3 History of Swedish arbitration Statutory text from the 14th century (Visby City Law)1734 Statute Book1917 Arbitration Institute of the SCC is establishedEast-West Disputes1977 US-USSR Optional Clause AgreementThe 1999 Swedish Arbitration ActToday: 400 arbitrations or more each year in Sweden
4 Current focus for the SCC SwedenEuropeRussiaChinaCross border investments4
6 The case loadA majority of SCC’s large cases concern East-West disputes involving exploration and/or purchase of natural resources, particularly within the energy sector.13 out of the “top 20” arbitrations concern energyTotal claim ranging from EUR 0,5 billion to 8,9 billion4 state respondents in the “top 20”1 ½ to 5 years from registration to final awardEfficiently facilitating arbitral proceedings in international disputes since 1917
9 The Swedish Legal System Civil law or common law?Model law country?Statute Book of 1734Procedural Code of 1948No stare decisis doctrineThree court instances – District, Appeal and Supreme
10 The legal framework for arbitration in Sweden New York Convention 1958Swedish Arbitration Act (1999:116)SCC-Rules
11 Applicable law Seat of arbitration Sweden ->Lex arbitri: Swedish Arbitration Act (1999:116)“Swedish” arbitrationSAA Section 46“This Act shall apply to arbitral proceedings which take place in Sweden notwithstanding that the dispute has an international connection.”SCC Rules Article 22 Applicable law – the arbitral tribunal shall apply the law or rules of law which it considers to be most appropriate
12 Main feautures of the Swedish Arbitration Act 60 sectionsBased on party autonomyStructure of proceedings determined primarily by the parties, secondly by the arbitratorsParties free to contract out of most provisions
13 The role of state courts Appointment/removal of arbitrators (section 10, 17, 14-16)Interim measuresWitness/expert testify under oathDocument production (section 26)JurisdictionAction against the award regarding arbitrators compensationEnforcement of international awardsChallenge of awards
14 The arbitration agreement SAA Section 1 Disputes concerning matters in respect of which the parties may reach a settlement may, by agreement, be referred to one or several arbitrators for resolution. Such an agreement may relate to future disputes pertaining to a legal relationship specified in the agreement. The dispute may concern the existence of a particular fact. In addition to interpreting agreements, the filling of gaps in contracts can also be referred to arbitrators. Arbitrators may rule on the civil law effects of competition law as between the parties.
15 The arbitration agreement (continued) Capacity (legally qualified)Form (does not have to be written, reference clause is ok, may be bound by conduct or inactivity)No vitiating element (duress, fraud, undue influence etc.)Arbitrality93 ffIn view of the Swedish legislator, Art II of the NY-convention are to be understood only as a minimum regulation imposing no requirements additional to written form. Art V (1)(a) recognition and enforcement may only be refused if the arb.agreement is “not valid under the law to which the parties has subjected it, or, failing…under the law where the award was made”.Doctrine of assertion, p 103
16 What is not arbitrable under Swedish law Registration and validity of patents and trademarks (license ok)Consumer disputes (not ex officio dismissal)Labour disputesCompetition law (civil law effects of competition law as between the parties ok)Family and criminal law matters (questions of punishment)
17 The ArbitratorsThe parties may determine the number of arbitrators and the manner in which they shall be appointed.If no agreement, the arbitrators shall be three in number. Each party shall appoint one arbitrator, and the arbitrators so appointed shall appoint the third (who will be chair)Any person of full age and capacity with regard to his or her actions and propertyNo requirement to be admitted by the Swedish BarJudge can act as chairman (but not party-appointed)
18 The arbitrators’ jurisdiction Section 2 The arbitrators may rule on their own jurisdiction to decide the dispute. The aforesaid shall not prevent a court from determining such a question at the request of a party. The arbitrators may continue the arbitral proceedings pending the determination by the court. Notwithstanding that the arbitrators have, in a decision during the proceedings, determined that they possess jurisdiction to resolve the dispute, such decision is not binding. The provisions of sections 34 and 36 shall apply in respect of an action to challenge an arbitration award which entails a decision in respect of jurisdiction.
