Answer ... Unless the parties have agreed otherwise, the default rule pursuant to the Arbitration Act is that the arbitral tribunal shall be composed of three arbitrators, with the parties appointing one arbitrator each and the arbitrators appointed by the parties appointing the chairperson. The parties have considerable freedom to agree on other procedures for appointing the tribunal, within the boundaries of due process and public policy.

The parties are also free to agree on a procedure for the appointment of the arbitral tribunal pursuant to the Stockholm Chamber of Commerce (SCC) Rules. If the parties have not agreed on the procedure or if the tribunal has not been appointed within the agreed timeframe, the SCC Rules provide as follows:

• Where the tribunal is to consist of a sole arbitrator, the parties shall be given 10 days to jointly appoint the arbitrator. If the parties fail to appoint the arbitrator within this timeframe, the SCC board shall make the appointment.
• Where the tribunal is to consist of more than one arbitrator, each party shall appoint an equal number of arbitrators and the SCC board shall appoint the chairperson.

Answer ... There are no requirements as to the number of arbitrators.

Apart from the fundamental requirements of impartiality (see below), the only formal qualification that applies according to the Arbitration Act is that only people with full legal capacity in regard to their person and property may serve as arbitrators. The tribunal need not include any Swedish citizens.

The SCC Rules provide that when the SCC board appoints arbitrators, it will consider:

• the nature and circumstances of the dispute;
• the applicable law;
• the seat and language of the arbitration; and
• the nationality of the parties.

If the parties are of different nationalities, the sole arbitrator or the chairperson shall be of a different nationality from the parties, unless the parties have agreed otherwise or the SCC board otherwise deems it appropriate.

Answer ... An award cannot be challenged on the merits. Thus, high standards of objectivity and impartiality must be required of the arbitrators. The Arbitration Act builds on the view that the party-designated arbitrators shall be impartial, as well as the chairperson. Pursuant to the Arbitration Act, an arbitrator shall be discharged at the request of a party if there is any circumstance which may diminish confidence in the arbitrator’s impartiality. Such a circumstance shall be deemed to exist where:

• the arbitrator or a person closely associated with him or her is a party to the dispute, or otherwise may expect benefit or detriment worth attention as a result of the outcome of the dispute;
• the arbitrator or a person closely associated with him or her is the director of a company or any other association which is a party to the dispute, or otherwise represents a party or any other person which may expect benefit or detriment worth attention as a result of the outcome of the dispute;
• the arbitrator has taken a position in the dispute, as an expert or otherwise, or has assisted a party in the preparation or conduct of its case in the dispute; or
• the arbitrator has received or demanded compensation from one party only.

The purpose of the rules of challenge is to guarantee the arbitrators’ impartiality so far as possible.

The arbitrators must immediately disclose circumstances which may constitute grounds for challenge. A challenge of an arbitrator on account of a circumstance set forth above shall be presented within 15 days of the date on which the party became aware both of the appointment of the arbitrator and of the existence of the circumstance.

Pursuant to Section 10 of the Arbitration Act, the challenge shall be adjudicated by the arbitrators, unless the parties have decided that it shall be determined by another party. If the challenge is successful, this decision is not subject to appeal. If the challenge is disallowed, a party may file an application with the district court for the removal of an arbitrator from his or her post. The application must be submitted within 30 days of the date on which the party receives the decision. The arbitrators may continue with the arbitral proceedings pending the determination of the district court.

Pursuant to the SCC Rules, a party may challenge an arbitrator if circumstances arise that give rise to justifiable doubts as to his or her impartiality or independence, or if the arbitrator does not possess the qualifications agreed by the parties. A party wishing to challenge an arbitrator shall submit a written statement to the secretariat of the SCC stating the reasons for the challenge within 15 days of learning of the circumstances giving rise to the challenge. Unless the other party agrees to the challenge, the SCC board will take the final decision on the challenge.

