6.01  After years of preparation, the Swedish Arbitration Act of 1929 and the Act Concerning Foreign Arbitration Agreements and Awards of 1929 were replaced by the Swedish Arbitration Act (SAA) in 1999, which was then updated in 2019. The SAA takes account of developments in international arbitration, notably the UNCITRAL Model Law on International Commercial Arbitration. The SAA applies equally to domestic and international arbitrations, but nevertheless conforms closely to the Model Law. The SCC Rules have been prepared on the basis of, and taking into account, the SAA. The 2017 SCC Rules have also taken into account recent developments on the international arena of commercial arbitration proceedings. The SAA and the SCC Rules together constitute an efficient and comprehensive collection of arbitration provisions and rules relating to arbitrations in Sweden.

(p. 185) 6.02  The SAA is based on and recognizes the fundamental principle of party autonomy. Thus, the SAA has remarkably few rules of procedure, mainly those set forth in sections 19–26. The general, and overarching, rule of procedure is set forth in section 21 of the SAA, which reads as follows:

Section 21

The arbitrators shall handle the dispute in an impartial, practical, and speedy manner. In doing so, they shall act in accordance with the decisions of the parties insofar as there is no impediment to do.

6.03  Attractively simple as the procedural scheme thus outlined in the SAA may appear, it is clearly too simplistic to constitute a satisfactory framework for arbitration proceedings even in uncomplicated disputes. Additional rules and practices inevitably must play an important role.

6.04  In contrast to the SAA, the Swedish Procedural Code has numerous detailed provisions with respect to the procedure in Swedish courts. It is generally accepted that the SAA must be applied autonomously, ie without recourse to the Procedural Code.¹ This is particularly important if the arbitrators, the parties, or their counsel come from other jurisdictions. The principles of orality, concentration, and immediacy,² which are the predominant rules of judicial procedure under the Procedural Code, do not automatically apply to arbitration proceedings. For example, it is clear that the arbitrators must consider all materials presented in the arbitration, including pleadings and documents submitted by the parties to the arbitrators before the main hearing.

6.05  This being said, however, the arbitrators are free to look to the Procedural Code for guidance where the SAA is silent and the parties have not reached agreement with respect to the conduct of the arbitration. For example, the Swedish Supreme Court has ruled that principles of civil procedure with respect to res judicata apply, by analogy, to arbitration, unless there are special reasons to the contrary.³ The possibility of looking to the Procedural Code for guidance must not be mistaken for a general acceptance of applying the Procedural Code in arbitrations, not even in purely domestic arbitrations, ie where both parties are Swedish. Instead, the overriding principle of party autonomy must always be kept in mind when dealing with arbitration.

6.06  Under Swedish law, there is no requirement that Swedish lawyers participate in international arbitrations. There is no requirement by law or practice to use Swedish citizens either as arbitrators or counsel. For all practical purposes, however, Swedish lawyers play important roles in international arbitrations in Sweden, as counsel, arbitrators, and in other capacities. The legal education, training, attitudes, and traditions of Swedish lawyers⁴ therefore influence the conduct of international arbitrations in Sweden. Needless to say, this is particularly true when the chairperson of the tribunal is a Swedish lawyer and when Swedish attorneys act as lead counsel.

(p. 186) 6.07  The different arbitration cultures which exist today are converging more and more, such that it is perhaps even possible to speak of a culture of international commercial arbitration. There is an ever-growing number of lawyers who take part in international arbitrations as counsel and as arbitrators. A common approach to the conduct of international arbitrations is gradually developing. Differences do, however, remain.

6.08  As far as international commercial arbitration in Sweden is concerned, it is, by virtue of the role played by Swedish lawyers, to a large extent permeated by the philosophy and the cardinal rules underlying the Swedish Procedural Code. As noted in the foregoing, it is important to understand that the Procedural Code is, however, not applicable to arbitrations in Sweden, not even by analogy; clearly, arbitration and court litigation are two different methods of resolving disputes, a fact which is recognized by the Swedish legislator. This notwithstanding, most Swedish lawyers practising today are imbued with the legal culture developed on the basis of, and around, the Procedural Code. Hence its importance for arbitrations, domestic as well as international.

6.09  The Swedish Procedural Code was introduced in 1948, and brought about a major reform in Swedish court procedure. The Procedural Code largely did away with written procedure and introduced an oral procedure, including oral preparatory meetings—subsequent to the submission of written briefs—geared towards preparing the case so as to facilitate one single, concentrated main hearing during which all evidence—both documentary evidence and witnesses—is presented and during which all arguments, factual as well as legal, are presented.

6.10  Much of the discussion today about different approaches to international arbitration goes back to the differences between the adversarial and inquisitorial approaches to adjudication. The adversarial system is intimately linked with the common law system and is used in common law jurisdictions. The inquisitorial system, with its foundation in Roman law, is used in the civil law jurisdictions of continental Europe, such as France, Germany, and Italy.

6.11  Without going in to any details, and by way of simplification, the adversarial system leaves the conduct of the litigation to the parties and the function of the judge is to sit and listen and determine the issues raised by the parties. His role is thus not to conduct an investigation, or examination, in pursuit of a public interest, or on behalf of one of the parties. In short, the proceedings are essentially controlled by the parties to the dispute.

6.12  Under the inquisitorial system, however, the judge, or the court, is much more active, even pro-active and inquisitive. This means, inter alia, that counsel play a far lesser role in the trial process. Generally speaking, there is more emphasis on written submissions than on oral advocacy. It is not unusual for there to be no cross-examination at all of witnesses.

6.13  As will be described below,⁵ Swedish court procedure represents a merger between the adversarial and inquisitorial systems in that it combines written and oral procedure. As far as the oral procedure is concerned, however, in commercial cases it is clearly adversarial in nature, and thus to a large extent resembles the Anglo-American system.

(p. 187) 6.14  When it comes to the conduct of arbitrations in Sweden, the starting point for Swedish lawyers is the consensual nature of arbitration, which in turn is an outflow of party autonomy. Every arbitration is based—and must be based—on the agreement of the parties. The arbitrators derive their authority from the agreement of the parties. Put differently: the arbitrators sit there because the parties have put them there. Most Swedish arbitrators therefore regard the parties as the masters of the procedure. The parties control the arbitration. Consequently, if both parties agree on how to conduct the arbitration, the arbitrators must follow the agreement of the parties. It follows from the foregoing that arbitrations in Sweden are adversarial in nature, rather than inquisitorial. Swedish arbitrators thus expect the parties to present their cases—the facts and the law—and to determine which evidence, documentary as well as oral, they wish to rely on. This also means that the typical Swedish arbitrator would be hesitant to become actively involved in attempts to settle the dispute—unless the parties ask him to—for fear of undermining his impartiality. The fear of appearing to favour one side will also cause most Swedish arbitrators to be very cautious in putting questions—at least sensitive questions—to the parties. Usually, questions, save for clarification purposes, will be put only after counsel for both sides have had the opportunity to present their respective cases.

6.15  It has been pointed out that accepting party autonomy and the adversarial approach—as these concepts have been explained above—will increase the risk of an arbitral tribunal reaching the ‘wrong’ conclusion and taking the ‘wrong’ decision from a substantive law point of view. This is so, it is argued, because the arbitrators may lack essential information, or because all relevant documents have not been submitted to them. The task of the arbitrators, however, it is submitted, is to decide the case on the basis of the facts, arguments, and evidence submitted to them; and not—to put it in dramatic terms—to find out the truth. After all it is the parties’ dispute. They must be allowed to determine the scope and complexity of the arbitration.

6.16  When the Procedural Code was introduced in 1948, it constituted a radical departure from practices which had become entrenched over a period of a century and a half and which took the form of an inquisitorial and largely written procedure. The three cardinal principles of the new judicial process were orality, immediacy, and concentration. The first among the cardinal principles simply means that all materials on which judgments are to be based must be presented orally. The second principle means that such presentation must be made directly to the court and the third that the main hearing is to be arranged without interruption. To permit, and prepare for, a main hearing without interruption, the Procedural Code provides for a pre-trial stage of the proceedings, which may be oral or written, or both, divided into any number of sessions and stretched over a period of time. In complex cases written pleadings may become voluminous and delays between the various stages of the pre-trial proceedings may become substantial. A commercial action in a Swedish court is commenced by the filing, by the plaintiff, with the court of a so-called summons application. The requirements of the Procedural Code with respect (p. 188) to such summons applications highlight three fundamental aspects of Swedish judicial procedure.

6.17  First, the summons applications will be dismissed by the court if the plaintiff does not specify the relief sought, ie the prayers for relief. Similarly, the respondent must respond directly in this regard and specify any relief which may be sought by him. These provisions relating to summons applications have a corollary in section 3 of Chapter 17 of the Procedural Code which provides that the judgment may not grant different, or more extensive, relief than has been properly demanded by a party. In other words, the parties’ prayers for relief have a preclusive effect. This rule of Swedish procedural law may be quite different from the law and practice of many other countries where a similar requirement of specificity is not imposed.

6.18  Secondly, the plaintiff must clearly identify the factual circumstances which, by virtue of the relevant provisions of the applicable law, in his view result in granting the prayers for relief.

6.19  Thirdly, both parties are required to state clearly all evidence on which they wish to rely and what they intend to prove by each specified item of oral testimony and/or documentary evidence. Needless to say, at this early stage of the proceedings such a statement of evidence will be of a preliminary nature and the parties will be given the opportunity to submit a final statement of evidence closer to the main hearing.

6.20  The relief normally sought from a Swedish court of law is performance, either in terms of specific affirmative action or the payment of monies. Declaratory judgments may also be rendered within the limits provided by relevant provisions of the Procedural Code.⁶

6.21  As mentioned above, the procedure laid down in the Procedural Code is geared towards preparing the case for the main hearing. The main hearing is usually divided into four stages, viz:

1. (i)  statement of the relief requested by each of the parties, which in most cases is simply a confirmation—sometimes with minor amendments and/or refinements—of the prayers for relief specified in the summons application;

2. (ii)  presentation of the facts of the dispute, including the facts which are immediately relevant for granting the relief sought;

3. (iii)  presentation of the evidence, both oral and documentary; all documentary evidence must be submitted, and all witnesses identified, well in advance of the main hearing; and

4. (iv)  closing arguments, the purpose of which is to weave together arguments of fact and law, due account taken of the evidence presented during the main hearing.

6.22  The entire main hearing is oral and in principle adversarial, rather than inquisitorial, in character. The Procedural Code sets forth a number of rules designed to satisfy the requirement of concentration and to avoid interruptions during the main hearing. The (p. 189) main hearing may thus continue for a number of days, or indeed weeks and even months, depending on the complexity and size of the case.

6.23  It should be noted that no new evidence may, as a matter of principle, be introduced during the main hearing.

6.24  As far as evidence is concerned, Swedish law is very liberal in the sense that there are few formal rules of evidence. Generally speaking, the concepts of relevance and admissibility are co-extensive. A Swedish court may freely evaluate all events in the course of the proceeding, matters formally relied on as proof by one side or the other and the demeanour of witnesses, as well as the general behaviour of the parties, their obedience to court orders, and claims of privilege with respect to testimony or documentary proof. However, even though a court of law may evaluate almost everything, it is expected to identify in its judgment each of the factors relevant to its ultimate determination.

6.25  With regard to witnesses, the general practice is that they are examined under oath by counsel for the parties. Another important aspect of oral testimony in Swedish courts is that the witness is both permitted and expected to relate its entire story, without interruption, and in particular without being prompted by direct questions from bench or bar. In practice, however, witnesses are often questioned by counsel, similar to the Anglo-American way. After the examination in chief, cross-examination by opposing counsel will usually follow. As a rule a witness is not allowed to attend the hearing before being examined.

6.26  As far as discovery is concerned, it must be mentioned that the scope of a request for production of documentary evidence is restricted by provisions of the Procedural Code to the effect that a court would not permit discovery of facts which are immaterial, or if proof can be adduced by different means at lesser cost and inconvenience. Documents may be withheld by virtue of the privileges generally corresponding to those relating to testimony, such as attorney–client privilege, for example.⁷

6.27  In appropriate cases, the possessor of a document—even if not a party to the dispute—may be directed to produce, in lieu of the document, certified relevant excerpts therefrom. Again, the obligation of the possessor may be limited to permitting a designated person, or persons, to study the document.

6.28  Before issuing a subpoena, the court must afford the alleged possessor the opportunity to present any objections he may wish to advance. For example, a person to whom the request is addressed may deny possession, assert a privilege, or dispute the importance of the document as proof. It is thus important to note that as a matter of principle discovery may be had only with respect to documents which can be assumed to be of importance as evidence in a particular case. Consequently, under Swedish law it is not possible to embark on so-called fishing expeditions which are sometimes said to be the result of American and English rules on discovery. It also follows from the foregoing that production of documents is not possible if the documents requested are intended merely to supplement and/or support the case (p. 190) of the requesting party. Generally speaking, either party is expected to analyse the facts and the legal position on the basis of available documents and other available information prior to submitting the summons application.