19 Two options to review the jurisdiction in Court Declaratory judgement at any timeAppeal of negative decision by the Tribunal
20 Court review of the arbitrators’ jurisdiction by declaratory judgement Declaratory judgement on the jurisdictionCan be brought at any timeCourts not allowed to stay proceedingsJudgment binding. Failure to comply =award challengeable/voidBrought pursuant to Procedural Code. Requires:- jurisdiction of the Court (the dispute or the parties must have a sufficiently strong connection to Sweden for there to be a Swedish interest in the administration of justice).- “uncertainty exists as to the legal relationship and the uncertainty exposes the plaintiff to a detriment” (Ch 13, s 2 of the Procedural Code)-> Russian Federation v RosInvestCo UK Ltd (NJA 2010 s 508)
21 Russian Federation v RosInvestCo UK Ltd Supreme Court:“… where the parties have agreed that the proceedings shall take place in Sweden, it is irrelevant if the parties or the arbitrators have decided to hold hearings in other countries, if the arbitrators are not from Sweden, if their duties have been carried out in another country or if the dispute concerns a contract which otherwise has no connection to Sweden.”“Under Section 2, paragraph 1, the arbitrators may rule on their own jurisdiction to decide the dispute. Such a ruling does not, however, prevent a court, at the request of a party during the arbitral proceedings, from ruling on the jurisdictional issue. The court’s decision on the matter will have legal force and be binding on the arbitrators.”“Since RosInvestCo and the Russian Federation have agreed that the arbitral proceedings shall take place in Sweden, the Swedish Arbitration Act is applicable. Consequently, Swedish courts are competent to rule on the arbitrators’ jurisdiction and as to whether there is sufficient connection to the Swedish legal system.”
22 Court judgement on negative ruling on jurisdiction Negative ruling by the Tribunal shall be made as an award (s 27)Award may be appealed to the Court of Appeal (s 36)Court may replace the arbitrator’s ruling with a binding judgment confirming the jurisdiction of the tribunalSection 27 The issues which have been referred to the arbitrators shall be decided in an award. Where the arbitrators terminate the arbitral proceedings without deciding such issues, such shall also take place through an award.Section 36 An award whereby the arbitrators concluded the proceedings without ruling on the issues submitted to them for resolution may be amended, in whole or in part, upon the application of a party.
23 ConfidentialityBulgarian Foreign Trade Bank Ltd (Bulbank) v A.I. Trade Finance Inc .NJA 2000, p 538AIT had published a separate award in the course of proceedings. Bulbank sought to terminate the arb.agreement and subsequently tried to have the final award declaed void or set aside on the basis that AIT had breached the fundamental principle of confidentiality.Supreme Court rejected Bulbank’s claim in its entirety. Party autonomy, parties have to agree.-> Confidentiality is not an implied term of an arb.agreement
24 Interim measuresSection 25 SAA Unless the parties have agreed otherwise, the arbitrators may, at the request of a party, decide that, during the proceedings, the opposing party must undertake a certain interim measure to secure the claim which is to be adjudicated by the arbitrators. The arbitrators may prescribe that the party requesting the interim measure must provide reasonable security for the damage which may be incurred by the opposing party as a result of the interim measure.Cannot be enforced in Sweden.
25 Court decision on interim measures Prior to or after constitution of the tribunal– Apply to the District Court for an interim measure• Ch 15 § 3 CJP– Show probable cause that the party has a claim that is or can be made thebasis of judicial proceedings determined by another similar procedure, and ifit is reasonable to suspect that the opposing party, by carrying on a certainactivity, by performing or refraining from performing a certain act, or by otherconduct, will hinder or render more difficult the exercise or realization ofthe applicant's right or substantially reduce the value of that right, thecourt may make an order for measures suitable to secure the applicant’sright.
26 Obtaining evidence through court Witness or expert testify under oathProduction of documentsA party must obtain consent of the TribunalIf the measure is justified, the Tribunal will approveThe party can then submit an application to the District Court
27 Award or decisionSection 27 The issues which have been referred to the arbitrators shall be decided in an award. Where the arbitrators terminate the arbitral proceedings without deciding such issues, such shall also take place through an award. Where the parties enter into a settlement agreement, the arbitrators may, at the request of the parties, confirm it in an award. Other determinations, which are not embodied in an award, are designated as decisions. The mandate of the arbitrators shall be deemed to be completed when they have delivered a final award, unless otherwise provided in sections 32 or 35.
