Arbitration means settlement of civil disputes amicably by appointing an arbitrator or a person to judge the dispute and pass an award with mutual consent by the parties in dispute. The process saves time and money by not going to the court. To invoke arbitration there must be an arbitration agreement between the parties or at least a clause for arbitration in the main agreement.
Arbitration agreement means an agreement or an arbitration clause in a contract whereby the parties agree to submit present or future civil disputes to arbitration.
In Sweden the arbitration law is governed by "The Swedish Arbitration Act Of 1999 (SFS 1999:116)"
ESSENTIAL INGREDIENTS OF ARBITRATION
- An arbitration agreement or at least an arbitration clause to invoke arbitration
Either party must not oppose to go for arbitration.
The appointment of impartial arbitrator.
Place of arbitration.
The arbitration agreement is applicable to all civil disputes concerning commercial transactions viz. Real estate (Rent, Lease etc.) matters, Contracts, Debt enforcement matters etc. But may not be applicable to a dispute between a business enterprise and a consumer concerns goods, services, or any other products supplied principally for private use. It is not applicable to any criminal matter.
The Process of arbitration begins with the appointment of impartial arbitrator by the disputing parties.
Appointment of Arbitrator
There shall be three arbitrators to be appointed for the dispute in a manner that the parties in dispute shall appoint one arbitrator each and one to be appointed by the arbitrators appoint third arbitrator. Where each party is required to appoint an arbitrator and one party shall notify the opposing party of his choice of arbitrator in a request for arbitration. The opposing party shall within thirty days of receipt of the notice, notify the first party in writing in respect of his choice of arbitrator. A party who, in this manner, has notified the opposing party of his choice of arbitrator may not revoke the appointment without the consent of the other party. If the opposing party fails to appoint an arbitrator within the stipulated time, the District Court shall appoint an arbitrator upon request by the first party. The arbitrators so appointed shall have the following qualifications:
- Any person who possesses full legal capacity in regard to his actions and his property may act as an arbitrator.
- An arbitrator shall be impartial and not
- a person closely associated to him who is a party to the dispute, or otherwise may expect benefit or detriment worth attention, as a result of the outcome of the dispute;
- a person closely associated to him who is the director of a company or any other association which is a party to the dispute,
the arbitrator who has assisted one of the parties in the preparation or conduct of his case in the dispute;
In the aforesaid circumstances if a party so requests, an arbitrator shall be discharged which may diminish confidence in the arbitrator's impartiality.
A person who is asked to accept an appointment as arbitrator shall immediately disclose all circumstances, which might be considered to prevent him from serving as arbitrator and shall inform the parties and the other arbitrators.
CHALLENGING THE APPOINTMENT OF ARBITRATOR
A challenge of an arbitrator on account of disqualification shall be presented within fifteen days commencing on the date on which the party became aware both of the appointment of the arbitrator and of the existence of the circumstance. The arbitrators shall adjudicate the challenge, unless the parties have decided that it shall be determined by another party.
A party who is dissatisfied with a decision denying a motion or dismissing a motion on the grounds that the motion was not timely filed may file an application with the District Court that the arbitrator be removed from his post. The application must be submitted within thirty days commencing on the date on which the party receives the decision. The arbitrators may continue with the arbitral proceedings pending the determination of the District Court.
Where an arbitrator resigns or is discharged, the District Court shall, upon request by a party, appoint a new arbitrator.
Where an arbitrator has delayed the proceedings, the District Court shall upon request by a party, discharge the arbitrator and appoint another arbitrator.
THE ARBITRATION PROCEEDING
The arbitration proceedings starts when a party receives a request for arbitration in writing and include:
- an express and unconditional request for arbitration;
- a statement of the issue which is covered by the arbitration agreement and which is to be resolved by the arbitrators; and
a statement of the party's choice of arbitrator where the party is required to appoint an arbitrator.
The parties shall determine the place of arbitration. Where this is not the case, the arbitrators shall determine the place of arbitration and may hold hearings and other meetings elsewhere in Sweden, or abroad, unless otherwise agreed by the parties.
Within the period of time determined by the arbitrators, the claimant shall state his claims in respect of the issue stated in the request for arbitration, as well as the circumstances invoked by the party in support thereof.
Thereafter, within the period of time determined by the arbitrators, the respondent shall state his position in relation to the claims, and the circumstances invoked by the respondent in support thereof.
The claimant may submit new claims, and the respondent his own claims, provided that the claims fall within the scope of the arbitration agreement and, taking into consideration the time at which they are submitted or other circumstances, the arbitrators consider it appropriate to adjudicate such claims.
The parties shall supply the evidence. However, the arbitrators may appoint experts, unless both parties are opposed thereto.
Where a party wishes a witness or an expert to testify under oath, or a party to be examined under truth affirmation, the party may, after obtaining the consent of the arbitrators, submit an application to such effect to the District Court. The provisions of the Code of Judicial Procedure shall apply with respect to such measure. The arbitrators shall be summoned to hear the testimony of a witness, an expert, or a party, and be afforded the opportunity to ask questions.
An oral hearing shall be held prior to the determination of an issue referred to the arbitrators for resolution.
Where one of the parties, without 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.
The arbitrators may, at the request of a party, decide that, during the proceedings, the opposing party must undertake a certain interim measure to secure the claim which is to be adjudicated by the arbitrators.
The issues which have been referred to the arbitrators shall be decided in an award. Where the parties enter into a settlement agreement, the arbitrators may, at the request of the parties, confirm it in an award.
An award shall be made in writing, signed by the arbitrators. It suffices that the award is signed by a majority of the arbitrators, provided that the reason why all of the arbitrators have not signed the award is noted therein. The parties may decide that the chairman of the arbitral tribunal alone shall sign the award. The award shall state the place of arbitration and the date when the award is made. The award shall be delivered to the parties immediately.
An arbitration award is invalid in the following circumstances viz.:
- if it includes determination of an issue which is not decided by arbitrators, in accordance with Swedish law,;
if the award, is clearly incompatible with the basic principles of the Swedish legal system; or
if the award does not fulfil the requirements with regard to the written form and signatures by the arbitrators
An action must be brought within three months from the date upon which the party received the award or, where correction, supplementation, or interpretation has taken place, within a period of three months from the date upon which the party received the award in its final wording.
An action against an award shall be considered by the Court of Appeal within the jurisdiction where the arbitral proceedings were held. Where the place of arbitration is not stated in the award, the action may be brought before the Svea Court of Appeal.
PROCEEDINGS OF INTERNATIONAL MATTERS
Arbitral proceedings may also be take place in Sweden against a party, which is domiciled in Sweden or subject to the jurisdiction of the Swedish courts with regard to the matter in dispute or has its place of business in Sweden, unless the arbitration agreement provides that the proceedings shall take place abroad.
Where an arbitration agreement has an international connection, the agreement shall be governed by the law agreed upon by the parties.
Where foreign law is applicable to the arbitration agreement which are covered by the agreement, except when:
- in accordance with the applicable law, the agreement is invalid, inoperative, or incapable of being performed; or
- in accordance with Swedish law, the dispute may not be determined by arbitrators.