Contributed By Norburg & Scherp Advokatbyrå
An arbitral tribunal in Sweden is given extensive powers to order interim measures, including the authority to order a party to secure evidence or to undertake certain actions to secure the claim that is to be resolved in the arbitration. It is for the arbitral tribunal to decide when the granting of interim measures is justifiable. Under Section 25 (4) of the Arbitration Act, the arbitral tribunal is allowed to grant the same kinds of interim measures as the UNCITRAL Model Law, including ordering a party to (i) maintain or restore the status quo pending determination of the dispute; (ii) take action that would prevent – or refrain from taking action that is likely to cause – current or imminent harm or prejudice to the arbitral process itself; (iii) provide a means of preserving assets out of which a subsequent award may be satisfied; or (iv) preserve evidence that may be relevant and material to the resolution of the dispute.
As in many other jurisdictions, an order issued by an arbitral tribunal is not enforceable in Sweden. In practice, however, many parties agree to comply with such orders and a party’s failure to comply may be considered by the arbitral tribunal when determining liability for loss caused, or when calculating damages. Arbitral tribunals are not empowered to order interim measures against third parties.
The arbitral tribunal and the courts have parallel jurisdiction to order interim measures, unless the parties agree otherwise. Thus, the parties have the choice of selecting the forum that best suits their particular needs. Swedish courts are authorised to grant a number of different interim measures before or during the arbitral proceedings including, for example, prohibitive measures to restrain a party from carrying out certain actions, positive measures to require a party to take certain action, and measures aimed at ensuring the future enforcement of the final award. The courts have a wide discretion to grant enforceable orders for interim relief. Contrary to arbitral tribunals, a court is also authorised to order ex parte measures as well as impose interim measures on third parties. The parties are not prevented from seeking interim measures from a court by having already applied for, or even been granted, an interim measure by the arbitral tribunal.
The courts and the arbitral tribunals normally require that the requesting party provides reasonable security, eg a bank guarantee or a pledge over a bank account, for any loss that may be suffered by the other party as a result of the interim measure. As regards security for a party’s litigation costs, at the request of a respondent, a court can only order claimants from certain jurisdictions outside the European Union to provide such security. It is less clear whether an arbitral tribunal has such authority to order security for a party’s costs in the arbitration. It may be noted that the SCC revision committee has proposed to introduce a provision to this effect in the new SCC Rules.