Originally from:
International Arbitration Court Decisions - 3rd Edition - Looseleaf
International Arbitration Court Decisions - 3rd Edition - Electronic
(COURT OF APPEAL)
JURISDICTIONAL AWARD
RENDERED IN 1998 IN SCC CASES
38/1997 AND 39/1997
AND
JUDGMENT OF THE STOCKHOLM
DISTRICT COURT
RENDERED IN 2001 IN CASE T 1510-99
AND
JUDGMENT OF THE SVEA COURT OF APPEAL
RENDERED IN 2002 IN CASE T 4496-01
THE GOVERNMENT GUARANTEE CASE
Subject-Matters:
(1) Application, under Swedish law, of an arbitration clause laid down in a
business contract, to a third party guarantor.
(2) Applicable law. Whether a choice of “governing law” in a supply
contract is applicable when determining whether a guarantor is bound by
an arbitration clause in the supply contract.
(3) Is state sovereign immunity a bar to arbitration?
Findings:
(1) Where the performance under a supply contract has been guaranteed by a
third party, the third party (the guarantor) is bound by the arbitration
clause in the main agreement when the undertakings of the debtor and
the guarantor are identical or equivalent.
(2) The effect on the guarantor of an arbitration clause in the supply contract
(to which it is not a party) shall be decided on the basis of the choice of
law made by the parties in the supply contract.
(3) Under Swedish law, a state which becomes a party to an arbitration
agreement, has waived any immunity with respect to the arbitration
proceedings.
SWEDEN
1. The A Company, 2. The B Company v. The Former Soviet Republic,
Jurisdictional Award rendered in 1998 in SCC cases 38/1997 and 39/1997 &
Judgment of the Stockholm District Court rendered in 2001 in cases T 1510-99
& Judgment of the Svea Court of Appeal, Stockholm, rendered in 2002 in
case T 4496-01 - The "Government Guarantee" case
SUBJECT-MATTERS:
(1) Application, under Swedish law, of an arbitration clause laid down in a
business contract, to a third party guarantor.
(2) Applicable law. Whether a choice of "governing law" in a supply
contract is applicable when determining whether a guarantor is bound
by an arbitration clause in the supply contract.
(3) Is state sovereign immunity a bar to arbitration?
Observations by Hans Smit
