Originially from: World Arbitration and Mediation Review (WAMR)

ARBITRATION INSTITUTE OF THE STOCKHOLM
CHAMBER OF COMMERCE
By Ulf Franke, Executive Vice President of the Stockholm Chamber of Commerce,
Secretary General of the Arbitration Institute
Sweden is very much an arbitration country. Not only is arbitration the dispute
resolution mechanism used in almost all business disputes of any size, it has been
that way for a very long time. Statutory provisions on arbitration have been traced
back to the very first written sources of Swedish law—the 13th century Visby
Provincial Code. During the increased commercial activities in the 17th century,
arbitration became a common means of settling disputes.
The Code of Sweden of 1934, which is still formally in force, regulated the
execution of arbitral awards. The first arbitration act became law in 1887 and the
present Act was adopted in 1929. This longstanding tradition has led to a positive
attitude toward arbitration not only on the part of the business community, but
also on the part of official Sweden—the government, the judiciary, and other
authorities.
The autonomy of the arbitral process is fully recognized in Sweden. Courts do
not exercise hindering control over arbitration proceedings and the grounds for
challenging arbitral awards are narrowly restricted. On all issues of substance, the
arbitrators are supreme.
This recognition of arbitration as a crucial part of the dispute resolution system
is also an important reason Sweden has adhered to the two major enforcement
conventions—the 1927 Geneva Convention and the 1958 New York
Convention—without any reservations. In fact, Sweden is one of the few
countries whose arbitration system really has been put to the test.
When Sweden began to appear with increasing frequency in the 1960s in
business contracts between U.S. corporations and Soviet foreign trade
organisations as the place at which any arbitration would be conducted, Swedish
arbitration was not that well known internationally. The American Arbitration
Association (AAA), together with the USSR Chamber of Commerce and Industry,
therefore decided to make an in-depth study of Swedish arbitration law and
practice.
This joint study, which was carried out between 1973-1976 with the assistance
of experts from the Stockholm Chamber of Commerce, not only established that
Sweden had the basic characteristics desirable in a country chosen as the locale
for conducting international commercial arbitration proceedings, but also resulted
in new arrangements for the arbitration of contract disputes that may arise
between American corporations and Soviet foreign trade organisations.
The main feature was a model arbitration clause, known as the Optional
Arbitration Clause for Use in Contracts in USA-USSR Trade 1977, which
provided for arbitration to take place in Stockholm, with the assistance of the
Stockholm Chamber of Commerce. Although East-West arbitration cases still