Alternatives to litigation
i Overview of alternatives to litigation
Arbitration is a frequently used alternative to litigation in Sweden. Major commercial disputes are generally resolved through arbitration rather than in court. Other forms of alternative dispute resolution, such as mediation or expert opinions, are not widely used.
Arbitration proceedings domiciled in Sweden are regulated by the Swedish Arbitration Act of 1999. As discussed in Section II, a revised Arbitration Act entered into force on 1 March 2019. The Act is based on party autonomy and contains very few mandatory rules. The parties are thus largely free to agree on the conduct of the arbitration proceedings. Although the law does not follow UNCITRAL Model Law in its form, it is very similar in content.
SCC is one of the world’s largest arbitration institutes. In 2020, SCC registered a total of 213 cases, an increase of approximately 22 percent compared with 2019. About 50 percent of these cases were international disputes. The total amount of the dispute in the cases initiated in 2020 was EUR 2 billion. Most of these proceedings were governed by the SCC’s arbitration rules.14
Since 2010, SCC’s arbitration rules contain rules on emergency arbitrators. These rules allow the parties to obtain a temporary interim relief from an arbitrator before an arbitral tribunal has been constituted. The SCC appoints an arbitrator within 24 hours of an application and a decision must as a rule be announced within five days.
In 2021, SCC lunched SCC Express, which is a consent-based procedure that gives the parties to a dispute a legal assessment of the dispute in three weeks, for a fixed fee of € 29,000. The results of the assessment are non-binding unless the parties agree that they shall be binding. Swedish arbitration awards cannot be appealed on the merits. An arbitration award can be declared invalid if it includes a decision on an issue which according to Swedish law may not be decided by arbitrators or if the award, or the manner in which it was announced, is clearly contrary to Swedish public order. Furthermore, a judgment can be appealed and revoked if e.g. the judgment is not covered by a valid arbitration agreement or if the board has exceeded its assignment in a way that has probably affected the outcome of the case.
Claims for annulment and challenge of arbitration must be brought before the Svea Court of Appeal. Claims for annulment may be brought without time limit. A claim for revocation of an arbitration award must be made within two months from the date on which the party received the arbitration award, unless the arbitration award has been announced in a proceeding initiated before 1 March 2019, in which case the previous three-month period applies.
An arbitration award issued in Sweden may be enforced by the Swedish Enforcement Agency as a court judgment. Sweden is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitration Judgments and foreign arbitration awards are thus enforceable in Sweden. The grounds for refusal of enforcement set out in Article 5 of the New York Convention have been incorporated into the Arbitration Act. Before applying for enforcement with the Swedish Enforcement Agency, a party must apply for a declaration of enforceability with the Svea Court of Appeal.
Mediation can be agreed between the parties after a dispute has arisen. SCC has its own mediation rules, revised in 2014, which the parties can choose to apply. In business disputes in a general court, the court may decide to appoint a mediator if the parties agree. The courts sometimes also hold more informal conciliation negotiations. In such cases, the judge who conducted the conciliation hearing will not act as judge unless the dispute is resolved.
In an attempt to facilitate mediation as a dispute resolution method, the Swedish Code of Judicial Procedure was revised in 2011 and a new constitution was introduced. The new charter, which implements the Mediation Directive,15 stipulates that settlement agreements entered into after mediation may be executed directly by the Swedish Enforcement Agency. But despite these efforts, mediation is still not widely used to resolve commercial disputes in Sweden.
iv Other forms of alternative dispute resolution
Expert determination is sometimes used to resolve certain disputes under construction contracts or share purchase agreements. This procedure is generally accelerated and results in a decision that is normally binding on the parties as new contractual content.