The parties further have the right to have an arbitrator removed for delaying the proceedings. Where an arbitrator has delayed the proceedings, the district court shall, upon request by a party, discharge the arbitrator and appoint another arbitrator. The parties may decide that such a request shall instead be conclusively determined by an arbitration institution.

Answer ... According to Section 16 of the Arbitration Act, if an arbitrator resigns or is discharged, the district court shall appoint a new arbitrator, upon the request of a party. Where the arbitrator cannot fulfil his or her duties due to circumstances which arise after his or her appointment, the party which originally was required to make the appointment shall instead appoint a new arbitrator.

Pursuant to the SCC Rules, the SCC board will appoint a new arbitrator; but if the removed arbitrator was appointed by a party, that party shall appoint the new arbitrator, unless the board otherwise deems it appropriate.

Answer ... Pursuant to the Arbitration Act, an arbitrator shall be impartial (see question 26) and the arbitrators shall handle the dispute in an impartial, practical and speedy manner. In doing so, they must act in accordance with the decisions of the parties insofar as there is no impediment to do so.

Answer ... (a) Procedure, including evidence?

Unless the parties have agreed otherwise, an arbitrator has the power, among other things, to decide on the procedure and timetable of the arbitration. Pursuant to the Arbitration Act, the parties will supply the evidence. However, the arbitrators may appoint experts unless both parties are opposed. The Arbitration Act contains no provisions on the admissibility of evidence. Thus, the parties are free to introduce such evidence as they consider appropriate.

(b) Interim relief?

An arbitral tribunal may, unless otherwise agreed by the parties, decide upon the request of one party that the other party undertake interim measures to secure the disputed claim during the proceedings. An arbitral tribunal may grant interim measures to:

• maintain or restore the status quo pending determination of the dispute;
• take action that would prevent, or refrain from taking action that is likely to cause, imminent harm or prejudice to the arbitral process itself;
• provide a means of preserving assets from which a subsequent award may be satisfied; or
• preserve evidence that may be relevant and material to the resolution of the dispute.

However, orders issued by the arbitral tribunal granting interim measures are not enforceable through enforcement proceedings in Sweden. Further, the arbitration agreement does not prevent the parties – before or during arbitration – from seeking interim measures in court.

(c) Parties which do not comply with its orders?

If a party without legal cause fails to appear at the hearing or otherwise to comply with an order of the arbitrators, this does not prevent the continuation of the proceedings and a resolution of the dispute on the basis of the existing material. This also applies if the respondent’s failure to take part in the proceedings is not caused by an effort to obstruct them. The arbitrators have no power to make a summary examination and base a default award on a presumption that the claimant’s representation of the facts is correct. Nor do they have the power to dismiss a dispute because one party has failed to plead its case. However, the arbitrators are at liberty to decide on the evidentiary value to be attributed the party’s passivity. The dispute will be decided based on the entirety of the evidence presented and after an examination on the merits.

(d) Issuing partial final awards?

An arbitral tribunal may decide part of the dispute or a certain issue that is relevant for final resolution of the dispute in a separate award (sometimes referred to as a partial award), unless both parties object. Separate awards have the same legal effect as final awards, also as regards enforcement. Issues which have been referred to the arbitrators shall be finally decided by an award. Other determinations are designated as decisions. Unless authorised by the parties, the arbitrators may not issue awards for issues concerning interim measures.

(e) The remedies it can grant in a final award?

The only limits on the powers of arbitrators to render appropriate remedies are that the remedy have been requested by one of the parties and that it not contravene public policy in Sweden (see question 38).

(f) Interest?

If requested by a party, interest may be awarded both for principal claims and for costs. The rate depends on the applicable substantial law.

Answer ... The respondent often takes a great risk by not participating in the arbitral proceedings, as the arbitrators may deliver an enforceable award despite this lack of participation. A default award cannot be appealed on the merits even in cases where the dispute may have an incorrect outcome merely because the respondent failed to defend itself.

Answer ... No. An arbitrator may be held liable in damages towards the parties where he or she has acted negligently. This follows from the general rule of liability in Swedish contract law.