal in accordance with the arbitration clause; (viii) the broad arbitration clause in the JVA encompassed the subject matter of the dispute; (ix) there was evidence that the condition precedent to arbitration – friendly consultation or mediation – had been satisfied, and in any case the claimant had been allowed under the general and vague terms of the arbitration clause to make an assessment of whether friendly consultation or mediation had failed; (x) the multi-stage relief sought by the claimants – order of specific performance and/or order to pay damages – did not give rise to a jurisdiction issue as the tribunal could order the relief in stages in different awards, and therefore avoid any issues of functus officio; and (xi) the respondent’s arguments in respect of potential difficulties of enforcement under the 1958 New York Convention of an award granting the relief requested by the claimants were not relevant in respect of the issue of jurisdiction. (2) The arbitral tribunal dismissed the respondent’s procedural objections: (i) the claimants’ claims were not time-barred under PRC law; (ii) it did not appear from the documents referred to by the respondent that the claimants had waived their rights to arbitration; and (iii) the relief sought by the claimants would not result in an illegal or wrongful act: while land use rights could not be directly transferred to the JV, the contractual obligation of the respondent was to take the steps necessary to enable that transfer. (3) On the merits, the tribunal examined the (extrinsic) evidence of the case and concluded that the contractual obligation of the respondent had been to take all necessary steps to effect the transfer of land use rights to the Land as its contribution to the registered capital of the JV. It then held that as it was undisputed that the respondent had failed to do so, the respondent was prima facie in breach of its obligation. The respondent’s defences against this prima facie finding all failed. In particular, while the claimants failed to indicate in a clear manner in their statement of claim the specific contractual provisions on which they were relying, it appeared that by the time of the arbitration hearing the respondent was in no doubt about the contractual basis for the claims, which it had answered in its defence pleadings. Further, the claimants had met their burden to show that there was a causal link between the breach of contract by the respondent and the losses suffered by the JV. (4) The arbitral tribunal then noted that in principle it had the power to order relief in the manner requested by the claimants in their primary prayer for relief: an interim order requiring the respondent to complete the procedures to transfer the title of the land use rights and, failing that, a final award declaring that the respondent had failed to fulfil its capital contribution obligation to the JV and ordering Respondent to pay damages. However, under the SCC Rules the tribunal was obliged to take into account the need to enhance arbitral efficiency and to make every reasonably effort to ensure that an award was legally enforceable. It therefore considered it appropriate to grant instead a declaration of breach and an award of damages, as requested by the claimants in the alternative. (5) The tribunal then found that an award of damages for loss of profit, as claimed by the claimants, was not precluded under the JVA, which provided that the parties’ responsibilities for breach could not include consequential damages: damages for lost profits should not necessarily be seen as the indirect consequence of a breach of contract under PRC law.(6) As to the quantum of the JV’s losses, the arbitral tribunal found that the claimants’ estimation was more reliable than the estimate provided by the respondent. However, it took into account, among others, the respondent’s arguments that the claimants had failed to mitigate the JV’s losses by not doing more to oblige the respondent to transfer its land use right over a period of many years, and that the land use right, even if fully transferred to the JV, may not have been an asset easily sold and transferred into value for the JV. Accordingly, the tribunal in its discretion determined that it would be appropriate to apply an approximately 40 percent deduction to the loss claimed by the claimants. (7) The tribunal directed the respondent to bear the entirety of the costs of the arbitration, its own legal costs, and to reimburse 60 percent of the claimants’ legal costs.
  • Final award in case no. 2018/102, 30 August 2019
    Yearbook XLV (2020) pp. 132-136 
    seat of the arbitration: Stockholm, Sweden
    • novation of contract by subsequent settlement agreement
    • arbitration clause in novated contract
    • separability of arbitration clause from main contract
    • applicable law to substance determined by arbitral tribunal
    • Council Regulation no. 593/2008 (Rome I)
    • most characteristic obligation decisive for applicable law to substance
    • law of Italy applied to substance
    • confidentiality agreement
    • set-off