28 Voting rulesSection 30 Where an arbitrator fails, without valid cause, to participate in the determination of an issue by the arbitral tribunal, such failure will not prevent the other arbitrators from ruling on the matter. Unless the parties have decided otherwise, the opinion agreed upon by the majority of the arbitrators participating in the determination shall prevail. If no majority is attained for any opinion, the opinion of the chairman shall prevail.
29 Invalidity and challenge of awards Section 33 An award is invalid: 1. if it includes determination of an issue which, in accordance with Swedish law, may not be decided by arbitrators; 2. if the award, or the manner in which the award arose, is clearly incompatible with the basic principles of the Swedish legal system; or 3. if the award does not fulfil the requirements with regard to the written form and signature in accordance with section 31, first paragraph. The invalidity may apply to a certain part of the award.
30 Invalidity and challenge of awards (continued) Section 34 An award which may not be challenged in accordance with section 36 shall, following an application, be wholly or partially set aside upon motion of a party: 1. if it is not covered by a valid arbitration agreement between the parties; 2. if the arbitrators have made the award after the expiration of the period decided on by the parties, or where the arbitrators have otherwise exceeded their mandate; 3. if arbitral proceedings, according to section 47, should not have taken place in Sweden; 4. if an arbitrator has been appointed contrary to the agreement between the parties or this Act; 5. if an arbitrator was unauthorized due to any circumstance set forth in sections 7 or 8; or 6. if, without fault of the party, there otherwise occurred an irregularity in the course of the proceedings which probably influenced the outcome of the case. An action must be brought within three months from the date upon which the party received the award or, where correction, supplementation, or interpretation has taken place pursuant to section 32, within a period of three months from the date when the party received the award in its final wording. Following the expiration of the time limit, a party may not invoke a new ground of objection in support of his claim.
31 Invalidity and challenge of awards (continued) Court of Appeal only instanceMay grant leave to appeal to Supreme Court if it is a matter of precedent”Exceeded mandate” and ”irregularity in the course of the proceedings” most frequently invoked112 challenges duringOnly 2 successful challenges-> Exceeded mandate and impartial arbitrator
32 Recognition and enforcement of domestic awards Swedish Enforcement CodeEnforced based on application to the Swedish Enforcement AuthorityRefusal only if:the award is not in written form or is missing signaturesArb.agreement includes right to appeal on merits
33 Recognition and enforcement of foreign awards SAA Section 52-60Application for enforcement lodged with Svea Court of AppealApplic. communicated to other partyUndergoes exequatur proceedingsGrounds of refusal based on NY-conv.Lacked capacity/not properly representedArb.agreement not validNot given proper notice/unable to present caseExcess of mandate by the TribunalComposition of tribunal/arbitral procedure not in accordance with party agreement/law of seatAward has not yet become binding/has been set aside/suspended by comptenent authority where the award was made
34 Swedish style arbitration Two rounds of written pleadingsRather precise, not very lengthyNo production of documents/discoveryA “recital” circulated prior to the hearingBasically the first part of the awardFormal descriptionThe procedureSummary of the parties’ positionsOral witness evidenceOral closing arguments
35 What to expect from a Swedish arbitrator Less active“Facts and evidence should be presented to me”The floor belongs to the parties – arbitrator should safeguard that each party is given ample opportunity to present his caseDo not interfere with hearing of the witnessesUnless the arbitrator does not understand or need confirmation on certain informationParty appointed – not party arbitrator
36 Rules applicable to the SCC Arbitration Rules (2010)Expedited Arbitration Rules (2010)Investment Arbitrations (ECT, BITs)Emergency Arbitrator (2010)UNCITRAL arbitrationsMediation Rules (1999)
37 SCC Arbitration Rules – specific issues 6 months to render award from referralInterim measuresEmergency ArbitratorConsolidationSeparate award for costsEfficiently facilitating arbitral proceedings in international disputes since 1917
38 Expedited RulesDeveloped for minor disputes regarding less complex issues and involving a smaller amount in dispute.Speedy and cost-efficient dispute resolutionThe SCC administers both domestic and international arbitration cases under the Expedited Rules.The parties decide whether to use the Expedited Rules or the Arbitration Rules (SCC cannot change) - in the arbitration agreement or once the dispute has emerged. Another option is to let the SCC determine what set of rules should be applied taking into account the complexity of the matter, the amount in dispute and other relevant circumstances (combination clause).Efficiently facilitating arbitral proceedings in international disputes since 1917