6.29  Swedish arbitration procedure is governed by the following basic principles. Violation of these basic principles may lead to the setting aside of the arbitral award.⁸

6.30  The arbitration procedure is to a large extent governed by the agreement of the parties, subject, however, to some, but in fact very few, statutory requirements. In practice the party autonomy is often exercised by referring to the rules of arbitration institutions, such as the SCC or the ICC. Pursuant to section 21, second sentence of the SAA, the arbitrators shall ‘act in accordance with the decisions of the parties insofar as there is no impediment to do so’.⁹ Depending on the parties and their interest in taking an active role with respect to the procedure, and also their ability to reach agreement on the procedure, the arbitrators’ procedural freedom may vary from case to case. It must also be noted, however, that the arbitrators’ procedural freedom may be restricted not only by the parties’ agreement but also by mandatory rules and public policy requirements of the law at the place of arbitration. In addition, the arbitrators are also expected take into account those provisions of international conventions on arbitration, for instance the New York Convention, that aim to ensure that the arbitration proceedings are conducted fairly.¹⁰

6.31  As mentioned above, section 21 of the SAA provides that the arbitrators shall ‘handle the dispute in an impartial, practical, and speedy manner’.¹¹ Although the impartiality rule finds its main application in the principle audi alteram partem discussed in para 6.32, it also has wider implications. For example, an arbitrator should never in the course of the proceedings meet either of the parties alone. This should not, however, prevent the chairperson from contacting either party by telephone in order to discuss or clarify practical matters with respect to the procedure. In such a case the chairperson should communicate any substantive information to the other party without delay. In addition, the arbitrators should take the necessary steps to ensure that any submission received from (p. 191) one party is without delay communicated to the other party, if need be by the arbitrators themselves.

6.32  A basic principle of Swedish arbitration procedure is that the arbitrators shall afford the parties ‘an opportunity to present their respective cases’ (section 24 of the SAA).¹² This rule is based on the universally recognized principles of arbitral due process and equality in the treatment of the parties enshrined in the SAA. The provision in section 24 of the SAA includes the right to review all documents and all other material pertaining to the dispute which are supplied to the arbitrators by the opposing party or another person. A party is also entitled to an oral hearing prior to the determination of an issue referred to the arbitrators, unless otherwise agreed between the parties. The arbitrators’ duty to give both parties an opportunity to present their respective cases does not prevent the arbitrators from acting against an obstructing party. Section 24(3) of the SAA stipulates that ‘[w]here one of the parties, without a valid cause, fails to appear at a hearing or otherwise fails to comply with an order of the arbitrators, such failure shall not prevent a continuation of the proceedings and a resolution of the dispute on the basis of the existing materials’.¹³

6.33  The arbitrators are thus authorized to proceed ex parte if a party fails without justification to appear or to plead his case. They are not, however, entitled to render a ‘default judgment’, but must base their award on the available material.¹⁴ The respondent’s failure to appear or to plead may be given evidentiary weight in this connection. Under the SCC Rules this is expressly set forth in Article 35(3) where the arbitrators are entitled to ‘draw such interferences as [they] consider [ … ] appropriate’, most likely negative ones. Although not specifically set forth in the SAA, this is a generally applicable rule.¹⁵ The arbitrators are required to reach a decision, however—since a reluctant respondent could otherwise frustrate the proceedings without sanction—and the award may therefore in fact closely resemble a default judgment.

6.34  Unless the parties have agreed to a particular ‘cut-off date’ with respect to documentary evidence (and statements of facts, if applicable) it would be difficult for arbitrators to dismiss or disregard such evidence and statements, even if presented at a late stage of the proceedings, in some cases as late as after the main hearing. Although the arbitrators are certainly entitled to refuse to admit evidence if such refusal is justified having regard to the time at which the evidence is offered,¹⁶ in practice arbitrators are often reluctant to dismiss evidence or statements because it could result in the award being challenged by the aggrieved party. Instead, the arbitrators often apply the principle of audi alteram partem and allow the other party to comment on the new documents and occasionally to submit rebuttal documents.

6.35  Unless the parties have agreed otherwise, arbitration proceedings are initiated when a party receives a ‘request for arbitration’.¹⁷ The requirements as to form and content of the request for arbitration are set out in section 19(2) of the SAA. However, the parties may agree on other ways of initiating arbitration proceedings, for example, by referring to a set of arbitration rules in the arbitration agreement.¹⁸

6.36  According to section 19(2) of the SAA, a request for arbitration must be made in writing and include an express and unconditional request for arbitration. A proposal to arbitrate or an expression of an intention to initiate arbitration does not constitute an express and unconditional request. If, for instance, a party notifies the other party that it will request arbitration if payment is not received by a certain date, such notice does not constitute an express and unconditional request for arbitration pursuant to section 19(2) of the SAA.

6.37  The second requirement according to section 19(2) of the SAA is that the request for arbitration must include a statement of the issue, covered by the arbitration agreement, and which is to be resolved by the arbitrators. It should be noted that the SAA does not require that the claim or the facts relied on in support of the claim be set in the request for arbitration. Rather, the claimant must set out its claim and supportive facts within the time fixed by the arbitrators.¹⁹ However, the request for arbitration must, nevertheless, identify the issue or issues to be resolved with sufficient specificity to give the respondent enough information about the dispute so as to be able to decide whom to appoint as arbitrator.

6.38  It should also be noted that the description of the issues to be resolved in the arbitration does not once and for all fix the scope of the arbitration, since the SAA provides a possibility for the claimant subsequently to introduce new claims, as well as for the respondent to present counterclaims.²⁰

6.39  Unless otherwise agreed, the claimant must also make his choice of arbitrator in the request for arbitration. Failure to do so means that the claimant has not made a ‘request for arbitration’ within the meaning of the SAA.²¹

6.40  A request for arbitration that does not fulfil all of the above-described requirements will not constitute a ‘request for arbitration’ pursuant to the SAA. Consequently, the arbitration proceedings will not be deemed to have commenced as a result of a defective request for arbitration.

6.41  However, there is always a possibility that the other party, nevertheless, accepts a defective request by appointing its arbitrator in accordance with section 14 of the SAA, or otherwise responds to the request for arbitration in a manner that implies acceptance of (p. 193) the commencement of the arbitration.²² In such a case, the arbitration proceedings will be deemed to have commenced despite the defectiveness. If such a defective request for arbitration is not accepted by the respondent, the proceedings will not commence until the respondent receives such supplementary information that makes the request for arbitration complete.

6.42  Under the SCC Rules the arbitration proceedings are deemed to have commenced when the request for arbitration is received by the SCC Institute (Article 8). In accordance with Article 6 of the SCC Rules, the request for arbitration shall include (i) details of the parties and their counsel, (ii) a summary of the dispute, (iii) a preliminary statement of the relief sought by the claimant, (iv) a copy or description of the arbitration agreement or clause under which the dispute is to be settled, (v) any comments on the number of arbitrators and the seat of arbitration, and (vi) if applicable, details of the arbitrator appointed by the claimant.

6.43  Upon filing the request for arbitration the claimant shall pay the registration fee (Article 7).²³ If the claimant fails to pay the registration fee after receiving a reminder from the SCC Institute, the request for arbitration shall be dismissed. The SCC Institute will send a copy of the request for arbitration and the documents attached thereto to the respondent. In so doing, the SCC Institute will decide on a time limit for the respondent to submit an answer (Article 9).

6.44  Under the SAA, service of the request for arbitration must, in principle, be effected personally.²⁴ It is therefore of outmost importance for the claimant to make sure that the other party actually receives the request for arbitration, and to secure proof thereof.

6.45  According to section 19 of the SAA, the arbitration commences at the time when the respondent receives the request for arbitration. The date of receipt of the request for arbitration is important for several reasons, eg in respect of statutory limitation periods, contractual cut-off dates, and lis pendens.

6.46  Similarly, service of the award must also be effected personally. This is important, since receipt of the award by a party marks the beginning of the period during which he may challenge the award under section 34 of the SAA, appeal a negative ruling on jurisdiction under section 36, or challenge the arbitrators’ decision as to their own compensation under section 41.

6.47  Documents in the arbitration other than the request for arbitration and the award do not have to be served personally on the recipient, but can be distributed in any way agreed upon between the parties and the tribunal, or as otherwise directed by the tribunal.

6.48  As mentioned above, as a general rule, service of the request for arbitration and the award must be effected personally, ie by actual receipt of the document by a person duly authorized to receive it on behalf of the recipient. The burden of proof in this respect is with the sender.

6.49  Personal service can take place by courier services with acknowledgement of receipt. Notification can also take place via letter or telefax provided that the sender ensures that he receives confirmation that the document was in fact received by an authorized representative of the recipient. The Supreme Court has ruled that a normal fax report is insufficient proof of personal service of documents.²⁵ Therefore, the sender must always request confirmation that the request for arbitration or other relevant document was in fact received. Such confirmation should be made by an authorized representative of the recipient.

6.50  It is uncertain how a document sent by email with acknowledgement of service sent to an authorized representative of the other party should be treated.²⁶ The technical improvement of email services renders it possible not only to obtain an acknowledgement of service but also an acknowledgement of reading in respect of emails. However, contrary to a signature in writing of the recipient, as in the case of courier services, emails can be received and read by other persons authorized by the email addressee. It is possible that such an acknowledgement would not suffice to prove that service of process has been effected.

6.51  The requirement that the request for arbitration must have been received by a person authorized to receive it on behalf of the recipient has been upheld also in connection with the enforcement of foreign awards in Sweden. Section 54(1)(2) of the SAA provides that: ‘a foreign award shall not be recognised and enforced in Sweden where the party against whom the award is invoked proves: that the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present his case’ (author’s emphasis).²⁷ In Lenmorniiproekt OAO v Arne Larsson & Partner Leasing AB, decided on 16 April 2010,²⁸ the Supreme Court held that although the wording ‘proper notice’ in the SAA and the New York Convention did not provide any clear guidance regarding the way in which such notice had to be submitted, the respect for due process required that the request for arbitration must in fact reach the respondent. The Supreme Court refused to enforce the award, since the request for arbitration had not been delivered to an authorized representative of the company, nor had the company otherwise been notified of the proceedings.

6.52  In Subway v A.E.,²⁹ the Supreme Court allowed for the enforcement of an award—which the Svea Court of Appeal had first refused to enforce—after the respondent A.E. had not participated in a New York-seated arbitration. With reference to Lenmorniiproekt OAO v Arne Larsson & Partner Leasing AB, the Supreme Court stated that there is a requirement that the (p. 195) request for arbitration must reach the respondent. Once the enforcement case reached the Supreme Court, Subway had furnished new evidence to support its contention that A.E., although not participating in the arbitration, had been reached by both the request for arbitration and subsequent submissions. Among other things, Subway submitted emails sent to an email address which included A.E.’s name. The evidence submitted further showed that A.E., while arguing that he did not use the email address in question, had in fact used it at a later point in time. This, the Supreme Court held, was sufficient to find that A.E. had been notified about the existence of the arbitration and thereby given a chance to present his case.

6.53  A ‘notices’ clause in a contract stipulates to whom notice may validly be made under the agreement, or the way in which notice is to be made, eg by email, letter, or fax. A ‘notices’ clause may also regulate when notice will be deemed to have been made under the agreement. It is uncertain under Swedish law whether service of the request for arbitration in accordance with the terms of such a provision will be considered valid and effective in the absence of proof of actual receipt by an authorized representative of the recipient.³⁰

6.54  In Lenmorniiproekt OAO v Arne Larsson & Partner Leasing AB , referred to above,³¹ the Supreme Court refused to enforce a Russian arbitral award despite the fact that the request for arbitration had been sent to an address, which was specified as respondent’s address in the arbitration agreement. However, respondent had changed its address, officially registered its new address with the Swedish Companies Registration Office, and moved offices before the arbitration proceedings started. Moreover, the respondent had not participated in any stage of the arbitration proceedings. Representatives of the respondent testified in the enforcement proceedings that they had not been aware of the fact that any arbitration proceedings had taken place until they were notified of the application to enforce the arbitral award. Although the Supreme Court in Lenmorniiproekt OAO v Arne Larsson & Partner Leasing AB did not make any general and principled statements regarding the effectiveness of notice clauses, it is reasonable to assume that the Supreme Court would also in other situations require that the claimant—even if notification takes place in accordance with a ‘notices’ clause—in the absence of a confirmation of actual receipt of the request for arbitration by the respondent, at the very least check public records to verify that the address provided in the agreement is still valid.

6.55  Where the party to be notified is a Swedish corporation, the Swedish Service of Documents Act has provisions specifying the persons who are competent to receive notification. Although the Supreme Court has ruled that the Service of Documents Act is not applicable to arbitration proceedings,³² the rules specifying the persons who are entitled to accept service on behalf of a Swedish corporation can probably provide some guidance also with respect to arbitration proceedings. For instance, in a Swedish joint stock company, any member of the Board of directors or any other person with so-called signatory powers (even if he is only entitled to sign in conjunction with some other person) is individually (p. 196) authorized to receive service on behalf of such corporation. It is therefore sufficient to notify any one of them.

