How much reasoning must an arbitral tribunal provide?

A preview of an upcoming contribution to the Stockholm Arbitration Yearbook

The purpose of this note is to provide a brief preview of a forthcoming article in the Stockholm Arbitration Yearbook 2026 analysing the recent Svea Court of Appeal judgment in Peab v. Rodamco. What follows is therefore only a condensed overview of certain aspects of the case and its potential implications. Readers interested in the full analysis are referred to the forthcoming yearbook contribution by Jacob Frank.

The case is noteworthy not only for its doctrinal implications but also for its sheer scale. The arbitration between Peab and Rodamco – concerning the construction of the Mall of Scandinavia in Solna – is widely regarded as one of the largest, if not the largest, construction arbitration ever conducted in Sweden. The numbers alone illustrate the magnitude of the dispute: proceedings lasting more than six years, 56 hearing days, submissions exceeding 10,000 pages, disclosure and evidence involving hundreds of thousands of documents, and total arbitration costs reported at approximately SEK 630 million. The final award ordered payment of roughly SEK 1.2 billion.

Against this backdrop, the subsequent challenge proceedings before the Svea Court of Appeal raised two issues of considerable practical interest for arbitration practitioners:

• how much reasoning an arbitral tribunal must provide in order for an award to withstand challenge; and
• how clearly parties must articulate the factual foundations of their claims and defences.
   

Both questions lie at the intersection of efficiency, due process, and the finality of arbitral awards. The Court’s judgment offers important guidance — but also raises broader questions that are likely to be debated in Swedish arbitration circles for years to come.

The underlying dispute arose from a construction contract under which Peab acted as contractor for the development of the Mall of Scandinavia shopping centre. The agreement incorporated the Swedish standard contract ABT 06 with certain amendments.

Peab initiated arbitration in 2017 under the SCC Rules, claiming approximately SEK 2,1 billion (later adjusted to about SEK 1.8 billion). The claims related to several categories, including contract work, bonus payments, additional works, disruptions, and hindrance costs. Rodamco disputed most of the claims and brought counterclaims of its own amounting to roughly SEK 1.1 billion (later adjusted to approximately SEK 800 million), including claims for damages, compensation for defects, and liquidated damages.

The proceedings were exceptionally extensive. Apart from the scale of the submissions and evidence, the tribunal also rendered a separate award addressing several principal issues before issuing the final award in June 2023. In that final award, the tribunal upheld the majority of Peab’s claims and ordered Rodamco to pay approximately SEK 1.2 billion, while granting Rodamco only limited recovery on its counterclaims.

Rodamco subsequently challenged the award before the Svea Court of Appeal on numerous grounds. Two of those grounds are particularly significant from a procedural perspective:

1. An allegation that the tribunal’s reasoning was so inadequate that the award should effectively be treated as an award rendered without reasons, and
2. An allegation that the tribunal had failed to examine dispositive facts invoked by Rodamco.

The first issue concerned the sufficiency of the tribunal’s reasoning.

Swedish arbitration law does not contain a statutory requirement that awards must be reasoned. Instead, such a requirement arises primarily from the parties’ agreement or from applicable arbitration rules. In this case, the SCC Rules applied, which provide that an arbitral award shall state the reasons upon which it is based unless the parties agree otherwise.

The more difficult question, however, concerns the minimum standard that those reasons must satisfy. 

Most modern arbitration statutes and institutional rules – including the UNCITRAL Model Law and the rules of major arbitral institutions – contain a presumption that arbitral awards should state the reasons upon which they are based. At the same time, national judicial practice on matters relating to annulment or setting aside based on insufficient reasoning varies widely both within and between jurisdictions.

The Swedish Supreme Court addressed the issue of reasoning in the well-known case Soyak v. Hochtief. In that judgment, the Court held that an arbitral award may only be set aside on the basis of insufficient reasoning if the reasons are so incomplete that they can be equated to a total absence of reasons. It is, however, unclear under what circumstances reasons can be considered so incomplete as to be able to draw the conclusion that they can be equated to a total lack of reasons.

In the Peab v. Rodamco arbitration, the reasoning provided for a large number of individual claims — particularly claims relating to additional works — was notably concise. In many instances, the tribunal limited itself to statements to the effect that, having reviewed the submitted documentation and evidence, it found the claim to be sufficiently supported or justified to a certain amount. The tribunal generally did not set out a detailed step-by-step legal analysis explaining how specific factual findings led to particular monetary outcomes.

Rodamco argued that such reasoning was insufficient. According to Rodamco, the award inter alia failed to explain how the tribunal had assessed evidence and did not make clear what had actually been found proven in relation to disputed issues.

The Svea Court of Appeal rejected that argument.

In doing so, the Court emphasized that the required level of reasoning must be assessed in light of the nature and scale of the arbitration. In disputes involving extraordinarily large amounts of material, the Court noted, it may be justified to limit the scope of the reasoning and present the tribunal’s assessment in more aggregated terms.

Against this background, and together with a number of additional considerations discussed in the forthcoming article, the Court concluded that the reasoning satisfied the standard established by the Supreme Court in Soyak v. Hochtief. The challenge based on insufficient reasoning was therefore ultimately rejected.

The second issue addressed by the Court concerned a different aspect of arbitral procedure: the requirement that parties clearly identify the dispositive facts on which they rely.

Under Swedish procedural law, a court judgement may not be based on dispositive facts other than those pleaded (Sw. åberopa) by a party. The provision embodies the principle that parties determine the subject-matter of the dispute (Sw. dispositionsprincipen) and applies equally in arbitration. An award based on a dispositive fact not pleaded, or one that fails to examine a dispositive fact that has been pleaded due to oversight or misinterpretation, constitutes a challengeable error.

In the challenge proceedings, Rodamco argued that the tribunal had overlooked a number of such facts in several parts of the dispute. Most of these arguments were rejected. 

The Court’s reasoning in this part of the judgment is instructive in many respects. The Court repeatedly emphasized that dispositive facts must be invoked clearly and unambiguously. In disputes generating tens of thousands of pages of submissions and evidence, counsel cannot rely on volume as a substitute for precision, nor can they adopt a strategy of including every conceivable argument and leaving it to the tribunal to 'sort it out.' Such an approach, as Rodamco discovered, carries significant procedural risk. 

The Peab v. Rodamco judgment touches on two procedural themes that are likely to remain relevant well beyond this particular dispute. Taken together, these aspects raise broader questions about how arbitration balances efficiency, finality and due process in very large disputes. The Peab v. Rodamco case provides an unusually rich illustration of these tensions, and of how Swedish courts approach them in challenge proceedings.

A more detailed discussion of these issues — including the practical lessons the case may hold for arbitrators and counsel involved in complex construction arbitrations — will be developed in the forthcoming article in the Stockholm Arbitration Yearbook 2026.