39 Key features of the Expedited Rules: The arbitral tribunal always consists of a sole arbitratorUnless the arbitrator for special reasons decides otherwise the parties each may, in addition to the statement of claim and the statement of defence, only submit one written statement, including statement of evidence.The statements should be brief and the time limits within which the documents shall be submitted may as a general rule not exceed 10 working days.A hearing will be held if requested by a party and if deemed necessary by the arbitratorThe award shall be made within three months. A party may request a reasoned award.Efficiently facilitating arbitral proceedings in international disputes since 1917
40 SCC Mediation Rules Entered into force on 1 April 1999 Condition for mediation is that the parties are in agreement to use a mediator.The mediator shall complete his or her task within two months.The settlement agreement can be confirmed in an arbitral award.Any persons participating shall respect the confidentiality of the mediation.Efficiently facilitating arbitral proceedings in international disputes since 1917
41 SCC Model ClauseAny dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.Efficiently facilitating arbitral proceedings in international disputes since 1917
42 Recommended additions to any arbitration clause Number of arbitratorsSeat of arbitrationLanguage of the proceedingsSubstantive lawEfficiently facilitating arbitral proceedings in international disputes since 1917
43 Time – the Stockholm perspective Average number of months for a final award on the merits in international cases under the SCC Rules.4343
47 The SCC as an option in investment disputes Energy Charter Treaty (Part III, art. 26)Bilateral Investment Protection TreatiesInvestment agreements between investors and states (in particular, from former USSR)Since 1993: 38 investment arbitrations at the SCCUNCITRAL (appointing authority)
52 Investment arbitration under the SCC Rules The SCC Rules (2010) apply equally to commercial and investment disputes.Chairperson of neutral nationality is appointed by the SCC Board.Fees are value-based (for claims up to EUR 100 million)SCC and the Tribunal shall maintain confidentiality
53 Investment Arbitration under the SCC Rules (cont’d) Majority of cases relate to CIS countries, but also EU states, South America and North AmericaAverage length of proceedings: 21 monthsProcedural issues: jurisdiction, bifurcation, multiple claimantsAverage cost: EUR (fees, expenses and admin.fee)Claimants: private companies, holding companies and private investors
54 The decisions by the Board Appointment of arbitratorsChallenges to arbitratorsJurisdictionSeatNumber of arbitratorsConsolidationAdvance on costsLista över de beslut som styrelsen fattarBesluten fattas av STYR mot bakgrund av Sekretariatets förslag, något som presenteras av ansvarig jurist.Presentationen avser – parter, bakgrund, kontrakt, skiljeklausul, tidigare skriftväxling etc. Kommer gå igenom de två första
55 Appointment of arbitrators, art. 13 Party autonomyThree arbitrators unless other agreementNo list of arbitratorsParties appoint one arbitrator each, and the SCCappoints the ChairpersonSole arbitrator is appointed jointly by the parties (within 10 days). If parties fail to make an appointment, the arbitrator shall be appointed by the SCC (art. 13(2))Where there are multiple Claimants or Respondents, they jointly or separately appoint equal number of arbitrators.Requirements to the arbitrators: independent and impartial (Swedish Act: arbitrator also shall posses full legal capacity and not insolvent)Chairperson, or sole arbitrator, shall be from a neutral countryUtgångspunkt = avtalsfrihet för parterna att bestämma om annan ordning för utseende,Annars…[ovanstående]Central uppgift för STYR att utse nämnden så att förfarandet kan komma igångUtseenden sker så snabbt som möjligt
56 Factors to take into consideration ElementarySpecific comptenceExperience of arbitrationOther factorsThe parties and the arbitrators nationalityApplicable lawLanguage for the procedureThe parties geographical locationSeat
57 Who were appointed by the SCC (2003-2009)? YEAR 2009 NationalityNumberSwedish269Russian12British9FinishUnknown7American6SwissItalian4NorwegianGermanUkrainianDanish3Australian2FrenchChinese1NigerianPakistani10 most frequent appointed arbitrators –average age of 62 yearsYoungest – 35 yearsLawyers – 67 %Judges – 28 % (declining)Professors – 4 %Åldern hos de partsutsedda skiljemännen är några år högreEndast 3 % av alla SCC-uppdrag har gått till kvinnorSCC har gett uppdrag till 121 pers medan parterna spridit uppdragen bland 270 persDomare – minskar stadigt endast 13 % av uppdragen
58 Jurisdiction (art.10) Prima facie decision by the Board ”Manifestly lacks jurisdiction”Dismissal, in whole or in partFinal negative decision-> Positive decision: Tribunal rules on its own jurisdiction131 decisions on jurisdiction for 720 cases ( )”Manifestly” in 6 out of these 131 casesJurisdiktionsinvändningar i nästan 1 av 5 skiljeförfarandenStyrelsen ansåg det bara vara ”uppenbart” att SCC saknade behörighet i 6 av 131 beslut.Tröskeln är låg6 beslut = SCC ingen jurisdiktion- främst skiljeavtal som hänvisade till ad hoc-förfarande. (Kdn kan t.ex. ha påkallat mot bakgrund av flera avtal innehållandes olika skiljeklausuler).