6.56  Attorneys are sometimes authorized to accept service on behalf of their clients. In Swedish court litigation, if no limitation with regard to acceptance of service has been made, an attorney appointed to represent the client in proceedings generally is authorized to accept service. Although the SAA does not have any corresponding provisions, similar principles would probably be applicable to acceptance of service in arbitration proceedings. This was the approach taken by the Supreme Court in Christine L and Sven A (NJA 1999 p 300). It applied provisions of the Swedish Service of Documents Act by analogy to find that an arbitral award had been served on a party, when the award had physically been received by a messenger on the basis of an acknowledgement of receipt signed by the party, but when the party had not de facto had the opportunity to review the award.

6.57  Since it might sometimes be difficult to ascertain whether an attorney has been authorized to accept service, parties sometimes regulate this matter by including provisions in the contract, requiring particular ‘process agents’, authorized to accept service, to be appointed.

6.58  In principle, the SAA maintains the same requirements for service of the request of arbitration and other documents on parties domiciled or incorporated outside Sweden as it does for service on Swedish parties, ie proof that the document in fact was received by the party in question or an authorized representative of the party.³³ It is uncertain whether the party serving the request for arbitration or other documents may rely on provisions not requiring service to be effected personally that may be applicable in the jurisdiction where the recipient is domiciled or incorporated.

6.59  The SCC Rules do not have any specific rule regarding service of documents. However, as mentioned above, according to Article 8 of the SCC Rules, the arbitration is commenced on the date when the SCC receives the request for arbitration. This is a significant advantage compared to ad hoc arbitration under the SAA, since it avoids the uncertainty in establishing the exact point in time when the request for arbitration was received by the respondent, which may be of utmost importance if the proceedings are commenced close to the expiry of statutory or contractual time limits.

6.60  Moreover, once the request for arbitration has been received and accepted by the SCC, the SCC assumes responsibility for serving the request for arbitration on the respondent.

6.61  The SCC Rules do not have any provisions regarding service of the award other than that the ‘Arbitral Tribunal shall deliver a copy of the award to each of the parties and to the SCC without delay’.³⁴ Thus, it is the responsibility of the arbitral tribunal to serve the award on the parties. According to the SCC Arbitrator’s Guidelines,³⁵ the arbitral tribunal shall (p. 197) without delay distribute a hard-copy of the award to the parties. Furthermore, since 2019, SCC arbitrations are administered through a digital platform to which all entities involved in the dispute have access; the arbitral tribunal should also upload the award through this platform. The use of this platform is optional, ie up to the parties to agree to it.

6.62  Article 5 of the SCC Rules deals with notifications under the Rules. Section 1 stipulates that any notice or communication from the Secretariat and the Board shall be sent to the last known address of the addressee.

6.63  Section 2 of Article 5 explains that notices may be sent by any means of communication which provides a record of the sending thereof, including facsimile transmissions and emails.

6.64  Section 3 of Article 5 stipulates that a notice ‘shall be deemed to have been received by the addressee on the date it would normally have been received given the chosen means of communication’. This provision is primarily intended to deal with the situation when the respondent is trying to frustrate the arbitration by not communicating at all. It means that the SCC Rules do not require actual receipt of a document. This provision of the SCC Rules is similar to a corresponding provision in the rules of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation which was the arbitration court that rendered the arbitral award in Lenmorniiproekt OAO v Arne Larsson & Partner Leasing AB discussed above.³⁶ It cannot be ruled out that the Supreme Court would take a similar approach with respect to Article 5 of the SCC Rules were it to be tried by the court.

6.65  As we shall see in the following, the general, yet very fundamental, principles of Swedish Court procedure referred to in the foregoing³⁷ influence the conduct of arbitrations in Sweden. However, as mentioned above, ultimately the control of the conduct of the arbitration lies with the parties. Consequently, if the parties agree on a certain procedure, eg with respect to the submission of briefs or the examination of witnesses, that is the procedure which the arbitrators must follow.

6.66  Unless the parties have agreed otherwise, an arbitration in Sweden would typically go through the following stages, listed in chronological order:

1. (i)  The claimant serves a request for arbitration in writing on the respondent, or with an arbitration institution, as the case may be. The request must include (i) an express and unconditional request for arbitration, (ii) a statement of the issue which is covered by the arbitration agreement and which is to be resolved by the arbitrators, and (iii) claimants’ appointment of an arbitrator (section 19 of the SAA).³⁸

2. (p. 198) (ii)  The respondent serves its reply to the request for arbitration, in which he also appoints an arbitrator.³⁹

3. (iii)  The two arbitrators select a third arbitrator (who is generally appointed chairperson) (section 20 of the SAA).⁴⁰

4. (iv)  The claimant submits his statement of claim (once the arbitral tribunal has been duly constituted) in respect of the issues stated in the request for arbitration, including the circumstances relied on by him in support of his claim(s) (section 23 of the SAA).⁴¹

5. (v)  The respondent submits his statement of defence in relation to the claims and the circumstances relied on by the respondent in support of this case, as well as any counterclaim (Section 23 of the SAA).⁴²

6. (vi)  The initial stage of the proceedings is usually followed by further submissions from both parties, respectively (section 24 of the SAA) ie reply to the statement of defence and rejoinder.⁴³ At this stage it may also be necessary for the arbitrators to decide upon various procedural issues, such as jurisdiction, production of documents, amended claims, as well as the question of applicable law. In this respect, the arbitrators may conduct preparatory conferences and/or separate hearings to hear the parties’ arguments in respect of a particular procedural issue.

7. (vii)  In arbitrations in Sweden the parties are sometimes requested to submit their respective statements of evidence, indicating the witnesses and the documentary evidence they wish to rely on together with an explanation as to what they intend to prove with each witness and document.

8. (viii)  A main hearing is conducted, at which witnesses are heard and factual as well as legal argument is presented (section 24 of the SAA).⁴⁴

9. (ix)  In some cases the parties submit post-hearing briefs. Generally, Swedish arbitrators would seem reluctant to admit post-hearing briefs since they typically expect all the evidence and arguments to be presented at the main hearing.

10. (x)  The award is rendered in writing (sections 27 and 31 of the SAA).⁴⁵

6.67  It follows from what has been said above that the general principles of Swedish judicial procedure have a significant impact on the way counsel prepare their briefs and other submissions and how they prepare for the oral hearing, as well as on how arbitrators administer and conduct the arbitration in question. It is worthwhile to emphasize in particular three aspects which will typically influence counsel and arbitrators alike.

6.68  First, in the typical arbitration conducted in Sweden there is no room for discovery, as such a concept is understood in the Anglo-American system. Parties and counsel must thus initiate an arbitration and file briefs—arguing both facts and law—without having the benefit of the results of a discovery procedure. Parties are expected to obtain, (p. 199) themselves, and analyse, the documents and other information they deem necessary for their respective cases.

6.69  Secondly, there are very few rules of evidence in Swedish arbitration law, which means, inter alia, that it is unusual for arbitrators to reject evidence on the ground that it is inadmissible. Generally speaking, in practice a party will be allowed to rely on almost anything as long as it states that the document in question is important evidence for its case. The fact that a document is admitted in evidence does not mean, however, that its contents are automatically accepted. The arbitrators have the right, and the duty, freely to evaluate all the evidence presented by the parties. The free evaluation of evidence by the arbitrators is thus the remedy against the very liberal approach taken with respect to admissibility of evidence. The reason why arbitral tribunals are reluctant to reject evidence is of course the desire to avoid that the party in question will challenge the award arguing that it has not been able to present its case.

6.70  Thirdly, the principle of iura novit curia is a concept unknown to the Anglo-American system, but is generally accepted in Swedish court procedure. Literally, this doctrine means that the court knows the law and that—strictly speaking—it is not necessary for the parties to argue the law since the judge is the ultimate high priest of the law. In other words, under this principle party control does not extend to the law to be applied. One consequence of a strict application of the iura novit curia principle might be that a court decides a dispute on the basis of statutory provisions and/or legal principles which have not been argued by any of the parties. The outcome of the case may thus come as a complete surprise to both parties. Such consequences would be difficult to reconcile with the fundamental principle that arbitration is consensual in nature, and with the philosophy that the parties are the masters of the procedure. For these reasons it is very doubtful if the principle of iura novit curia is applicable in international commercial arbitrations conducted in Sweden. Most arbitrators would be reluctant to apply the principle in an international case.⁴⁶

6.71  To avoid the uncertainty with respect to iura novit curia most parties and counsel would typically try to present their respective cases with as great a specificity as possible, also with respect to applicable statutory provisions and/or legal principles, both in their written and oral submissions.

6.72  In virtually all arbitrations conducted in Sweden the parties exchange some form of written submissions. In practice, few commercial arbitrations will proceed without such documents. Generally speaking, the function of written submissions is initially to define the issues to be determined by the arbitrators and subsequently to elaborate on these issues and the facts and circumstances surrounding them.

(p. 200) 6.73  Generally speaking, most Swedish arbitrators would typically expect at least the first written submission following the request for arbitration, and the reply thereto, to be structured in the following three-tier fashion:

1. (i)  Prayers for relief (yrkanden);

2. (ii)  Legal basis for prayers for relief (the ‘legal grounds’) which often includes a short explanation of the facts which are relevant to the legal principle or rule relied on; and

3. (iii)  Facts and circumstances.

The same considerations apply with respect to counterclaims filed by the respondent.

6.74  The jurisdiction of the arbitrators is limited by the original arbitration agreement, as supplemented by agreements or admissions made by the parties in the course of the proceedings. The prayers for relief (and the respondent’s counterclaims, if applicable) also define the limits of the arbitrators’ powers and are thus of fundamental importance to the outcome of the proceedings. Accordingly, an award may be set aside, if challenged, if the arbitrators have exceeded their mandate by going beyond the matter submitted to them, and an award outside the scope of the arbitration agreement may constitute such an ultra vires action (section 34(2) of the SAA).⁴⁷ There is also, however, another aspect of section 34 of the SAA which relates to the written submissions of the parties and particularly to their prayers for relief. This aspect mirrors the rule of the Procedural Code that a court may not grant different or more extensive relief than has been properly claimed by a party: arbitrators cannot rule ultra petita. The other side of that coin is that the court must grant such relief to the extent that the opposing party does not object and such relief may lawfully be granted. The preclusive effect of the prayers for relief is as great in Swedish arbitration proceedings as in Swedish judicial proceedings. The prayers for relief thus have decisive implications for the res judicata effect of awards and for their lis pendens effect.

6.75  It may be appreciated therefore that the prayers for relief are of vital practical and legal importance, since they define the limits of the arbitrator’s powers. Consequently, parties are well advised to spend considerable time on analysing and formulating the prayers for relief. The parties must state explicitly and unequivocally what they wish the arbitrators to decide. In Sweden it is virtually unheard of to leave it to the discretion of an arbitral tribunal to order ‘appropriate remedies’, or to award interest which is ‘reasonable and just’.

6.76  One consequence of the importance of the prayers for relief is that they must, as mentioned above, state explicitly and unequivocally what the parties wish the arbitrators to decide. Put differently, the prayers for relief are expected to be specified to such a degree that there is no doubt with respect to the award requested. Unlike the Procedural Code,⁴⁸ the SAA does not have provisions requiring the claims to be specified in detail. In practice, however, a high degree of specification is expected. In addition, the arbitrators must always bear in mind that the lack of specification could result in an award ultra petita rendering the award voidable, see para 8.72 et seq. In addition, the arbitrators have an obligation to clarify the claims (p. 201) submitted by a party within the framework of their case management duties. Failure in this respect may also render the award voidable, see para 8.165.

6.77  Another important aspect is that the parties are expected to indicate and explain the legal basis for each prayer for relief. This is usually done by reference to the legal concept, or notion, as well as the statutory provision—if relevant—on which the prayer is based, for example, breach of guarantee clause in contract, defective goods, invalidity of contract, infringement of contractual rights etc, and describing the facts and circumstances constituting the legal basis.

6.78  It should be recognized that the form and content of the written submissions vary depending on the nature and scope of the dispute and the parties involved. Some written submissions may be quite voluminous, containing full arguments of both law and fact, whereas in other cases the written submissions may be characterized as a merely preliminary to the oral hearing.

6.79  Generally speaking, however, the first brief submitted by each party in an arbitration—ie the Statement of Claim and the Statement of Defence, respectively—is typically expected to set forth in detail the factual as well as legal arguments relied on by the party. All briefs submitted to the tribunal would cover both factual and legal issues. The philosophy underlying this approach is that the parties themselves should, and are expected to, narrow down the issues successively as they submit their briefs. Needless to say, this does not always happen. Parties may have a number of reasons—both good and bad—for not addressing directly factual and legal arguments presented by their counterparties. This is where the preparatory/preliminary hearing comes into the picture.⁴⁹ At this hearing the arbitral tribunal will seek further clarification of the parties’ positions and ask them to address—either at the hearing, or in an additional brief—issues raised by the other party. All this is done with a view to preparing the case for the main hearing.

