Originally From Arbitration Law of Sweden: Practice and Procedure

The Arbitration Agreement as a Bar to Judicial Proceedings

3.1 Introduction

An ordinary, mutually binding contract entails positive obligations for the parties, i.e. requires active performance. The vendor has to deliver the goods and the buyer has to pay for them. A contract can also entail negative effects—“duties of omission.”

The arbitration agreement can be said to impose positive obligations on the parties, namely to assist in the settlement of any disputes by arbitrators. A court has no power to order a party to take part in an arbitral proceeding, but it is possible to carry through an arbitration in spite of one party failing to participate in the proceedings. The non-participating party is often penalised due to the fact that the arbitrators will then decide the case on the evidence submitted by the opposing party. This in itself is an incentive for active participation in arbitral proceedings. A court cannot subpoena a party to appoint an arbitrator. The positive legal effects of an arbitration agreement are confined to a District Court being able, at a party’s request, to appoint an arbitrator for an opposing party who has failed to appoint one of his own.

An arbitration clause also has a negative effect, in the sense of constituting a bar to judicial proceedings.1 Section 4 (1) makes the arbitration agreement an optional bar to judicial proceedings. This means that the court is only to dismiss the claimant’s suit if the respondent, with reference to the arbitration agreement,2 pleads a bar to judicial proceedings. Sometimes the respondent mentions an arbitration clause without requesting dismissal or expressly pleading a bar to judicial proceedings.