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26 March 20194 minute read

Modernisation of Sweden's Arbitration Act

As of 1 March 2019, a number of changes have been made to the Swedish Arbitration Act (the Act) in an effort to modernise the Act and further increase Sweden's attractiveness as a place for arbitration. One significant change is that Swedish courts hearing challenge proceedings may allow oral evidence to be given in the English language, without translation to Swedish, thus reducing the cost for international parties and the risk for errors in translation.

The Act is the formal backdrop for all arbitration taking place in Sweden. It gives a procedural foundation for ad hoc arbitration and sets out conditions for the challenge of awards rendered under institutional rules such as those of the SCC and the ICC. Four years ago, a committee of Swedish arbitration experts proposed a number of changes to the Act, and a number of those proposals have now been adopted by the legislator.

The allowing of oral evidence in English is a step away from the old statutory principle (set out in the Language Act) that hearings in Swedish courts must be held in Swedish. It applies to all oral evidence in an arbitration, i.e. examination of witnesses and experts. Consent from both parties is not required, although the court should take any disagreement into account when deciding if English is appropriate in each case.

As for written evidence, current practice already allows for written evidence to be presented without being translated to Swedish where appropriate.

The proposals that were given to legislators by the expert committee also recommended allowing opening statements and closing arguments to be given in English, essentially allowing the entire court hearing to be conducted in English. However, this was deemed by legislators to be a step too far with regard to the need to ensure that court hearings are accessible to the Swedish general public.

Other changes to the Act include increased flexibility for multi-party arbitrations, provision for the consolidation of proceedings, and the court appointment of an arbitrator where multiple parties fail to agree on their choice. A number of other changes were also made in order to speed up challenge proceedings and make them more efficient, shortening the journey to a final and binding award. These include the following:

Two month period for challenge application
An application to challenge an award must now be filed with a Court of Appeal within two months of the date of receipt of the award instead of three. This sets Sweden apart from its Nordic neighbor countries, which all have a three month challenge period (as does the UNCITRAL model law). The change is motivated by a desire to ensure for swiftness and efficiency not only in the arbitration itself, but also in challenge proceedings.

Narrower room for setting aside on the basis of excess of mandate
If arbitrators exceed their mandate, this fact alone will no longer be enough to set aside an award – the excess must also be shown to have had a probable influence on the outcome. This new requirement is in line with the rule for setting aside on the basis of irregularities in general, and is motivated by the wish to avoid challenge proceedings where only a minor excess of mandate is alleged to have occurred.

The tribunal's separate decision finding that it has jurisdiction will be appealable to the Court of Appeal within 30 days
Previously, a court action for a declaratory judgment on the jurisdiction of the arbitrators could be brought at any time, before or after arbitration had been initiated, and regardless whether the arbitrators had found themselves to be competent or not. Where the arbitrators continued the arbitration and issued an award which was challenged for lack of jurisdiction, the court action for a declaratory judgment would sometimes still be ongoing, with a risk of parallel court proceedings as a result. The new rule aims at reducing this risk of parallel proceedings by setting a 30 day limit for the filing of separate court action where the tribunal has found itself competent in a separate decision. The arbitrators may still continue the arbitration pending the court's decision on the matter.

Leave of appeal from the Supreme Court is required
If a party to challenge proceedings seeks to appeal the matter to the Supreme Court, the permission of not only the Court of Appeal, but also that of the Supreme Court will now be required. In doing so, the Supreme Court has the discretion to limit its review to one or more specific questions that are deemed to be of precedential value.