6.80  In addition, in their first briefs, the parties would be expected to indicate, albeit in a preliminary fashion at this stage, the evidence, both documentary and oral, that they wish to rely on. Moreover, a Swedish arbitrator would typically focus on the legal issues involved from the very outset of the proceedings. This explains why the prayers for relief play such a crucial role in arbitrations in Sweden. It is thus necessary for the parties to review and analyse the facts—and in particular their relevance to the legal issues involved—prior to submitting their briefs, such that they are able to present to the tribunal those facts which are relevant to the legal issues involved.

6.81  As a practical matter, it is noteworthy that the parties are expected to submit supporting documentation together with their briefs. Indeed they are expected to refer to such documents and to explain the relevance of the documents to the arbitrators. In most cases the majority of such documents would then be listed as evidence in the statement of evidence which the parties will often be asked to submit prior to the main hearing.⁵⁰

(p. 202) 6.82  The respondent may raise a counterclaim or set-off claim, provided that such claim falls within the scope of the arbitration agreement.⁵¹ The counterclaim or set-off claim may be raised in the statement of defence (section 23(2) of the SAA).⁵² A counterclaim or set-off claim should be allowed in the arbitration proceedings if the arbitrators do not consider it inappropriate to adjudicate such claims. It is thus within the discretion of the arbitrators, taking into consideration the time at which the counterclaim or set-off claim is submitted, and other circumstances, to decide whether or not the counterclaim or set-off claim should be allowed. The travaux préparatoires state that the presumption is that arbitrators should be generous in allowing any new claim, for instance counterclaims and set-off claims, as long as these claims fall within the scope of the arbitration agreement.⁵³ However, the timing of such claim is of fundamental importance since it is particularly vital to prevent obstruction of the proceedings.

6.83  Similar to what has been discussed above with respect to counterclaims and set-off claims, both parties are, as a matter of principle, entitled to amend or supplement their respective claim (section 23(2) of the SAA).⁵⁴ One peculiarity in Swedish arbitration should be noted in this respect, viz, that the parties may enter into a valid arbitration agreement orally or by conduct, including by an omission to object.⁵⁵ This implies that in case a party articulates a claim that goes beyond the original arbitration agreement, and is therefore not covered by it, that claim may, nevertheless, be allowed should the opposing party fail to raise an objection thereto.⁵⁶ In such a situation the original arbitration agreement is deemed to have been extended to cover also the new claim.

6.84  In the case of an amendment of, or supplement to, a claim being allowed, where the timing of the amendment or supplement causes a delay in the proceedings, this may have an impact on the allocation of costs among the parties.⁵⁷

6.85  In disputes involving more than two parties, the issue of so-called cross-claims arises from time to time. For example, in a dispute under a shareholders’ agreement a respondent shareholder may wish to raise claims against a shareholder other than the claimant. If this eventuality is foreseen in the shareholders’ agreement, this is of course possible. If the parties have not agreed on the possibility of filing cross-claims, it would not seem to be possible. The SAA is silent on the issue. The SCC Rules also do not envisage this possibility. In fact, most institutional rules are silent with respect to cross-claims. To the extent that cross-claims are allowed, they are based on the agreement of the parties concerned.

6.86  Occasionally parties in an arbitration submit claims for payment to a third party, ie an entity or individual who is not a party to the arbitration agreement and therefore not to the arbitration either. For example, a parent company might file a claim for payment to a subsidiary, (p. 203) or vice versa. The Supreme Court has concluded that such claims could be made in court proceedings, but only in ‘clearly exceptional circumstances’.⁵⁸ In the case in question, the Court found that no such circumstances existed. Despite several attempts, no case is known where such a claim has been successful in an arbitration. The explanation is simply that the rights and obligations following from an arbitration agreement are, as a matter of principle, limited to the parties.⁵⁹

6.87  Where a party withdraws a claim, the arbitrators shall dismiss that part of the dispute, unless the opposing party requests that the arbitrators rule on the claim (section 28 of the SAA). This provision unconditionally entitles the opposing party to obtain a final settlement of the dispute.⁶⁰ It may, however, be difficult to distinguish between a withdrawal and a limitation of a claim. The right to have the arbitrators’ ruling on a claim, in this respect, only applies to the former situation. This question is closely related to the doctrine of res judicata.⁶¹ If the party were allowed to present the withdrawn claim in a new dispute, then there is a withdrawal of the claim. If, on the other hand, the withdrawn claim, eg, an alternative claim, could not be examined in a new arbitration dispute, then there is a limitation of the claim.⁶² The purpose of section 28 of the SAA is to prevent the opposing party from initiating new arbitration proceedings concerning the same claim.⁶³ If the claim is withdrawn in its entirety, the arbitration proceedings shall be terminated by issuing an award in accordance with section 27 of the SAA.⁶⁴ The SAA, however, does not regulate whether a partial withdrawal or limitation of the claim should be decided in an award or in an order. The difference is significant, inter alia, in respect of the possibility to appeal against the decision. An award terminating the arbitration proceedings may be appealed against and reviewed by the Court of Appeal within three months from the receipt of the award (section 36 of the SAA). By contrast, it is not possible to appeal separately against an order in the course of the arbitration proceedings.⁶⁵

6.88  Although the oral hearing usually concludes the submission of arguments and evidence by the parties, the parties may agree to further briefing by way of so-called post-hearing briefs. Sometimes post-hearing briefs may substitute the oral closing arguments, giving the parties a possibility to summarize their respective legal arguments and to comment on the oral testimonies of witnesses and experts taken at the hearing. In some situations, the arbitrators (p. 204) may also ask the parties to comment on a particular issue which has arisen at the hearing or a particular argument or piece of evidence presented (and accepted) at a late stage of the proceedings, or even during the hearing. Post-hearing briefs can also be used to limit the duration of the hearing or when the time allocated for the hearing turns out to be insufficient to permit the parties to present their cases.

6.89  The parties should be prevented from submitting new unsolicited material after the hearing. Indeed, it is good practice for arbitrators to declare the evidentiary record closed at the end of the hearing.⁶⁶ However, arbitrators should have the discretionary power, in exceptionally compelling cases, to admit materials presented even after the record has been declared closed at the hearing.⁶⁷ This may, of course, lead to further submissions and even to an additional hearing. Needless to say, it is usually desirable to restrict the scope of post-hearing briefs in order to avoid the dispute turning into something completely different including new arguments and evidence. In practice, in addition to restricting the scope of the post-hearing briefs, they may be limited to a specific number of pages. It is a frequently adopted practice that post-hearing briefs are submitted simultaneously in order not to encourage the parties to comment further on each other’s briefs.⁶⁸

6.90  The purpose of presenting evidence is to assist the arbitrators to determine issues of fact and disputed issues of opinion presented by ‘experts’. Needless to say, the presentation of evidence is of great importance to the outcome of almost every dispute.

6.91  Generally speaking, the presentation of evidence in Swedish arbitrations does not create problems. To the extent the parties wish to hear witnesses, the witnesses attend, generally on a voluntary basis, and the parties submit to the arbitrators the documentary evidence they wish to rely on.

6.92  The Procedural Code foresees four basic methods of presenting evidence, viz:

1. (i)  production of documents

2. (ii)  hearing of witnesses

3. (iii)  hearing of experts

4. (iv)  inspection of the subject matter of the dispute.

6.93  In Swedish arbitrations the same methods of presenting evidence are available and may be used in a number of different ways by the parties in trying to prove their respective cases. It is important to recognize, however, that each arbitral tribunal may take a different approach (p. 205) as to how and when evidence is to be presented. The tribunal will usually seek to reach a consensus with the parties on such matters, unless the parties have already agreed thereon.

6.94  Under the SAA the initiative with respect to evidence is exclusively in the hands of the parties.⁶⁹ Section 25(1) of the SAA stipulates that ‘the parties shall supply the evidence’. This includes documentary evidence, witnesses, experts and, if applicable, site inspections. However, the arbitrators may on their own motion appoint experts, unless both parties are opposed thereto.⁷⁰

6.95  The dividing line between ‘fact’ and ‘opinion’ mentioned above is not always clear. One example is whether the contents and application of ‘foreign’ law must be established as matters of fact or whether it is a question of law. As far as international commercial arbitrations in Sweden are concerned, foreign law is usually treated as a matter of fact. As a consequence, the parties submit documentation establishing the contents and interpretation of the applicable law(s). The contents of foreign law may be established by extracts from statutes or cases. However, it is the application of law that is often the crux of the matter. In this respect, the parties may wish to rely on expert opinions and/or on the writings of legal authorities.

6.96  The parties may certainly agree, and are often asked to agree on particular rules for the presentation of the evidence, eg the use of written witness statements, see para 6.415. In arbitrations in Sweden chaired by a Swedish lawyer, the parties are sometimes asked to submit their respective statements of evidence, indicating the witnesses and the documentary evidence they wish to rely on.

6.97  Although not applicable to arbitration proceedings in Sweden, unless the parties so agree, the IBA Rules on the Taking of Evidence in International Commercial Arbitration (‘IBA Rules’)⁷¹ may play a role in such proceedings as guidelines in respect of issues of evidence. The IBA Rules may serve as a resource for parties and arbitrators in order to enable them to conduct the evidence phase of international arbitration proceedings in an efficient and economical manner.⁷² The IBA Rules provide mechanisms for the presentation of documents, witnesses of fact, expert witnesses and inspections, as well as for the conduct of evidentiary hearings. The IBA Rules are designed to be used in conjunction with, and adopted together with, institutional or ad hoc rules or procedures governing international commercial arbitrations. In practice, the parties seldom agree to apply the IBA Rules strictu senso, but rather agree to use them as guidelines.

6.98  The principle of party autonomy applies also with respect to evidence, save for some limited powers of the arbitrators to dismiss evidence manifestly irrelevant or untimely presented, see para 6.101. As mentioned above, section 25(1) of the SAA stipulates that the parties ‘shall supply the evidence’. This means that the parties are in charge of the evidence, including witnesses, that they wish to rely on and the way the evidence will be presented to the arbitrators. Thus, the parties cannot rely on assistance from the arbitrators to find out (p. 206) and present the facts. Notwithstanding this, parties may benefit from the arbitrators’ case management activities in this respect, at least in the sense that the arbitrators may indicate which facts they deem relevant. On the other hand, any case management activity must be carefully balanced so as not to jeopardize the impartiality of the arbitrators.

6.99  For the parties, the presentation of evidence is crucial. If irrelevant and insufficient evidence has been presented and caused the party to lose the dispute, there is no second chance to present additional evidence. Also, if the tribunal has evaluated evidence in a way not anticipated by the party, this cannot serve as a ground to have the award set aside. Not even if new important evidence were to come to light only after the award has been rendered, is it possible to have the award set aside.⁷³ The foregoing underlines the crucial importance for the parties properly to prepare and present evidence to the arbitrators. The arbitral award can only be based on facts and evidence presented to the tribunal by the parties. The private knowledge of the arbitrators can thus not serve as the basis for their decision.

6.100  In the majority of cases, the parties are usually able to reach an agreement with respect to evidentiary matters and their respective witnesses will voluntarily attend the main hearing, at the request of the party relying on them. If they do not, the arbitrators’ powers are restricted. The arbitrators have no subpoena powers and cannot compel a witness or an expert to appear at the hearing. In addition, the arbitrators have no power to administer oaths and truth affirmations. The criminal sanction of perjury is therefore not available if a witness fails to speak the truth. Ultimately, a party must rely on the possibility to seek court assistance in this respect,⁷⁴ see para 6.174.

6.101  In spite of the restrictions described above, the discovery of reliable evidence is assisted by two factors. First, the arbitrators are entitled to allocate evidentiary weight, in light of all the circumstances, to a person’s (and especially a party’s) refusal to be examined, to answer specific questions, or to produce documents. Second, an intensive cross-examination may be a more powerful instrument in extracting the truth than any oath or truth affirmation.⁷⁵ In addition, the practice in international commercial arbitration shows that very often reliance on documentary evidence is favoured by international arbitral tribunals and that the role of the witness is often reduced to comment on such documentary evidence.⁷⁶

6.102  Generally speaking, the Swedish law of evidence allows the parties to rely on virtually all kinds of documents, statements, and occurrences to prove their case. The arbitrators in their discretion may freely evaluate the evidence presented by the parties, as well as all occurrences during the proceedings, for example, compliance with the arbitrators’ orders.⁷⁷ It is important for lawyers coming from common law countries to appreciate this freedom from restrictions with respect to the admissibility of evidence. Consequently, reliance cannot successfully be placed on any technical rules concerning admissibility of evidence.

(p. 207) 6.103  Rather, most arbitrators would be reluctant to accept any restrictive rules of evidence that prevent them from establishing the facts they deem necessary for deciding the dispute. Even though the arbitrators have the power to reject evidence as irrelevant, this is relatively seldom done in practice. Given the fact that it is difficult to determine before the hearing what is irrelevant, and considering that no second hearing on the merits may take place, most arbitrators tend to take a rather liberal approach in this respect. Under the Swedish law of evidence there are no restrictions against submitting evidence which the opposing party alleges is forged, or has been stolen from him. Such documents would not be rejected as inadmissible per se. Likewise, there is no prohibition against hearsay evidence. It will be for the arbitral tribunal to take account of such factors when evaluating the evidence in question.