    The award found that a settlement agreement had novated the contract between the parties, but that this finding did not affect the arbitration clause in the original contract which, because of its separability, extended to claims under the settlement agreement. The sole arbitrator heard a dispute concerning the failure by the seller to meet its obligation under a settlement agreement to return the balance of the advance payments made by the buyer for the purchase of equipment which the seller had not delivered. (1) The arbitrator confirmed its earlier finding in a Decision on Jurisdiction that there existed, under the applicable Swedish arbitration law, a presumption in favor of the arbitration clause in the original contract between the parties also covering the buyer’s claims under the settlement agreement, which had replaced the original contract and did not provide for arbitration. This presumption was based inter alia on the broad wording of the arbitration clause, which referred to disputes arising “in connection with” the original contract, and the connection between that contract and the settlement agreement. Such presumption was not disproved by the evidence on file. (2) The parties agreed that the CISG governed the original contract, but disagreed as to the law governing the settlement agreement. In accordance with the SCC Rules the arbitrator determined the applicable law based on the law or rules of law that he considered most appropriate: here, the Rome I Regulation, according to which the law of the country of habitual residence of the party with the characteristic performance under the agreement was determinative: here, Italy. (3) On the merits, the arbitrator found that the settlement agreement – which stated that the original contract was “terminated” – had novated the original contract and thus extinguished the rights and obligations thereunder. Hence, the claims of the buyer based on the original contract were denied. Because of the separability of the arbitration clause from the main contract, added the arbitrator, this finding did not affect the finding that the arbitration clause extended to claims under the settlement agreement. As to the claim of the buyer for repayment of the balance under the settlement agreement, the arbitrator found that the seller indeed owed this sum to the buyer; however, the seller had a right under the applicable Italian law not to pay its debt because, on the facts of the case and on a balance of probabilities, the buyer had breached the confidentiality provision in the settlement agreement by disclosing information to third parties which had caused damages to the seller. These damages amounted, at a minimum, to the amount of the balance which the seller had withheld, and the seller was therefore entitled to a set-off.
  • Final award in case no. 2018/072, 29 October 2019
    Yearbook XLV (2020) pp. 137-141 
    seat of the arbitration: Stockholm, Sweden
    • breach of contract by failure to make payments
    • arbitrability of disputes concerning immovable goods
    • dispute concerning immovable goods v. dispute concerning contractual rights
    • exclusive jurisdiction of state courts (Russia) over disputes concerning immovable goods
    • investment contract
    • separability of arbitration clause from main contract
    • objections to expert report
    • loss of future profits
    • choice of English law as governing law
    The award found that the provisions of Russian law granting exclusive jurisdiction to the Russian courts over claims relating to real estate did not apply here because the dispute did not concern a property but rather contractual rights and compensation for loss of profits in relation to its operation. The arbitral tribunal heard a dispute in which the claimants sought payment of outstanding sums under Agreements relating to the running of a resort – which Agreements the claimants had terminated before contractual expiry on the ground of alleged breaches of contract by the respondent – and compensation for loss of future profits. (1) The tribunal held that it had jurisdiction: (i) Russian law, which provided that the Russian courts had exclusive jurisdiction over claims relating to real estate, did not apply as the Agreements were contractually governed by English law and subject to arbitration in Sweden. In any event, the relevant Russian law provision referred to rights to immovable property, while the present dispute related to the claimants’ contractual right to sums due under the Agreements and compensation for loss of profits. (ii) The respondent’s argument that the Agreements were in fact investment contracts and that the arbitration clauses therein were invalid because they had not been ratified by the respondent’s management or shareholders, as required for investment contracts under Russian law, also failed. The tribunal held that the Agreements were contracts for services and for licensing the use of intellectual property, and contained no provision for either party to receive an investment or a return associated with an investment. Further, even if the Agreements could be described as concerning an investment, the respondent did not explain why the arbitration clauses therein, being separate agreements, should equally be deemed to be an investment contract. (2) On the merits of the case, the tribunal found that (i) the claimants were entitled to the unpaid sums under the Agreements. It was undisputed that these sums were owed and outstanding, and the respondent’s defenses