Swedish Arbitration Portal: Court of Appeal rejects claim of excess of mandate
In a decision recently posted on the Swedish Arbitration Portal, the Svea Court of Appeal rejected a challenge based on excess of mandate, where the tribunal had reviewed legal relationships beyond the scope of the arbitration agreement.
The losing party in the arbitration sought to set aside the award, arguing that the tribunal had exceeded its mandate by basing its decision on a review of related transactions governed by other agreements involving other parties. The party also argued that the arbitral award was invalid because the tribunal decided a question not eligible for arbitration under Swedish law, namely whether certain transactions constituted unlawful distributions under the Swedish Companies Act.
The Court rejected the motion, explaining that an arbitral tribunal has jurisdiction to review legal relationships beyond the scope of the arbitration agreement, provided that those relationships are relevant as evidence for the review of the legal relationship governed by the arbitration agreement. On the invalidity argument, the Court noted that the issue was eligible for arbitration because the Companies Act was incorporated into the parties’ agreement.
The Swedish Arbitration Portal is facilitated by the Arbitration Institute of the Stockholm Chamber of Commerce (the SCC). The project’s mission is to increase transparency in arbitration by making Swedish case law more accessible to the international community.