6.104  Evidence may be rejected if it is presented too late in the arbitration or if it is manifestly irrelevant. This follows from section 25(2) of the SAA. The SAA does not, however, set forth any time limits for the presentation of evidence. As a rule the parties state their evidence well in advance of the final hearing in their respective statement of evidence and/or submit it together with their respective briefs. Nevertheless, it may happen that one of the parties wishes to introduce new evidence immediately prior to or sometimes even during the final hearing. In such situations the arbitrators have the power to reject the evidence, at least if it can be assumed that the new evidence is presented in bad faith, eg with a view to delaying the arbitration or to surprising the opponent.

6.105  In Cypress Oil Fields Holdings Limited v China Petrochemical International Company Limited,⁷⁸ the Svea Court of Appeal was faced with an application to set aside an award, or declare it invalid, based inter alia on the tribunal’s handling of evidence, which the challenging party argued had violated the principle of equal treatment. The tribunal had, inter alia, determined that no evidence could be introduced after a certain date, two weeks before the final hearing, but then nevertheless allowed one side to submit new evidence past this date. The evidence in question was a number of documents earlier asked for during the document production phase, as well as evidence referred to during the examination of a witness during an earlier hearing and two updates to an already submitted expert report. The challenging party argued that the tribunal, by allowing this evidence, acted contrary to the principle of equal treatment by not giving it the time to respond to the new evidence.

6.106  In discussing the possibility to accept evidence introduced after the date determined by the tribunal, the court emphasized that there is generally a limited scope for a party to introduce such evidence. At the same time, the court stated that section 25(2) of the SAA provides the tribunal with a certain discretion to reject evidence, but that scholarly writing has argued that the rejection of new evidence should be used cautiously. In sum, the court said that a tribunal is entrusted with a certain ‘discretionary space’ to handle evidence submitted after a deadline,⁷⁹ which in the case before it meant that the court did not set aside the award on this ground.

6.107  As mentioned above, arbitrators are generally rather reluctant to reject evidence. The reason is of course that the rejection may be relied on as a ground to challenge the award arguing (p. 208) that the party in question has not been given the opportunity to present its case.⁸⁰ If, however, the arbitrators are minded to reject evidence, a decision to this effect should be taken without delay, and certainly well in advance of the main hearing. If evidence is rejected because it is deemed to be manifestly irrelevant, the party in question may want to submit other documentary evidence and must thus be given sufficient time to do so. A decision by the arbitral tribunal to reject evidence cannot be appealed during the course of the arbitration. In this sense such a decision is final and binding. The decision can, however, be relied on by the party in question in an attempt to challenge the resulting award.

6.108  Occasionally the arbitrators may accept new evidence, even if offered during the main hearing, typically because it is deemed to be of potentially vital importance. In such situations, the arbitrators will offer the other party the opportunity to submit rebuttal evidence after the hearing and/or to submit a post-hearing brief commenting on the evidence in question. Unless otherwise agreed by the parties, Swedish arbitrators are, however, usually reluctant to allow post-hearing briefs.⁸¹ As mentioned above, the underlying philosophy is that the main hearing should be the final step in the arbitration, save for the rendering of the award.

6.109  With respect to the admissibility of evidence, the paramount principle of party autonomy must also be borne in mind. Hence, the parties are free to agree on issues of evidence, inter alia, with respect to formal requirements, certain restrictions with respect to the right to offer evidence, eg number of witnesses or experts on particular issues, and also exclusivity, eg a valuation report provided by an expert which the parties agree to accept beforehand.⁸²

6.110  The SAA, as well as most Arbitration Acts in other jurisdictions, does not require documents to be produced in the original, unless the other party challenges the authenticity thereof. The practice in international arbitrations in Sweden, is that a document drawn up in another language than the language of the proceedings is submitted in the original language with a translation into the language of the proceedings attached to it. For certain arbitration-related proceedings (under sections 2, 33, 34, and 36 of the SAA) in Swedish courts, the court hearing the case may, upon request of a party, accept oral evidence in English without interpretation into Swedish. This follows from section 45a of the SAA, which was added in the 2019 revision.

6.111  As mentioned above the IBA Rules are often used as a guideline for the determination of admissibility of evidence in arbitration proceedings. The IBA Rules provide for an ‘international standard’ of admissibility of evidence. Article 9(2) of the IBA Rules stipulates:

6.112  This very much corresponds to the approach taken by arbitral tribunals in international commercial cases sitting in Sweden. One important difference must be noted, however: arbitrators sitting in Sweden would not exclude evidence on their own motion. The adversarial nature of arbitration and the principle of party autonomy require them to act only at the request of one of the parties.

6.113  In international arbitration, documentary evidence will often be of decisive importance to the outcome of the case. There are no provisions in the SAA defining documentary evidence. Generally, the lack of a definition is of less importance, since Swedish law allows the parties to rely on virtually all kinds of evidence. However, with respect to production of documents the distinction between documentary evidence and other evidence may be important. Today there are many categories of information which do not exist in written form, eg computerized information. In this respect, guidance could perhaps be sought from the Procedural Code.

6.114  Pursuant to Chapter 38, section 2 of the Procedural Code dealing with the production of documents, a party is entitled to obtain written documents only. However, the Procedural Code was adopted more than sixty years ago. Therefore this restriction has been interpreted by the courts. The Swedish Supreme Court has, for example, ruled that a court may order a party to submit computer printouts of information available only by computer. The decision illustrates that a request for disclosure of this kind of information can also be granted.⁸³ Accordingly, as long as the information is stored in a retrievable form, eg computerized, film, magnetic tape etc, it will probably be subject to production.

6.115  As far as the presentation of documentary evidence is concerned this is usually agreed between the parties and the arbitral tribunal. As a rule the parties will submit documentary evidence together with their respective briefs. In many arbitrations the tribunal will, in consultation with the parties, determine a cut-off date after which no new documents can be submitted. The purpose is of course to prevent surprises and to afford the parties an equal opportunity to present their respective cases. Sometimes the arbitrators will ask the parties to submit so-called statements of evidence, which is the accepted practice in Swedish court proceedings. Such statements cover documentary as well as oral evidence. With respect to (p. 210) documentary evidence, the statement of evidence is expected to identify all documents that the party wishes to rely on and to explain, with respect to each document, what fact(s) the document is intended to prove. Needless to say, such statements of evidence are very helpful both for the arbitrators and the opposing party.

6.116  In contrast to the Procedural Code⁸⁴ and the SCC Rules,⁸⁵ the SAA does not have provisions concerning production of documents. Notwithstanding this, in practice it is accepted that arbitrators, at the request of a party, may order the opposing party to produce documents in its possession. This authority is based on section 25 of the SAA. The arbitrators have no authority to order production of documents which are in the possession of third parties.

6.117  Normally the production of documents does not present problems: the parties submit the documents they wish to rely on. However, if one party is in possession of documents which are unfavourable to his case and the other party wishes to rely on them, problems may arise. It may well be that the tribunal—at the request of one party—orders the other party to produce such documents. It is important to note, however, that the tribunal has no subpoena powers. There is consequently no way of enforcing such an order. The arbitrators may, however, attach evidentiary weight to the fact that a party refuses to abide by such an order.⁸⁶ On the other hand, it is possible to obtain evidence with the assistance of Swedish courts, including production of documents, subject to the approval of the arbitral tribunal.⁸⁷ This possibility is, however, seldom used in practice. Moreover, even if this means that discovery is thus available, this procedure is quite different from discovery procedures practised in common law countries.⁸⁸

6.118  It is not unusual that the parties agree, at least in principle, to discovery, in the sense that they agree to provide the opposing party with identified documents requested by him. Acting on requests for discovery by the parties, Swedish arbitrators will typically follow the rules and principles of discovery contained in the Procedural Code, unless the parties have agreed on specific rules to be applied with respect to discovery. This means, inter alia, that discovery will not be permitted as regards immaterial documents, or if proof can be obtained by different means and at lesser cost. For a tribunal to determine whether a document is immaterial or not the document must be identified, or at least be characterized by category.

6.119  This very much corresponds to the approach taken in the IBA Rules. It is not unusual for parties to agree to use the IBA Rules as guidelines with respect to production of documents. Article 3(3) of the Rules stipulates:

6.120  As a consequence of the foregoing, under Swedish law parties cannot be ordered to produce lists of documents which are, or may have been, in their possession and which might be of general relevance in the dispute. As a matter of principle, parties can be ordered to produce documents, only if they may constitute evidence in the dispute. As mentioned above, this means that so-called fishing expeditions are not possible under Swedish law, save, of course, for the unlikely event that the parties would so agree. It should also be noted that the obligation to produce documents in a Swedish court proceeding is limited in the same way as the obligation to give oral testimony. This means, for example, that documents falling under the attorney–client privilege may not be produced to a court, nor to an arbitral tribunal, unless the party in question agrees thereto.

6.121  Even though there are no provisions in the SAA to this effect, the generally held view seems to be that the privileges laid down in the Swedish Procedural Code⁸⁹ should as a matter of (p. 212) principle apply by analogy in arbitrations.⁹⁰ If the person in whose possession the relevant document is, has his domicile outside Sweden, the rules of privilege applicable at his domicile may also be applicable. Article 9(3) of the IBA Rules sets forth recommendations for how an arbitral tribunal can deal with issues of privilege.

6.122  On the practical level, arbitrators usually try to reach a consensus with the parties on such matters as authenticity and translation of documents, number of copies to be submitted etc.

6.123  In order to manage requests for production of documents efficiently, parties and arbitrators often agree to use the so-called ‘Redfern Schedule’. The Redfern Schedule is a chart containing the following four columns:

• First Column: identification of the document(s) or categories of documents that have been requested;

• Second Column: short description of the reasons for each request;

• Third Column: summary of the objections by the other party to the production of the document(s) or categories of documents requested; and

• Fourth Column: the decision of the arbitral tribunal on each request.

6.124  The chart is exchanged between the parties, and if need be submitted to the arbitral tribunal for decision.

(p. 213) 6.125  In many cases the arbitrators will instruct the parties to request documents from each other before they seek the assistance of the arbitrators, and suggest that correspondence and documents exchanged in the course of this process should not be sent to the arbitrators. This is usually an efficient practice which avoids unnecessary work for the arbitrators and therefore saves money for the parties.⁹¹

6.126  In the Swedish Procedural Code a distinction is made between witnesses and party representatives. A witness testifies under oath, whereas a party representative testifies under a so-called truth affirmation. No such distinction is made in the SAA. As mentioned above, in arbitrations no national rules of evidence apply, unless the parties so agree. As a consequence any person can testify in an arbitration. Needless to say, when evaluating oral evidence the arbitrators will take into account whether testimony has been given by a party representative or by a witness in the strict sense of the word, ie by a person who is not related to the party in question. In the following reference will be made to ‘witnesses’ irrespective of whether they are party representatives or witnesses in the narrower sense. In one situation, however, tribunals tend to maintain the difference. As a rule, witnesses are not allowed to be present prior to their own testimony, unless otherwise agreed by the parties. Party representatives may, however, participate in the hearings from the very beginning. The SAA does not deal with this situation, but Swedish arbitrators tend to follow the provisions of the Procedural Code in this respect.

6.127  As mentioned above, it is the responsibility of the parties to provide the evidence to be reviewed by the tribunal. This includes the responsibility to make sure that witnesses are present. Each party is responsible for witnesses called by it. In most cases the parties will have agreed, in consultation with the arbitrators, on a timetable for the hearing, which means that the presence of witnesses does not usually present a problem. If, such an agreement notwithstanding, a witness fails to appear at the hearing, the party having called the witness will usually have to bear any negative consequences of such failure. Only in rare situations would the arbitrators postpone the hearing. This could happen, for example, if the party in question can show a valid cause for the failure of the witness to appear, eg serious illness, breakdown in communications etc, and if the witness is crucial for that party. Rather than postponing the hearing, the arbitrators would probably try to arrange for the witness to testify via videolink or telephone. Another possibility would be to schedule a subsequent, separate session for examination of that witness.

6.128  In arbitrations in Sweden it is generally accepted that witnesses may be interviewed and prepared before they testify orally. The same approach is taken by the IBA Rules, Article 4(3) of which stipulates:

(p. 214) 6.129  It goes without saying that there are limits in this respect. Experienced arbitrators are usually good at detecting ‘over prepared’ witnesses, in which case the effect is usually counter-productive. It must always be kept in mind that the ultimate purpose of witness testimony is to convince the arbitrators, not the client and not the opposing party.

6.130  As previously mentioned, arbitrators have no power with respect to witnesses and thus cannot compel a person to appear as a witness. Also, pursuant to section 25(3), arbitrators are not entitled to administer oaths, which means that witnesses cannot testify under oath before an arbitral tribunal.⁹²

6.131  There are several different methods of taking evidence by hearing and examining witnesses. In international commercial arbitrations today it is common practice that the parties submit written statements of the witnesses on whose testimony they wish to rely.⁹³ Sometimes such statements are referred to as affidavits, which typically means that they are submitted under oath.⁹⁴ More often, however, they are simply signed by the witness. By using written witnesses statements the arbitration can be conducted in a more speedy and efficient manner. In such cases, the witness statement will usually stand in lieu of the direct examination of the witness, which usually means that the hearing can be shortened dramatically, by starting with cross-examination of the witness, followed by re-direct examination. Usually the arbitrators try to reach agreement with the parties as regards the use of written witness statements. When it comes to the hearing of witnesses, it should be recalled that it is for the parties themselves to decide what witnesses they wish to rely on.