against its obligation did not succeed: in particular, the claimants were not themselves in breach of the Agreements because they had not ensured that the resort was making sufficient net profits to enable the respondent to pay the loans taken out to finance the construction and maintenance of the resort, since there were no provisions in the Agreements imposing such an obligation on the claimants. Also, the respondent’s allegations against the conclusions drawn by the claimants’ expert witness failed in the absence of any evidence to the contrary. The arbitrators further found that (ii) the claimants were entitled to recover the profits they would have earned had the Agreements run their full term. There was nothing in the Agreements justifying a conclusion that the parties intended that the claimants’ right to terminate the Agreements for the respondent’s breach of its payment obligations was their sole remedy, and that they waived their right to common law damages for loss of future profits.
  • Final award in case no. 2018/127, 14 November 2019
    Yearbook XLV (2020) pp. 142-147 
    seat of the arbitration: Stockholm, Sweden
    • new contract supersedes arbitration clause in initial contract (no)
    • new contract supersedes choice of law in initial contract (no)
    • separability of arbitration clause from main contract
    • interpretation of contract
    • general conditions of sale/standard conditions
    • admissibility of revised prayers for relief
    • admissibility of late factual allegations
    • delay in delivery and liquidated damages
    • failure to renew contract
    • internal costs
    • interest
    • choice of Swedish law as governing law
    • choice of Swedish law as applicable law to arbitration agreement
    The award applied Swedish law, chosen by the parties to govern both the main agreement and the (separable) arbitration agreement therein, to conclude that there was no common intention of the parties that the choice for the state courts of Xanadu in a subsequent order confirmation would supersede the arbitration agreement. The sole arbitrator heard a dispute concerning the payment of the balance of the purchase price under a reseller agreement, by which the claimant had agreed to supply a certain product to the respondent for resale to an end customer. (1) The arbitrator held that he had jurisdiction over the dispute in accordance with the arbitration clause in the reseller’s agreement. The parties had agreed in the reseller agreement that both the main agreement and the arbitration agreement were governed by Swedish law – a choice allowed under Swedish law, which recognized the principle of the separability of the arbitration clause, a corollary of which was that the parties could make a (separate) choice of the law applicable to the main contract and the arbitration agreement therein. Applying Swedish law, the arbitrator found that there was no common intention of the parties that a later order confirmation sent by the supplier – to which the supplier’s general conditions of sale (GCS), providing for the jurisdiction on the Xanadu courts, were attached –superseded the arbitration agreement in the reseller agreement. (2) For the same reasons, the arbitrator held that Swedish law was the substantive law applicable to the merits of the dispute, because the provision in the supplier’s GCS, which referred to Xanadu law, did not supersede the choice in the reseller agreement. (3) On the merits, the sole arbitrator (i) dismissed the reseller’s counterclaim that it was entitled to a discount on the purchase price, finding that the supplier had made that discount dependent on certain conditions that the reseller had not met; (ii) rejected the reseller’s counterclaim for liquidated damages due to the delayed delivery of the product, finding that the reseller had failed to raise this claim in a timely manner under the reseller agreement, and that in any case the delay was attributable to the reseller, which had failed to provide in reasonable time the import permit that was necessary to obtain, successively, a transit permit and an export permit, the lack of which had caused the delay; (iii) denied the reseller’s claim that the supplier failed to renew the reseller agreement, noting that by its terms, the reseller agreement expired automatically after two years of becoming effective, and that nothing in the agreement lent support to the claim that the supplier was obliged to continue it; and (iv) granted the supplier’s claim for payment of the outstanding purchase price, together with interest, dismissing the contention that payment was conditioned upon the delivery of certain additional items. The sole arbitrator found that the text of the order confirmation, in which the additional items were first mentioned, supported the supplier’s contention that the additional items were to be delivered free of charge and that payment of the purchase price was connected solely to the delivery of the main product. (4) As to costs, since the supplier prevailed on the merits in full, the sole arbitrator ordered the reseller to bear its own costs and the costs of the arbitration, and to reimburse the supplier for its legal costs, including the internal costs of two of its employees to prepare their witness statements, together with interest.