59 Challenge to arbitrators, art. 14 and 15 Every arbitrator must be impartial and independentDuty to disclose signed statementChallengeCircumstances which may give rise to justifiable doubtsWithin 15 days from when circumstances became known (preclusion)Parties and arbitrators submits commentsIf the other party agrees to the challenge resignThe Board makes a final decisionAlla Skm måste lämna in en undertecknad bekräftelse (art.14)SCC - strikt hållning i sin praxisOm SCC utsett Skm som lämnar in en ”oren” bekräftelse går SCC vidare på listan av Skm, även om omständigheten inte formellt sett är jävsgrundandeOm en partsutsedd Skm lämnar en ”oren” bekräftelse skickas denna till parter och övriga SkmUpp till parterna att ageraInom 15 dagar från det att parten fick kännedom om omständigheten, annars förloras rätten att invändaParterna och Skm får tillfälle att yttra sig (kan bli flera omgångar av skriftväxling)Om motparten medger invändning skall Skm avgå om inte, fattar Styrelsen ett beslut i jävsfrågan[Bläddra till statistik][Skm som brister i sin upplysningsplikt - kan leda till skadestånd]
60 Illustration över det totala antalet mål per år samt antalet jävsbeslut som fattats av Styrelsen. Viktigt: De skiljemän som avgår frivilligt eller de som entledigats efter att motparten medgett invändningen, finns inte med i statistiken
61 Basis for the challenge decision by the Board SCC RulesSCC previous practiceSAA (if applicable)IBA Guidelines on Conflicts of InterestBest practice (Swedish and International)DoctrineThe decision by the Board is not reasoned.När Styrelsen fattar ett beslut gällande jäv tittar man på…I ungefär 1 av 3 beslut fann Styrelsen att Skm var jävig
62 Consolidation (art. 11)Article 11 If arbitration is commenced concerning a legal relationship in respect of which an arbitration between the same parties is already pending under these Rules,the Board may,at the request of a party,decide to consolidate the new claims with the pending proceedings. Such decision may only be made after consulting the parties and the Arbitral Tribunal.Efficiently facilitating arbitral proceedings in international disputes since 1917
63 Costs of the arbitration (art 43) Before making the final award, the Tribunal shall request the Board to finally determine the Costs of the ArbitrationThe Arbitral Tribunal shall include in the final award the Costs as finally determined by the Board and specify the individual fees and expenses of each member of the TribunalThe parties are jointly and severally liable to the arbitrators and to the SCC for the Costs.Efficiently facilitating arbitral proceedings in international disputes since 1917
64 Pre-award relief at the SCC Interim measures (Art 32)Emergency Arbitrator Rules (Appendix II)Separate award on advance on costs (Art 45 (4))Now, turning to the measures available under the SCC-rules, we can see that there are three main measures that a party can seek before the final award is rendered.We have…
65 SCC Rules: Interim measures (Art 32) Article 32(1) The Arbitral Tribunal may, at the request of a party, grant any interim measures it deems appropriate.(2) The Arbitral Tribunal may order the party requesting an interim measure to provide appropriate security in connection with the measure.(3) An interim measure shall take the form of an order or an award.(4) Provisions with respect to interim measures requested before arbitration has been commenced or a case has been referred an Arbitral Tribunal are set out in Appendix II.(5) A request for interim measures made by party to a judicial authority is not incompatible with the arbitration agreement or with these Rules.Looking at the SCC Rules on interim measures, we can see that the Tribunal has the power to “grant any interim measure it deems appropriate”.Institutional rules typically do not provide meaningful standards for the grant of provisional measures, but simply provides that a tribunal may issue such provisional relief that it “deems necessary” or “appropriate.” The SCC Rules are no different.These formulations merely confirm the tribunal's broad authority to grant provisional relief, and do not establish standards for when that authority should be recognized.However, these formulations do not intend to leave the interim measures entirely to the arbitrators' unguided discretion. Rather, they should be understood to mean that arbitral tribunals will apply legal standards specifying when interim measures will be granted. In practice, arbitral