6.132  In most arbitrations the parties try to agree on the order in which witnesses are to be heard. If the parties cannot agree, the arbitral tribunal will determine the order, but usually with some degree of cooperation from the parties. The traditional approach is to examine all the witnesses called by the claimant first and then all the witnesses called by the respondent. Needless to say, there may be variations of this approach depending on the circumstances in the individual case and on the agreement of the parties.

6.133  Generally speaking, witnesses would be expected to be called with a view to proving disputed facts. Most Swedish arbitrators would not look favourably on witnesses who ‘plead’, or explain, the case of the party who has called them. This is for counsel to do in the written submissions and during oral argument. Furthermore, there is no need to have witnesses ‘confirm’ the contents of documents which have been submitted as evidence. It is sufficient for counsel to refer to such documents in the written submissions and during the opening and/or closing statement at the main hearing. During closing arguments counsel is expected to draw factual and legal conclusions from, and build arguments on the basis of, such documents.

6.134  The examination of witnesses usually proceeds in three stages, viz, (a) direct examination, (b) cross-examination, and (c) re-direct examination.

(p. 215) 6.135  In arbitrations in Sweden, the examination of witnesses is done by counsel, unless the parties have otherwise agreed. Needless to say, the arbitrators have the right to put questions as well. Traditionally, however, it is deemed appropriate for the arbitrators to wait with their questions until counsel have finished their examination of the witness. Sometimes all the questions from the arbitrators are channelled through the chairperson. This is not necessary, however, since the party-appointed arbitrators too should have the possibility to put questions. Generally speaking, arbitrators are expected to tread very carefully, if at all, in areas which have not been addressed during examination by counsel, lest the impartiality of the arbitrators be questioned.

6.136  In cases where written witness statements are used, no direct examination will, as a rule, take place, save possibly for a few introductory questions. The witness will thereafter be handed over for cross-examination.

6.137  The general purpose of the direct examination is for the witness to prove disputed facts which are relevant to the case, but not, as mentioned above, to ‘plead’, or explain, the case of the party who has called him.

6.138  In arbitrations where no written witness statements are used, the arbitrators would usually ask the parties to submit statements of evidence. As far as witnesses are concerned the statements indicate the circumstances with respect to which the witness will testify as well as what fact the witness will prove. The primary purpose of these statements is to inform the opposing party so as to facilitate the preparation of his case and evidence, and to avoid surprises at the main hearing. As a matter of principle the witness cannot go beyond the theme indicated in the statement of evidence. Opposing counsel usually make sure that the other party is not taken by surprise as a result of statements going beyond the theme indicated in the statement of evidence. If such statements are made anyway, experienced arbitrators are usually good at finding practical solutions to such a problem, rather than postponing the hearing to allow the other party time to consider rebuttal evidence.

6.139  During direct examination counsel is not allowed to put leading questions, ie questions which invite a certain answer by the witness.⁹⁵ Although witnesses are often ‘prepared’ by counsel⁹⁶ before the main hearing it may be difficult to uphold the objective of having the witness testify in a comprehensive and coherent way without interruption. In practice, therefore, counsel will usually assist the witness by putting questions to it from the very outset of the examination.⁹⁷

6.140  It is sometimes said that from a tactical point of view it may be prudent to use the direct examination as a way to ‘defuse’ potentially difficult and vulnerable questions and areas of inquiry. The underlying philosophy is simply that this will be less damaging than if the witness were to answer such questions during cross-examination.⁹⁸

(p. 216) 6.141  The purpose of cross-examination in arbitrations, just as in court litigation, is generally to weaken the case for the side that has called the witness—typically by trying to undermine the credibility of the witness—and to strengthen your own case by trying to establish facts which are favourable to you. This being said, however, in most cases it is very difficult entirely to ruin the credibility of the other party’s witness or to reveal him as a liar through cross-examination. Rather, it is usually more efficient to point to a few flaws in the witness testimony—the cross-examination should be ‘a stiletto, not a sledge hammer attack’.⁹⁹ A different approach is to use cross-examination as a way to argue your case through the testimony of the other party’s witnesses. Generally speaking, it is believed that most arbitrators would find such an approach unhelpful. In discussing the methods to employ when cross-examining a witness it is crucial to answer the following questions: Has the witness testified to anything that is material against us? Has his testimony injured our side of the case? Has he made an impression with the arbitrators against us? Is it necessary for us to cross-examine him at all?¹⁰⁰ Only if the three first questions are answered in the affirmative should the last question be answered in the same way.

6.142  Needless to say, thorough preparation of the cross-examination is essential. One complicating factor in this respect is that the cross-examiner in international arbitration will usually not know what the witness will answer, because the witness will not have given any depositions, unless the parties have agreed thereto.¹⁰¹ On the other hand, preparation of the cross-examination is facilitated when written witness statements are being used. There is always a risk, however, that the witness cannot, or will refuse to, answer questions because he does not remember, or because he claims that he has not had the opportunity to refresh his memory.

6.143  There are some ways to overcome, or at least diminish, the aforementioned difficulties. First and foremost, a detailed knowledge of the case and all documents related thereto gives the cross-examiner an advantage and an opportunity to reveal weaknesses in the witness’s answers. Secondly, during cross-examination counsel may put leading questions to the witness.¹⁰² In fact, all, or most, questions should ideally be leading. Thirdly, the use of documents as the starting-point, or as the basis, for questions often strengthens the position of the cross-examiner and leaves less room for the witness to argue.

6.144  The techniques of cross-examination are many and varied.¹⁰³ Some prefer short and quick questions so as to keep the witness under control throughout the cross-examination. That is, at least, the hope. Others would prefer questions which are woven in into a dialogue with the witness, the underlying philosophy being that it is better to have the cooperation of the witness than being confrontational. The style and technique of cross-examination will of (p. 217) course vary with the character and personality of the witness—and of counsel—as well as with the circumstances of the individual case.

6.145  While cross-examination by Swedish counsel and/or under the chairpersonship of a Swedish arbitrator is usually less combative than in the traditional Anglo-American setting, it may occasionally be both combative and heated.

6.146  It goes without saying that if cross-examination is too combative, it will often be counterproductive. First, it may be very difficult to have the witness answer any question without making reservations and/or asking for clarifications. Secondly, the credibility of the witness may indeed increase, at least in the eyes of the arbitrators, which is clearly undesirable. After all it is the tribunal which needs to be convinced.

6.147  During cross-examination counsel will often refer to documents as the starting-point, or as the basis, for his questions. This is accepted practice, certainly if the documents have already been submitted well in advance of the main hearing. Problems may arise if new documents are presented during cross-examination. If a new document is produced as evidence, the document may well be rejected on the ground that it is too late.¹⁰⁴ It is possible, however, that a document in the cross-examiner’s possession which proves that the witness has been lying during direct examination—which typically cannot be foreseen and thus there was no need to submit the document prior to the hearing—would be accepted as proof with respect to the credibility, or rather the lack thereof, of the witness. If a new document were to be produced, not as evidence but for illustration purposes during cross-examination—sometimes referred to as a reliance document—such a document may sometimes be accepted. The problem here, however, is that such a document may, and usually does, come as a surprise for the other party and for the witness. It would also deprive the other party of the possibility to prepare that particular aspect of a cross-examination.

6.148  As mentioned above, the last phase of the examination of witnesses is the re-direct examination. This affords the witness an opportunity to supplement and/or clarify answers given during cross-examination. The questions put during cross-examination thus constitute the framework for the re-direct examination. Leading questions are not allowed during this phase of the examination.

6.149  As mentioned above, the use of written witness statements, or affidavits, is common practice nowadays in international arbitration proceedings.¹⁰⁵ Even though affidavits are typically submitted under oath, arbitrators generally do not seem to attach more evidentiary weight to such affidavits than to written statements simply signed by the witness.

6.150  The benefit of using written statements, be they affidavits or not, is that the arbitration can be conducted in a more speedy and efficient manner. The normal practice is that a witness (p. 218) who has submitted an affidavit appears at the hearing and subjects him/herself to cross-examination by counsel for the other party. The right to cross-examine the other parties’ witnesses follows from the general and fundamental notion of due process in arbitration proceedings.¹⁰⁶ In such case no direct examination of the witness will usually take place, save perhaps for a few introductory questions with a view to giving the witness the opportunity to confirm his statement, or to make minor amendments to it.

6.151  It is not uncommon for counsel for the parties in fact to draft the statements for the witnesses. From a practical point of view, this is efficient for the purpose of focusing the statements only on issues of direct relevance for the dispute. On the other hand, such practice does tend to erode the evidentiary weight of the statement.

6.152  As mentioned above, written witness statements are now generally accepted in international arbitrations. This is also reflected in Article 4 of the IBA Rules. Pursuant to section 5 of Article 4, a witness statement shall contain:

1. (a)  the full name and address of the witness, a statement regarding his or her present and past relationship (if any) with any of the Parties, and a description of his or her background, qualifications, training and experience, if such description may be relevant to the dispute or to the contents of the statement;

2. (b)  a full and detailed description of the facts, and the source of the witness’s information as to those facts, sufficient to serve as that witness’s evidence in the matter dispute. Documents on which the witness relies that have not already been submitted shall be provided;

3. (c)  a statement as to the language in which the Witness Statement was originally prepared and the language in which the witness anticipates giving testimony at the Evidentiary Hearing;

4. (d)  an affirmation of the facts of the Witness Statement; and

5. (e)  the signature of the witness and its date and place.

6.153  Historically, in domestic arbitrations, ie those between Swedish parties before Swedish arbitrators, the use of written witness statements was restricted due to the Swedish legal tradition prohibiting such statements in judicial proceedings. However, this practice is about to shift, inter alia, as a result of recent amendments to the Procedural Code which now accepts written statements¹⁰⁷ and also through the influence from international arbitration practice.

6.154  In most international commercial arbitrations conducted in Sweden, the arbitrators are lawyers. This means that when complicated technical issues are involved they may need the assistance of experts to resolve the dispute. This may be the case in construction disputes and also in arbitrations were the quantification of a claim is complicated. This may be done either by experts appointed by the parties—in which case they are more correctly (p. 219) characterized as witnesses with expert knowledge—or by experts appointed by the tribunal. When the parties appoint their own experts the testimony of these tends to differ, thus leaving the arbitrators with the difficult task of evaluating the expert evidence, sometimes after having appointed their own expert.

6.155  Usually the arbitrators are given the express power by the parties to appoint experts at the expense of the parties. Under Swedish arbitration law the arbitrators may appoint their own expert, unless both parties object thereto, although this is rarely done in practice.¹⁰⁸

6.156  The reason for this exception from the main rule—ie that the parties themselves must supply the evidence, oral as well as documentary—is simply that there may be issues with respect to which the arbitrators lack the necessary expertise.¹⁰⁹ If the arbitrators come to the conclusion that they need the assistance of an expert, they should—and it is common practice—raise this issue with the parties and ask for their comments. Likewise it is common practice for the arbitrators to discuss with the parties the terms of reference for any expert appointed by the tribunal. It is important in this context to emphasize that the arbitrators cannot delegate their duty to determine the dispute to their experts; the arbitrators cannot abdicate from their role as decision-makers. Rather, the arbitrators are expected to take the views of the expert into account, as one of several factors, when deciding the dispute.

6.157  As long as it is clear that the arbitrators are merely taking advice that forms part of the material on which they base their decision, it is generally accepted that they appoint an expert. If the tribunal needs assistance to understand complicated technical matters it is difficult to see any objection to the appointment of an expert by the tribunal, even if one of the parties objects.

6.158  If the arbitrators appoint an expert, his report will be delivered to the parties and in most cases the expert will attend the final hearing and be prepared to answer questions from the parties.

6.159  When experts are appointed by the parties, it is important to keep in mind that the SAA does not set forth any requirements or qualifications with respect to such experts. Consequently, it is not possible to challenge an expert, for example due to alleged lack of impartiality or expertise, and have him removed. The opposing party can, however, point out facts and circumstances which in its view undermine the credibility of the expert and ask the tribunal to take that into account when evaluating the evidentiary weight of the expert’s testimony.

6.160  As far as the admissibility of expert evidence is concerned, the same principles apply as with respect to other forms of evidence.¹¹⁰

6.161  Expert evidence is almost without exception presented by way of expert reports. At the hearing, experts are usually subjected to cross-examination, unless otherwise agreed by the parties, or when the opposing party refrains from cross-examination. Articles 5 and 6 of the IBA Rules set forth some practical and helpful suggestions with respect to party-appointed experts and tribunal-appointed experts, respectively.

