Includes Observations by Torgny Håstad and Pontus Ewerlöf
ARBITRAL AWARD RENDERED IN SCC CASE 21/2005 IN 2005 AND JUDGMENT BY THE SVEA COURT OF APPEAL IN CASE NO T2265-06
(1) Has the buyer’s notice of termination of a sale of goods contract governed by Swedish law been served in a timely fashion (within “a reasonable period of time”)?
(2) Has the seller, who negotiated with the buyer “without prejudice”, forfeited its right to object to the purported untimely notice of termination?
(3) Could the limitation of liability clause be modified with the application of Section 36 of the Swedish Act on Contracts and thereby entitle the buyer to consequential damages since the clause purportedly was unfair?
(4) Could the Court of Appeal set aside the award on the basis that the objection to the purported untimely notice of termination was raised against the seller’s better judgment?
(1) A notice of termination, served two years after a serious breakdown of the sold machine, was served too late to be effective.
(2) The seller had not forfeited its right to object to the untimely notice of termination by corresponding and negotiating with the buyer after the notice of termination was served, since these actions were subject to the seller’s clear indications that it did not have the intention to waive any rights.
(3) The limitation of liability clause was not unfair within the meaning of Section 36 of the Swedish Act on Contracts and thus that the buyer was not entitled to any consequential damage.
(4) The Court of Appeal dismissed the challenge, without notifying the respondent, after it sua sponte found the challenge manifestly unfounded because it concerned matters of substantive law which could not be reviewed in setting aside proceedings.