Swedish Arbitration Portal: Supreme Court on violation of Due Process
In a decision recently published on the Swedish Arbitration Portal, the Supreme Court affirmed a decision of the Svea Court of Appeal, partially setting aside an arbitral award and finding that the tribunal’s deviation from a position stated in a procedural order constituted a procedural error.
In its analysis, the Supreme Court placed special focus on the prerequisite that the irregularity had probably influenced the outcome of the case. The Court found that the error was substantial, since the arbitral tribunal had failed to give the challenging party a reasonable opportunity to present its case regarding the specific issue. Had the tribunal announced in advance that it would re-examine its position on interpretation of the royalty clause in the parties’ agreement, the challenging party would have further argued this issue. The Court found that due process had been violated and that it could be presumed that such an irregularity influenced the case's outcome.
In its ruling, the Supreme Court highlighted that Section 34(7) of the Swedish Arbitration Act should be applied restrictively. This judgment is a rare example of setting aside an arbitral award in Sweden based on procedural irregularities.
The Swedish Arbitration Portal is facilitated by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC). The project’s mission is to increase transparency in arbitration by making Swedish case law more accessible to the international community.