(p. 220) 6.162  In addition to the traditional way of examining experts appointed by the parties—ie primarily cross-examination—there are a number of alternative methods of presenting expert evidence, including so-called witness conferencing.

6.163  Such conferencing means that experts appointed by both parties are heard at the same time, usually with questions asked by the chairperson. There are, however, several variations of this approach, all of which should be agreed with the parties.

6.164  This method of presenting evidence is usually in the form of a site inspection and is mainly used in construction disputes and disputes related to turn-key deliveries of plants and equipment belonging thereto. It would seem that this way of presenting evidence is relatively seldom used in practice. The reason is usually the cost and time involved, especially as compared to the added benefit. Very often the same purpose can be fulfilled by using photographs, drawings, maps and models, and sometimes video films. Arbitrators would normally not make an inspection without counsel of both parties being present and would not put questions to personnel at the site directly related to the dispute, unless counsel are given the opportunity to put additional questions.

6.165  As a practical matter, it is submitted that it is good practice not to allow any impromptu witness testimonies, or even informal discussions with site personnel unless this has been planned, or at least agreed, beforehand. Furthermore, it is important to agree on how the site visit and observations made during it are to be recorded.

6.166  As stated above arbitrators may freely evaluate all evidence presented during the proceedings. Furthermore, they may freely evaluate all occurrences during the proceedings, for example, compliance with orders issued by the tribunal. Thus, if a party refuses to answer questions, or to produce a certain document requested by the tribunal, the arbitrators are free to allocate such evidentiary weight to this fact as they deem appropriate in light of all circumstances. Consequently, there are no rules under Swedish arbitration law which regulate the evaluation of evidence, a fact which is in stark contrast to the relatively strict application of the ‘law of evidence’ in common law countries, at least as far as court litigation is concerned. Indeed, the principle of free evaluation of evidence is a hallmark of Swedish judicial and arbitral procedure.

6.167  It follows from the foregoing that it is difficult, if not impossible, to provide guidelines concerning evaluation of evidence in arbitrations. Generally speaking, however, arbitrators tend to give more weight to testimony if it is corroborated by documentary evidence. Also, testimony of a truly independent witness is typically given more evidentiary weight than that of a witness, or representative of either party, with a clear interest in the outcome of the case.

6.168  As mentioned above, one factor that arbitrators may come to take into account when evaluating the evidence in a dispute is a party’s compliance—or rather non-compliance—with orders issued by the tribunal. The most practical situation is probably when a party has failed, sometimes refused, to produce a document ordered by the tribunal to be produced (p. 221) to it and to the other party.¹¹¹ It is often said that the arbitrators may draw negative, adverse, inferences from such a fact. For example, the IBA Rules stipulates in Article 9(5):

6.169  A similar provision is found in Article 30(3) of the SCC Rules, where it is stated:

6.170  While the right to draw negative inferences is generally acknowledged,¹¹² it is submitted that the practical importance of this right is limited. Few arbitrators would in all likelihood be prepared to decide a case solely on the basis of a negative inference. It may, however, be included among other factors to be evaluated and assessed by the arbitrators.

6.171  Evaluation of evidence is generally viewed as a procedural matter which is governed by the lex arbitri. Under Swedish arbitration law an error in the evaluation of evidence is not a ground on which an award can successfully be challenged; it forms part of the arbitrators’ analysis of the merits of the dispute.

6.172  Intertwined with the question of evidentiary weight is the question of the burden of proof. Neither the Procedural Code nor the SAA has any rules as regards the burden of proof. These issues are very intricate and present problems of great philosophical nicety. As regards Swedish court procedure they remain largely unresolved in the sense that no hard and fast rules seem to have developed. With respect to international commercial arbitrations in Sweden the practice seems to be to require each party to prove the facts on which he is relying, at least as the starting point. This approach is recognized in the 1976 UNCITRAL Arbitration Rules, Article 24. Depending on the facts and circumstances of the individual case, however, as well as the arguments relied on by the parties, the burden of proof may shift. This practice would seem to be accepted by most international arbitral tribunals. Under Article 14 of the 1980 Rome Convention, the burden of proof is a matter which is governed by the law applicable to the substance of the contract, ie the lex contractus. This makes sense since the burden of proof, and the way it may shift, will depend to a large extent on the nature of the legal relationship in question. The burden of proof being determined, there remains the question of the standard of proof which is required of a party to fulfil the burden of proof. The processes involved in determining the required level of proof would seem to elude meaningful description, although arbitrators—like judges—presumably consider a spectrum of probabilities in reaching their decisions in this respect.

(p. 222) 6.173  It should also be mentioned that when witness testimony is contradictory, arbitrators are under no obligation to base their conclusions on non-contradictory testimony which seems more probable than other evidence. In such a situation it is reasonable to assume that the arbitrators will base their decision(s) on their own analysis of testimony and facts which have been established otherwise.

6.174  As mentioned above,¹¹³ arbitrators are not entitled to administer oaths. Pursuant to section 26 of the SAA, however, a party wishing a witness or an expert to testify under oath, or a party to be examined under truth affirmation, may submit an application to such effect to the District Court. First, however, the party must obtain the approval of the arbitrators. The same applies also with respect to requests for production of documents assuming that a party wants to have a court order to this effect, since such order is enforceable, also in relation to third parties.

6.175  The arbitrators must give their consent to such an application if they consider that the measure is justified, having regard to the evidence in the case. Cases where the arbitrators may refuse their consent could be if, for example, they believe that sufficient evidence has already been produced on the issue, the issue is irrelevant, the costs involved would be exorbitant, or the application has been made solely for some extraneous reason, such as a desire to obtain publicity or to obstruct or delay the arbitration proceedings.

6.176  If the party against whom measures foreseen in section 26 is a non-Swedish party, two questions arise, viz (i) do Swedish courts have jurisdiction with respect to such issues, and (ii) is an order by a Swedish court enforceable in the country where the requested document is and/or where the witness is domiciled? If the answer to the second question is negative, most parties would probably not be interested in spending the time and money required to obtain an order from a Swedish court. This is probably an important reason why applications based on section 26 of the SAA are seldom made in international arbitrations in Sweden. Most of the documents and witnesses in such cases are located outside Sweden.

6.177  The question of whether Swedish courts have jurisdiction is not directly addressed in the SAA. Section 44(2) of the SAA stipulates that applications in accordance with section 26 of the SAA are to be submitted to the District Court determined by the arbitrators, and that the Stockholm District Court shall hear such applications in the absence of a decision by the arbitrators. It is important to understand that this provision deals with the allocation of jurisdiction as between Swedish courts, ie available fora in Sweden. The provision does not automatically mean that Swedish courts have jurisdiction in relation to a non-Swedish party.¹¹⁴ As discussed above,¹¹⁵ the international jurisdiction of Swedish courts is dependent on whether there is a Swedish interest in the administration of justice with respect to the issue in question.

(p. 223) 6.178  This is still an open issue which has so far not been addressed by the Swedish Supreme Court. For example, in a situation where none of the parties is Swedish and the document requested to be produced is not located in Sweden, it is not self-evident that there is a Swedish interest in the administration of justice to order the production of such a document. The fact that the Stockholm District Court is identified as a default forum in section 44(3) does not mean that there is necessarily a Swedish interest in the administration of justice with respect to such cases. For such an interest to be present, it is usually required that the dispute or the parties have some connection to Sweden.¹¹⁶ In a decision from 1994 (Sveriges Pälsdjursuppfödares Riksförbund och AB Nordiska Skinnauktioner mot Dansk Pelsdyravlerforening NJA 1994 C48), the Supreme Court concluded that the mere fact that an arbitration was pending in Sweden was not a sufficient connection to Sweden for Swedish courts to have jurisdiction in relation to a non-Swedish respondent with respect to an application for interim measures, despite the fact that the respondent was said to have property in Sweden.

6.179  As mentioned above, applications pursuant to section 26 of the SAA require the prior approval of the arbitral tribunal. This approval must be submitted to the court together with the application. Section 26 stipulates that the arbitrators ‘shall approve’ a request for approval if they consider ‘that the measure is justified having regard to the evidence in the case’. What does this mean? First of all, it should be mentioned that in taking this decision, the arbitrators must also comply with their obligation under section 21of the SAA to handle the dispute in an impartial, practical, and speedy manner. Involving courts in the taking of evidence will undoubtedly delay the arbitration proceedings, which may be a significant problem if the parties have agreed on an award period but are unable to agree on an extension thereof. In the travaux préparatoires it is stated that the measure requested must be of significance as evidence,¹¹⁷ which means that it must be capable of affecting the outcome of the case. Insofar as requests for production of documents are concerned, this probably means that they must be as detailed as any other request for documents submitted to the arbitral tribunal.¹¹⁸ In fact the request must be detailed enough for the District Court to issue an order based thereon, should it decide to rule in favour of the applicant. It is only on the basis of such a detailed request that the arbitrators can determine whether the document in question may be of relevance as evidence. Another factor that arbitrators take into account when determining whether the measure is justified, is the extent to which their right freely to evaluate the evidence may be sufficient to address the situation. This may be particularly relevant in relation to the timing aspect.

6.180  When the requested measure is the examination under oath of a witness, the applicant must be able to give a plausible explanation as to why this is deemed necessary. One such explanation could perhaps be the credibility of the witness and the argument that it is better tested under oath.

6.181  It is important to note that, pursuant to section 26(1) of the SAA, the District Court ‘shall grant the application’ where the requested measure may lawfully be taken, on the assumption that the tribunal has given its approval. This means that the District Court cannot (p. 224) review and retry the approval of the arbitral tribunal. This approach does seem to presuppose, however, that the arbitral tribunal has in fact made the detailed analysis described above. If this is not the case, it would seem inevitable that this analysis must be made by the District Court.

6.182  One situation where it is possible that the measure may not be ‘lawfully taken’ is if it would involve the disclosure of trade secrets—as defined in the Swedish Trade Secrets Act¹¹⁹—either by producing certain documents or as a result of testimony. The general rule under the Procedural Code is that a party is under an obligation to disclose trade secrets only if there are special reasons for doing so.

6.183  In Euroflon Tekniska Produkter AB v B.A.,¹²⁰ the Supreme Court endorsed a restrictive standard for ordering disclosure in arbitration, stating that a balancing of interests must be made between the evidentiary value of the documents in question and the potential damage caused to the party which would be ordered to produce documents involving trade secrets. In the case before it, the trade secrets in question were invoices said to contain information about customers, their annual turnover, order volumes, and prices. On balance, the Supreme Court found that the party resisting disclosure stood to suffer a limited amount of damage if the invoices were disclosed, while the invoices were of considerable importance for a question in the arbitration (whether the party resisting disclosure had engaged in behaviour contrary to a non-compete clause), which led the Supreme Court to order the disclosure of the documents.

6.184  This case was referred to in GP&C Systems International AB v Saab Transponder Tech AB,¹²¹ where the Svea Court of Appeal found that no special reasons to disclose trade secrets existed, after GP&C applied to the District Court for assistance with document production in a pending arbitration and the District Court’s decision to order document production was appealed. In reaching its conclusion, the Court of Appeal referred to the standard stated by the Supreme Court in Euroflon Tekniska Produkter AB v B.A.¹²² In applying this standard in GP&C, the Court of Appeal found that the requested documents were of limited evidentiary value, and that their production would cause damage to the party in possession of the documents. The District Court’s decision to order the document production was therefore repealed.

6.185  If an application for the examination of witnesses or experts is granted by the District Court, the arbitrators shall be called to the hearing in court and be afforded the opportunity to put questions. Presumably, however, examination of the witness will be carried out by counsel, subsequent to the administration of the oath by the presiding judge.

6.186  In practice, hearing witnesses and experts under oath before a District Court rarely occurs. With respect to disclosure, however, a court action is the only possible way to have documents disclosed by third parties, if these are not voluntarily cooperating. Moreover, since arbitrators’ orders for production of documents, contrary to court orders of this kind, are not enforceable, a court action may be the last resort to obtain documents in the possession of the other party.

(p. 225) 6.187  The SCC Rules have three provisions which deal with questions of evidence, viz, Article 31, Article 33, and Article 34.

6.188  Article 31 sets forth general provisions on the admissibility and presentation of evidence. Section 2 incorporates the philosophy underlying statements of evidence,¹²³ in that it entitles the arbitrators to ask a party to identify the circumstances intended to be proved by the evidence. Corresponding language is found in Article 33(1) dealing with witnesses.

6.189  Article 34 deals with experts appointed by the tribunal which in practice is a rare occurrence. Section 1 of Article 34 mirrors section 25 of the SAA in that the arbitrators may at their own initiative appoint experts. It is explicitly stated in section 1 of Article 34 that the parties must be consulted prior to such appointment.

6.190  In most, but not all, arbitrations there will usually be an oral hearing, at which witnesses and experts are presented and examined. This kind of hearing is usually called a main, or, final hearing. Sometimes it is referred to as the evidentiary hearing. As will be discussed below, there may also be other kinds of hearings, for example, for the purposes of preparing the case for the main hearing, or separate hearings dealing with specific issues.