tribunals have done this by applying a fairly careful and structured analysis, where the tribunal require showings ofserious or irreparable harm to the claimant; andurgency;(c) some tribunals also require the claimant to establish a prima facie case on the merits.Now, as you can see in Article 32 (4), the SCC Rules also contain provisions regarding interim measures requested before arbitration has commenced. [BYT BILD – hit 7:30][Most arbitral tribunals also look to the nature of the provisional measures that are requested, and the relative injury to be suffered by each party, in deciding whether to grant such measures. In particular, some provisional measures (e.g., preserving the status quo or ordering performance of a contract or other legal obligation) will typically require strong showings of serious injury, urgency and a prima facie case, while other provisional measures (e.g. preservation of evidence, enforcement of confidentiality obligations, security for costs) are unlikely to demand the same showings.][It is also sometimes said that a tribunal requires jurisdiction in order to be able to issue provisional measures. However, a tribunal is able to issue interim measures notwithstanding the existence of a jurisdictional challenge and notwithstanding the fact that the tribunal has not ruled on this challenge. Thus, arbitral tribunals have not infrequently ordered provisional relief notwithstanding the existence of an unresolved (and therefore possibly well-founded) jurisdictional challenge, if it appear that there is, prima facie jurisdiction.][Under Article 26(3) UNCITRAL The party requesting an interim measure … shall satisfy the arbitral tribunal that:(a) Harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted; and (b) There is a reasonable possibility that the requesting party will succeed on the merits of the claim. ...]Efficiently facilitating arbitral proceedings in international disputes since 1917
66 Bridging the gap with an Emergency Arbitrator Introduced January 1, 2010.Opt-outAvaliable before referral to tribunalRespondent must be notifiedAppointment within 24 hoursChallenge within 24 hoursDecision within 5 days – can be extendedCost EURThis provision, for an Emergency Arbitrator to order interim measures, was introduced when the Arbitration Rules of the SCC was revised; and entered into force on January 1, 2010.The Emergency Arbitrator mechanism aims to provide parties with the possibility of obtaining interim measures before the case has been referred to the tribunal. Under the 2007 SCC Rules, a party could not request an interim measure until the case had been referred to the tribunal. The average time from the request for arbitration to the referral to the arbitral tribunal in SCC-cases is around three months, meaning that there was earlier a gap of around 3 months where interim measures could not be granted.[hit 8:30][Of course, the rules do not prevent a party from going to court, butThe SCC Emergency procedure calls for notice to be given to the responding party. It is not available on an ex parte basis.The appointment of the Emergency Arbitratior shall be done within 24 hours. Challenge to an arbitrator shall be put forward within 24 h. The decision shall be handed down within 5 days.The rules apply to all SCC arbitrations unless the parties expressly agree otherwise (opt-out) but do not prevent a party from requesting the courts to grant interim measures, but parties that have an arbitration clause is often reluctant to go to court to ask for interim measures (since it’s non-confidential, and especially if it is in another country..The cost for an application is Euro and shall be paid by the applicant. At the request of a party, the costs may be apportioned between the parties by the Tribunal in the final award.[hit 10 min]Efficiently facilitating arbitral proceedings in international disputes since 1917
67 Example of an SCC arbitration 1-4 months from request to referral to Tribunal = vacuumBefore 2010, only interim measure after refferal to TribunalNow: interim measure before referralEfficiently facilitating arbitral proceedings in international disputes since 1917
