Challenging arbitration awards in Sweden: a longstanding tradition of long shots

by Asade Pourmand, Carl Rother-Schirren and Marlon Steinsvik


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A fundamental principle in Sweden, as in most jurisdictions, is that an arbitral award, unlike a court judgment, is conclusive, in the sense that it cannot be appealed on substantive grounds. This principle is designed to facilitate a swift and efficient resolution of the parties' dispute. By avoiding the possibility of prolonged proceedings spanning multiple court instances, the arbitral award typically marks the conclusion of the parties' disagreement (albeit subject to the potential difficulties with lengthy enforcement proceedings).

However, the finality of an arbitration award is a double-edged sword. While this rule aims to achieve an efficient and expeditious resolution of the parties' dispute, it also leaves a dissatisfied party with very few options. Given that the stakes are often very high, the conclusiveness of an award may prove detrimental to the losing party.

Section 34 of the Swedish Arbitration Act provides the grounds upon which an award can be wholly or partially set aside.

  1. if it is not covered by a valid arbitration agreement between the parties;
  2. if the arbitrators have made the award after the expiration of the time limit set by the parties;
  3. if the arbitrators have exceeded their mandate, in a manner that probably influenced the outcome;
  4. if the arbitration, according to Section 47, should not have taken place in Sweden;
  5. if an arbitrator was appointed in a manner that violates the parties’ agreement or this Act,
  6. if an arbitrator was unauthorized to adjudicate the dispute due to any circumstance set forth in Sections 7 or 8; or
  7. if, without fault of the party, there otherwise occurred an irregularity in the course of the proceedings which probably influenced the outcome of the case.

Similar to most other jurisdictions, an arbitral award can be challenged on formal grounds in Sweden, resulting in the award ultimately being set aside, in whole or in part.

For completeness, beyond setting-aside proceedings, an award may also be subject to annulment proceedings pursuant to section 33 of the Swedish arbitration act.[1] There is a distinction between awards that are invalid and awards that may be set aside. The grounds for an action for the invalidity of an award are mandatory and the invalidity affects the award ipso jure. This submission addresses setting-aside proceedings under section 34 of the Swedish arbitration act.

Procedural irregularity and an excess of mandate

A recently published report revealed that alleged procedural errors and an excess of mandate stand out as the predominant grounds for challenging an award in Sweden. [2] This revelation underscores the significance of procedural matters in the context of arbitration proceedings and emphasises the importance of adherence to procedural protocols to mitigate the risk of award challenges.

With regard to excess of mandate, the mandate of the Tribunal is generally limited by the arbitration agreement, subject to any subsequent agreements or the conduct of the parties.[3] Further to other procedural irregularities, while there is no uniform definition of the type of procedural issues intended, it follows from the preparatory act that preceded the Swedish arbitration act that they are limited to irregularities that are "qualified errors".[4]

The requirement that the irregularity or excess of mandate "probably influenced the outcome of the case" further raises the threshold for the irregularity or excess of mandate to be able to serve as ground for a challenge proceeding.

Beyond these grounds being among the limited grounds available to challenge an arbitral award, there are several other potential explanations for why alleged procedural errors and excess of mandate emerge as the predominant grounds for challenging awards.

Firstly, it is still unclear to what extent local fundamental procedural rules codified in the Swedish Code of Judicial Procedure (Sw. rättegångsbalken)
apply in arbitration,[5] especially where one or several parties are non-Swedish entities. A saliant example is the leave for appeal recently granted by the Swedish Supreme Court in a case concerning whether the Swedish "principle of disposition" (Sw. dispositionsprincipen) (according to which it is the parties that determine the limits of the proceedings and the court's mandate) applies in arbitration proceedings.[6] Thus, an unsatisfied party may attempt to challenge an award and assert that a procedural error has occurred as a result of non-compliance with certain rules in the Swedish Code of Judicial Procedure, or claiming that the Tribunal exceeded its mandate by failing to adhere to such procedural rules.

Secondly, procedural errors and excess of mandate as grounds for challenging an arbitral award are general in nature and intended to encompass a variety of circumstances. In comparison to the remaining grounds for challenging an award (e.g., award rendered after agreed deadline or invalid appointment of arbitrator), asserting that a procedural error has occurred or that the Tribunal as exceeded their mandate may be the challenging party's most strategic option.