6.191  Even though the place of arbitration, or the seat of the arbitration, is Sweden, this does not automatically mean that all hearings or meetings in the case must, or will, take place in Sweden. Subject to any agreement of the parties to the contrary, the arbitral tribunal is usually deemed to have the right to hold meetings and hearings in any other place or country.

6.192  This approach, which corresponds to international practice, is reflected in the SCC Rules. Article 25(1) of the SCC Rules stipulates that the seat of arbitration is decided by the Board, unless the parties have agreed on it. Section 2 of Article 25 then goes on to say:

6.193  Section 3 of Article 25 of the SCC Rules provides that the award shall be deemed to have been made at the seat of arbitration.¹²⁴

(p. 226) 6.194  It follows from the foregoing that parties and arbitrators have a large degree of flexibility when it comes to determining the place of the hearings. In practice, however, at last one meeting or hearing session usually takes place in Sweden, when the place of arbitration is Sweden.

6.195  The distinction discussed above between the place of arbitration and the place of the hearings is confirmed in section 22 of the SAA, the second paragraph of which provides that hearings may be held ‘elsewhere in Sweden or abroad, unless otherwise determined by the parties’. Elsewhere in this context means at a place other than the place of arbitration.¹²⁵

6.196  When the place of arbitration is Sweden, the SAA applies. This is laid down in section 46 of the SAA. As previously discussed,¹²⁶ this means that Swedish arbitration law is the lex arbitri, ie the law governing the arbitration. Since Swedish arbitration law is based on the principle of party autonomy, this means that the form and procedure with respect to hearings will to a large extent depend on the agreement of the parties.

6.197  If there are two or more arbitrators, one of them must be appointed chairperson (section 20 of the SAA).¹²⁷ The parties are entitled to appoint the chairperson, failing which the chairperson shall be the arbitrator appointed by the other arbitrators or by the District Court, in their stead (section 20 of the SAA).¹²⁸ The task of the chairperson is to take charge of the deliberations of the arbitral tribunal and of the organization and conduct of meetings and hearings. Moreover, although not specifically regulated in the SAA, the chairperson is deemed to have special powers with respect to the management and administration of the proceedings. A large part of the chairperson’s role relates to case management. He has the key responsibility for ensuring that the arbitral tribunal’s general duties of fairness and impartiality in the treatment of the parties and avoidance of unnecessary delay or expense are upheld.¹²⁹ According to the travaux préparatoires, the chairperson should, inter alia, be entitled to draw up a schedule for the proceedings and arrange the venue for the hearings, and other practical matters.¹³⁰ If the chairperson is to be given more extensive powers, this should be expressly agreed between the parties and the arbitrators.¹³¹

6.198  The case management duties of the arbitrators thus include several elements of the procedure of the arbitration. These duties also extend to the substantive aspects of the dispute. As mentioned above,¹³² the prayers for relief and the legal grounds relied upon by the parties play an important role in arbitrations in Sweden. It is the duty of the arbitrators to make (p. 227) sure that they properly understand the positions of the parties in these respects. This is important because the prayers for relief and the legal grounds constitute the mandate for the arbitrators. If the arbitrators rule ultra petita or infra petita, the resulting award may be set aside. If there is a need to clarify the positions of the parties, such clarification should take place as early as possible. Clarifications are important not only for the arbitrators but also for the other party. It is entitled to know what case it has to meet. In seeking clarifications from the parties it is essential for the arbitrators to maintain their impartiality, which means that any questions or comments from the arbitrators, either in writing, or orally, must be made in a balanced way.

6.199  Needless to say, the arbitrators cannot help one of the parties to improve its case, nor could they be seen by the other party to do so. The arbitrators should limit themselves to trying to understand the respective cases of the parties. Even if the arbitrators believe that they can balance assistance to one party, by also assisting the other party, this is not to be recommended. The explanation is simply that it is almost impossible to predict the consequences of such assistance. For example, if the assistance to one party causes him to amend his prayers for relief, or the legal grounds, and if these amendments turn out to be decisive for the outcome of the case, there is a significant risk that the resulting award may be set aside.

6.200  In international arbitrations, parties and counsel come from different jurisdictions with different legal traditions and approaches. Active case management is therefore important to avoid misunderstandings and mistakes and to ensure that the parties are treated in an equal manner and that they are given the opportunity to present their respective cases. It is clear from the foregoing that active case management is a difficult balancing act. If the chairperson is too explicit in his questions and/or comments, this may be perceived as lack of impartiality by one of the parties, or both of them. On the other hand, if the chairperson is too general and too vague, there is a risk that the parties do not understand what the chairperson is getting at.

6.201  As previously mentioned,¹³³ it is submitted that the principle of iura novit curia does not, and should not, apply in international commercial arbitrations.¹³⁴ Rather the arbitrators have an obligation to decide the case based on the facts, arguments, and evidence presented by the parties. The arbitrators have no obligation, in the legal meaning of the word, to find the ‘correct’ solution, to make the ‘right’ decision from a substantive law point of view, even though this is naturally the ambition of every arbitrator. In a way, it is helpful to regard the case management duty of the arbitrators as the remedy against, or at least a counterweight to, the lack of the principle of iura novit curia. Active case management will assist the arbitrators in their ambition to find the ‘correct’ solution. The case management duty does not, however, extend to a duty to issue a ‘correct’ award from a substantive law point of view.

6.202  In practice, the chairperson prepares the first draft of the award when the arbitrators have decided the relevant issues and, if applicable, the recitals of the award prior to the hearing, see para 7.57 et seq. The chairperson may appoint an attorney or junior judge to serve as (p. 228) secretary to the tribunal, but only after having consulted the parties.¹³⁵ In international arbitration, it has become increasingly common with verbatim records of hearings created with the assistance of court reporters.¹³⁶ Since this is an additional cost of the arbitration, the chairperson cannot decide to use such services without the parties’ consent. Whether minutes or some other form of record should be kept may, however, be decided by the chairperson in his discretion.

6.203  Unlike, for example, the SCC Rules, where the arbitrators have the express power to determine the language of the arbitration when there is no agreement between the parties, the SAA is silent in this respect. However, should the parties be unable to agree on the language of the arbitration, the arbitrators must decide this issue at the initial stages of the arbitration taking into account, inter alia, the nationalities of the parties and their counsel, the language of the contract, and other documentation, and the language used in any correspondence between the parties.

6.204  In most international arbitrations today the tribunal will try to arrange some form of preliminary meeting between the parties and the tribunal, or at least with the chairperson of the tribunal. Such a preliminary meeting will often be in person, but may also be in the form of a telephone conference or video link meeting. The purpose of these preliminary meetings is to try to agree on a timetable for the arbitration, including deadlines for the submission of briefs and dates for the final hearing. Another purpose is to try to agree on various practical aspects of the conduct and management of the arbitration.¹³⁷

6.205  In 1996 UNCITRAL adopted the Notes on Organizing Arbitral Proceedings (the ‘Notes’).¹³⁸ The Notes provide a checklist of matters which the arbitral tribunal may wish to address when organizing arbitral proceedings. The list, while not exhaustive, covers a broad range of situations that may arise in an arbitration. In many arbitrations, however, only a limited number of the matters mentioned in the list need to be considered. It also depends on the circumstances of the individual case at which stage or stages of the proceedings it would be useful to consider matters—if at all—concerning the organization of the proceedings. Generally, in order not to create opportunities for unnecessary discussions and delay, it is advisable not to raise a matter prematurely, ie before it is clear that a decision is needed.

6.206  The list in the Notes includes the following matters for possible consideration in organizing arbitral proceedings:

1. (i)  Consultation regarding the organization of arbitral proceedings; procedural meetings.

2. (ii)  Language of proceedings.

3. (iii)  Place of arbitration.(p. 229)

4. (iv)  Administrative support for the arbitral tribunal.

5. (v)  Costs of arbitration.

6. (vi)  Possible agreement on confidentiality.

7. (vii)  Means of communication.

8. (viii)  Interim measures.

9. (ix)  Written statements, witness statements, expert reports, and documentary evidence.

10. (x)  Practical details regarding the form and method of submissions.

11. (xi)  Defining points at issue; order of deciding issues; defining relief or remedy sought.

12. (xii)  Amicable settlement.

13. (xiii)  Documentary evidence; scheduling; sequence; production of documents.

14. (xiv)  Witnesses; manner and order of testimony.

15. (xv)  Experts and expert witnesses.

16. (xvii)  Hearings; dates; length of hearings.

6.207  In addition to administrative and practical issues, there are typically four preliminary matters that a tribunal may have to deal with at the initial stage of the arbitration, viz, (i) jurisdiction, (ii) applicable law, (iii) questions of bifurcation, and (iv) interim measures. With the exception of interim measures, there are no provisions in the SAA addressing these issues. The practical handling of them is resolved based on discussions and consultations between the parties and the arbitrators.

6.208  When the respondent in an arbitration challenges the jurisdiction of the tribunal,¹³⁹ it can either deal with the issue as a separate and preliminary matter, or join the jurisdictional issue to the merits of the dispute.

6.209  The latter option is often sensible when the jurisdictional issues—factual, and sometimes legal as well—are intertwined with the merits of the case to such a degree that it may be difficult to rule on jurisdiction without, at the same time, at least indirectly, ruling on the merits of the case. The disadvantage of not ruling on jurisdiction separately is of course that the parties may have spent time and money on the case only to discover in the final award that the tribunal has no jurisdiction.

6.210  If the tribunal decides, or if the parties agree, to hear the jurisdictional issue separately, it is not unusual to have a separate hearing on jurisdiction. Even though there are exceptions, jurisdictional hearings seldom last longer than a couple of days. Sometimes jurisdictional objections are decided without an oral hearing, ie based on documents only.

6.211  Another typical preliminary issue is that of applicable law.¹⁴⁰ When this issue arises, it is usually the law applicable to the merits of the case that the parties want the tribunal to rule on. Needless to say, the law applicable to the merits of the case may often be of decisive importance to the outcome of the dispute.¹⁴¹ In situations where one can assume that the applicable law may be decisive, it also makes sense, from a practical point of view, to resolve the issue as a preliminary matter. Otherwise the parties may have to argue their respective case on the basis of two, or perhaps even more, legal systems. This adds cost and complexity (p. 230) to most arbitrations. When applicable law issues are decided as separate and preliminary issues, this is often done without an oral hearing. It is not unheard of, however, that one of the parties, and sometimes both parties, want to have an oral hearing, perhaps to hear legal experts and sometimes fact witnesses testifying about facts which may be of relevance in the choice of law context.

6.212  Bifurcation of the proceedings—apart from jurisdictional issues—is another preliminary issue which arises from time to time, mostly concerning whether or not issues of liability and quantum should be dealt with separately. If such bifurcation takes place, there will usually be separate hearings, starting with a hearing devoted to the liability issue. Such a separate hearing will usually result in a separate award on liability.¹⁴² Depending on the outcome of the liability issue, a second hearing may follow on quantum. In many international arbitrations today, the quantification of claims involves a significant amount of work. This is often the case in major construction disputes and other disputes where loss of future profits is claimed. In such situations it may make sense both for the parties and for the tribunal to decide issues of liability first. In this way, the parties avoid spending time and money on preparing documentation and calculations on quantum that may turn out to be unnecessary.

6.213  Ultimately, the question of bifurcation is always for the parties to decide; that is to say, if they agree, the tribunal must follow their agreement. If the parties do not agree, the tribunal must rule on the issue.

6.214  Yet another situation where there may be preliminary hearings is with respect to interim measures. As will be discussed below,¹⁴³ under section 25 of the SAA, the tribunal has the authority to order interim measures. Depending on the nature of the interim relief requested, and on the facts and circumstances of the individual case, it may well be that the parties, or one of them, or the tribunal, wishes to hear the parties and/or examine witnesses.

6.215  Sometimes parties find it necessary to ask the arbitrators or a court of law to issue orders intended to protect or preserve assets, to preserve evidence or to take, or refrain from taking measures, with a view to preserving the status quo pending the outcome of the case. Measures covered by such orders are usually referred to as interim measures. Section 25(4) of the SAA explicitly authorizes arbitrators to issue such orders. The relevant provision reads:

6.216  For a party in need of an interim measure the problem, is however, that speed is typically of critical importance.¹⁴⁴ That is why in practice many parties submit their applications for interim measures to national courts, on the assumption that they have jurisdiction. A valid arbitration agreement does not constitute a bar to such court proceedings.¹⁴⁵ In arbitrations in Sweden between two non-Swedish parties, it is usually not meaningful to seek such (p. 231) orders from a Swedish court, since as a rule the assets and/or evidence in question are typically not located in Sweden. The ultimate effectiveness of such an order would thus depend on the extent to which the order is enforceable where the asset/evidence is. On the other hand, if the party against whom the measure is sought is domiciled in Sweden, or has assets in Sweden, it may make sense to seek the assistance of Swedish courts.¹⁴⁶

6.217  The fact that it takes time to establish a tribunal may thus create problems for the party seeking interim measures. With a view to addressing this problem, the SCC Institute has adopted a set of rules for so-called emergency arbitrations¹⁴⁷ which make it possible to issue orders for interim measures before the establishment of an arbitral tribunal.