Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION

     With the judgment T 6238-10, dated February 24, 2012, by the Svea Court of
Appeal, the appellate court in Stockholm upheld an award challenged on the
grounds that the arbitrator had, against one party’s request, conducted the arbitral
proceeding without an evidentiary hearing.1 In addition, extrinsic evidence
submitted had been rejected by the arbitrator by reference to the Parol Evidence
Rule under New York law. The decision by the Svea Court of Appeal confirms
that parties, under Swedish law, may in advance of a dispute bind themselves to
"documents only" arbitration. This article discusses two issues, first, whether there
is a right to an oral hearing and second, the application of the Parol Evidence Rule
in international arbitration.

     The factual and procedural background of the case and the decision by the
Svea Court of Appeal are set forth in the next sections, followed by a discussion
on the right to an oral hearing and a subsequent examination of the application of
the Parol Evidence Rule in international arbitration.

 

II. THE FACTUAL AND PROCEDURAL BACKGROUND OF THE CASE

     By a final award dated February 10, 2003, Viva Trade L.L.C. (“Viva Trade”)
was ordered to pay a certain amount to Rual Trade Limited (“Rual Trade”).
Subsequently, Rual Trade sought to enforce the award against Viva Trade, Roman
Romanov, Vladimir Romanov and Ukio Banko Investicine Groupe (“Ukio
Banko”). In April 2007, Rual Trade entered into a settlement agreement with Viva
Trade, Roman Romanov, Vladimir Romanov and Ukio Banko (together referred
to as the “Defendants” in the settlement agreement).2

     The settlement agreement provided that the defendants were “jointly and
severally liable to pay, and agree to pay, or cause to be paid” to Rual Trade three
million U.S. dollars in four installments.3