68 Similarities between SCC and ICC, but also differences ICC to appoint “within a short a time as possible” (Article 2(1) App. V),SCC to “seek to appoint ... within 24 hours” (Article 4(1) App. II)ICC order to be made within 15 days from arbitrator’s receipt of file (Article 6(4) App. V),SCC decision to be made within 4 days from arbitrator’s receipt of file (Article 8(1) App. II); may be extended under both RulesChallenge of arbitrator within three days (ICC) and 24 hours (SCC)ICC USD 40,000, SCC EUR 15,000Article 29(5) ICC Rules excludes treaty-based arbitrationEfficiently facilitating arbitral proceedings in international disputes since 1917
69 23 dec 13.00 23 dec 19.00 24 h 28 dec 15.00 5 days Claimant Applies for the appointment of an Emergency Arbitrator and pays the costsSCCNotifies RespondentSCCAppoints the Emergency Arbitrator, sends CV and Confirmation to the parties23 dec 13.00SCCRefers the application to the Emergency Arbitrator23 dec 19.0024 hEmergency ArbitratorContacts the parties and makes timtableClaimantSubmits any additional commentsRespondentSubmits an AnswerEmergency ArbitratorMakes its decision on written submissions or after hearing the parties28 dec 15.00Emergency Arbitrator makes a decision5 daysSCCCloses the file
70 ParticularsThe power of the EA does not cease when decision is made, but the EA has power until case is referred to Arbitral Tribunal. No overlappingEmergency decision may be amended or revoked upon application by a party.Emergency decision is binding, but the effect ceases in 4 situations.Ceases:When the Emergency Arbitrator so ordersWhen the Arbitral Tribunal makes a final awardIf arbitration is not commenced within 30 days of the emergency decisionIf the case is not referred to the Arbitral Tribunal wihin 90 days of the emergency decisionEfficiently facilitating arbitral proceedings in international disputes since 1917
71 Emergency Arbitrator – the SCC experience Four cases in 2010, two in 2011and two (so far) in 2012The SCC has appointed an Emergency Arbitrator within the 24-hour time limit in all eight cases.Five out of eight decisions were rendered within the five days originally prescribed.Extensions were granted in three cases upon a petition by the Respondent. In all these cases, decisions were rendered within less than 12 days from the application.We had four cases in 2010….Efficiently facilitating arbitral proceedings in international disputes since 1917
72 The applications for an Emergency Arbitrator Disputed value of potential claims in arbitration: EUR 1 million – 100 millionParties were from: Cyprus, Netherlands, Finland , Norway, Georgia, Sweden, Israel, Switzerland, Lithuania, Russia, Germany, USA, ChinaOne application for interim measures has been successful. Seven applications have been denied.The request that was granted concerned a Shareholders Agreement. “Necessary to safeguard the substantive rights of the Applicant”.One request was granted.Here the Emergency Arbitrator found that the Claimant had demonstrated probable cause for breaches of contract and that the requested interim measure was necessary to safeguard the substantive rights of the Applicant.It concerned a Shareholders Agreement where the parties had agreed that the Claimant’s shareholding should not be less than a certain percentage of the shares in a certain company. The Respondent was ordered not to sell, assign, transfer, pledge or otherwise dispose of any of its shares in the company.Most other applications were denied…- since the Emergency Arbitrator was not persuaded that the request was of an urgent or imminent nature and the fact that the Emergency Arbitrator lacked jurisdiction to bind third parties (transport agreement).- no irreparable harm would be inflicted upon the Claimant if being denied (construction agreement).- the request did not aim at interim measures but rather was a substitute for a judgement or concerned material questions that could not be ruled upon by the Emergency Arbitrator (agent agreement) ][hit 14 min]Efficiently facilitating arbitral proceedings in international disputes since 1917
73 Separate award on advance on costs Art. 45 (4)If one of the parties pays the other party’s part of the advance on costs, that party may request an award for the reimbursement of the payment.Now, turning to a brief overview of the last measure under the SCC Rules, we turn to what is called Separate award on advance on costs.Art 45 (4) states that…The Swedish Court of Appeal has found that an interim award on the advance on costs is enforceable and may form the basis for an application for bankruptcy (Consafe AB v. Auto Connect Sweden AB – 11 March 2009)
74 Arbitration Institute of the Stockholm Chamber of Commerce THANK YOUJohan LundstedtTelArbitration Instituteof the Stockholm Chamber of Commerce