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Stockholm Arbitration Report (SAR)

Preview Page SAR 2004 - 2

Observations by Mary O’Connor and John Gatenby & Kate Menin

Subject Matters:
(1) The potential res judicata effect of the SCC Institute’s dismissal of Respondent’s counterclaim, after the counterclaim had been raised as part of an initial reply to the SCC Institute, but before the referral of the case to the Sole Arbitrator.
(2) The proper law of the arbitration agreement, where the parties expressly chose to apply English law to the substantive contract, but did not make an express choice of law in respect of the arbitration agreement, and the seat of the arbitration proceedings was Sweden.
(3) Whether the requirement of “mutual consultations” in the arbitration agreement was a condition precedent to the jurisdiction of the Arbitrator, or a contractual provision to be considered as part of the substantive arbitration proceedings, and whether the condition had been satisfied.

Findings:
(1) The SCC Institute’s dismissal of Respondent’s counterclaim for failure to pay the advance on costs should not operate as a legal barrier, whether by the doctrine of res judicata, issue estoppel or otherwise, to the Respondent’s ability to bring new arbitration proceedings against the Claimant with respect to the original subject matter of the counterclaim, in circumstances where the counterclaim had been raised, but was dismissed before it was referred to the Arbitrator for final determination.
(2) The Arbitrator found that the parties “impliedly chose” English law to govern the arbitration agreement. The Arbitrator accorded no weight to the fact that the parties expressly chose Sweden as the seat of the arbitration, nor did the Arbitrator apply Sections 46 and 48 of the Swedish Arbitration Act 1999, which provide, in such circumstances, that Swedish law should govern the arbitration agreement.