B. Court Decisions


Swedish Court Decisions on the 1958 New York Convention

  1. Supreme Court, 13 August 1979, no. SO 1462 and Svea Court of Appeal (5th Dept.), Stockholm, 13 December 1978 (AB Götaverken v. General National Maritime Transport Company) Yearbook VI (1981) pp. 237-242 (Sweden no. 1) 
  2. Svea Court of Appeal, 18 June 1980 (Libyan American Oil Company (LIAMCO) v. Socialist Peoples Arab Republic of Libya (Socialist People’s Libyan Arab Jamahirya)) Yearbook VII (1982) pp. 359-362 (Sweden no. 2) 
  3. Supreme Court, 18 April 1989, no. Sö 203 (Soleh Boneh International Ltd. and Water Resources Development (International) Ltd. v. The Republic of Uganda and The National Housing and Construction Corporation of Uganda) Yearbook XVI (1991) pp. 606-611 (Sweden no. 3) 
  4. Supreme Court, 23 November 1992 (Datema Aktiebolag v. Forenede Cresco Finans AS) Yearbook XIX (1994) pp. 712-716 (Sweden no. 4) 
  5. Svea Court of Appeal, 21 March 2001 (American Pacific Corporation v. Sydsvensk Produktutveckling AB, et al.) Yearbook XXVII (2002) pp. 551-553 (Sweden no. 5) 
  6. Svea Court of Appeal, 7 September 2001 (Planavergne S.A. v. Kalle Bergander i. Stockholm AB) CHYearbook XXVII (2002) pp. 554-556 (Sweden no. 6)ANGE 
  7. Högsta Domstolen, 16 April 2010 (Lenmorniiproekt OAO v. Arne Larsson & Partner Leasing Aktiebolag) Yearbook XXXV (2010) pp. 456-457 (Sweden no. 7) 
  8. Högsta Domstolen, 12 November 2010 (RosInvestCo UK Ltd v. The Russian Federation) Yearbook XXXVI (2011) pp. 334-336 (Sweden no. 8) 
  9. Svea Hovrätt, Department 02, 20 September 2013 (Subway International B.V. v. B) Yearbook XLV (2020) pp. 390-391 
  10. Svea Hovrätt, Department 02, 22 November 2013, and Högsta Domstolen, 2 June 2015 (Subway International B.V. v. E) Yearbook XLV (2020) pp. 392-394 
  11. Högsta Domstolen, 18 March 2014 (The estate of Juan Aramendia Rosas v. NCC International Aktiebolag) Yearbook XLV (2020) pp. 395-396 
  12. Högsta Domstolen, 17 June 2015 (H.K. with the stated company name of ATB Tjänst v. Finants Collect OÜ) Yearbook XLV (2020) pp. 397-400 
  13. Högsta Domstolen, 30 March 2017 (Industrial Consulting and Trading International J-E Johansson AB v. OOO Juriditjeskaja Kompanija) Yearbook XLV (2020) pp. 401-402 
  14. Högsta Domstolen, 4 May 2018 (Belaya ptitsa-Kursk v. Robot Grader AB) Yearbook XLV (2020) pp. 403-406 
  15. Högsta Domstolen, 4 May 2018 (J. O. P. v. Smart Board Production AB) Yearbook XLV (2020) pp. 407-412 
  16. Högsta Domstolen, 19 June 2018 (Adelina Gross AB v Promlinus D.O.O. Prokuplje) Yearbook XLV (2020) pp. 413-415 

Swedish Court Decisions on Other Arbitration-Related Issues


II. Published in the International Handbook on Commercial Arbitration


For information on arbitration law and practice in Sweden, including court practice on recognition and enforcement of foreign arbitral awards and more, please consult the National Report for Sweden  by Annette Magnusson.

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