Arbitration

Arbitration is a type of dispute resolution that exists alongside the regular court system. For arbitration to be available, the parties must have agreed to it. Most commonly, the provision for disputes to be resolved by arbitration is contained in the contract to which the dispute relates, but it is also possible to agree to arbitration after a dispute has arisen. Many commonly used standard contracts (AB 04, ABT 06, NLM 19, etc.) also state that disputes of a slightly higher value are to be resolved by arbitration.

In arbitration, the dispute is decided either by a single arbitrator or by a panel of three arbitrators. There are several differences from the general court system. Two key differences that are directly encountered are that the parties have the possibility to choose the arbitrators themselves and that the costs of the arbitrators’ work are paid by the parties, generally in advance. Two other factors that deserve to be mentioned are that arbitration proceedings are normally considerably faster than disputes in the ordinary courts and that there are greater opportunities to keep the dispute and its content secret. As a general rule, the principle of public access to official records also applies in commercial disputes.

Arbitration proceedings can in turn be divided into two main groups, institutional proceedings and so-called “ad hoc” proceedings. The first group is characterised by the fact that an institution, in Sweden usually the Stockholm Chamber of Commerce, has developed a set of rules and provides a registry that makes the procedure more uniform and in some respects more similar to a court process. Ad hoc procedures can be governed more freely by the arbitral tribunal, even if there is a law on arbitration in the background that the tribunal must comply with.

The process in an arbitration is broadly similar to that in a general court, with an initial exchange of pleadings, a planning session, a final statement of evidence and a hearing. However, the arbitral tribunal does not have the same incentive as a general court to also work towards finding a settlement between the parties. It is therefore somewhat less common for cases to end with a settlement after arbitration has been invoked.

NORMA has extensive experience of acting as counsel in various types of arbitration proceedings. Our lawyers also regularly advise on the choice of dispute resolution method when drafting commercial agreements, an issue that parties rarely think about themselves.

The choice of dispute resolution method is particularly important in international contractual relations. A judgement in an arbitration proceeding can normally be enforced almost anywhere in the world, which is not the case for judgements from, for example, a Swedish district court.