Highly limited chances of success

Statistically, the chance of success with challenge procedures are highly limited. Approximately 20 percent of challenges are deemed "obviously unfounded" (Sw. uppenbart ogrundad) by the Court of Appeal (the court of first instance in challenge proceedings in Sweden) and rejected without the opposing party even being heard.[7] Similar to the longstanding tradition of challenging arbitration awards, it appears that the Court of Appeal has a tradition of rejecting the challenges immediately. By compiling different sources, Duataj & Lambertz have been able to reveal that between 8 and 24 percent of challenges have been deemed "obviously unfounded" between 1987 and 2022, with a slight increase during later years.[8]

Duataj & Lambertz further consider that the purpose of arbitration procedures must be considered by the Court of Appeal when determining whether a challenge is "obviously unfounded". It would undermine the parties' interest in resolving their dispute through arbitration (achieving a quick and efficient resolution of the dispute resulting in an enforceable award) if the Court of Appeal where too restrictive with deeming a challenge "obviously unfounded". Duataj & Lambertz advocate for an even larger portion of challenges being considered "obviously unfounded" and treated as such.[9]

Regardless of whether a challenge is deemed "obviously unfounded", the Court of Appeal deciding to try the case by no means implies that a successful challenge is secured. Between the years 1999 and 2009 only approximately 12 percent of challenges were successful and led to the challenged award being set aside, in whole or in part.[10] Between 2004 and 2015, the corresponding portion was only 10 percent.[11]

It is clear that the chances of successfully challenging an award are highly limited. In the aforementioned report, the authors conclude that "[a]wards are set aside or annulled only in exceptional circumstances pertaining to breaches of the most fundamental principles".[12]

From the perspective of the non-challenging party, the ultimate risk (assuming that the challenge is not clearly uncredible) is of course that the challenge is successful and that the arbitral award is set aside, entailing that years of arbitral proceedings are essentially undone. In light of this risk, it is understandable that parties may be prone to settling challenge proceedings. In fact, in Sweden, 40 percent of the challenge cases were settled.[13] The high percentage of settlements shows that a party unsatisfied with the outcome of an arbitration in Sweden may, beyond the slight possibility of successfully challenging an award, seek to challenge an award in order to subsequently achieving a settlement. This is of course associated with risk, and failing to obtain a settlement may ultimately result in additional procedural costs and time.

Concluding observations

There is a notable discrepancy between the relatively high number of challenges initiated against arbitral awards in Sweden and the comparatively low success rate of challenge proceedings. Parties persisting in initiating challenge proceedings despite the inherent uncertainty surrounding the success of challenges is indicative of underlying motivations and considerations.

Time aspects and settlement discussions are plausible reasons why parties challenge awards notwithstanding that very few awards are set aside by the courts.

[1] Section 33 of the Swedish arbitration act provides that "[a]n award is invalid: 1. if it includes determination of an issue which, in accordance with Swedish law, may not be decided by arbitrators; 2. if the award, or the manner in which the award arose, is clearly incompatible with the basic principles of the Swedish legal system; or 3. if the award does not fulfil the requirements with regard to the written form and signature in accordance with Section 31, first paragraph. The invalidity may apply to a certain part of the award".
[2] Challenging Arbitral Awards in the Nordics 2023 Survey, p. 18, available at: (last visited on 28 March 2024).
[3] See e.g. G. Knuts, "Recourse to the Courts Against an Arbitral Award", in A. Magnusson et al. (eds), International Arbitration in Sweden: A Practitioner's Guide (Kluwer Law International 2021), Chapter 10.
[4] Government bill 1998/99:35 p. 148.
[5] See e.g., government bill 1998/99:35 p. 144.
[6] Decision of the Supreme Court dated 26 June 2023 in case no. T 8250-22.
[7] Dautaj & Lambertz, "Uppenbart ogrundat klander av skiljedom", JT 2023/24 p. 188.
[8] Ibid p. 192.
[9] Ibid. pp. 204–206.
[10] N. Elofsson, "Klandrade skiljedomar mellan 1999 och 2009 – Särskilt om skiljemäns uppdragsöverskridanden och handläggningsfel", JT 2010/11 p. 732.
[11] SOU 2015:37 p. 81.
[12] Challenging Arbitral Awards in the Nordics 2023 Survey, p. 20.
[13] Ibid p. 20.

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