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Stockholm Arbitration Report (SAR)

Preview Page SAR 2002 - 2

Subject-matters:
(1) Invalidity of a contract under the Swedish doctrine of assumptions (förutsättningsläran).
(2) Liability for damages following the invalidity of a contract by virtue of the doctrine of assumptions.

Findings:
(1) Where an assumption relating to certain facts has been decisive for party A for entering into an underwriting agreement with party B and where party B must have been aware of the assumption and its importance to party A and where such assumption is created by a promise from party B and where such promise is broken by the same party without a valid excuse then party B must bear the risk for the failure of party A’s assumption and the failure of such assumption may render the contract invalid.
(2) Failure to fulfil a commitment outside the invalidated contract may constitute ground to claim damages (culpa in contrahendo).

Parties:
Claimants: 1. PC, Parent Company (Sweden), 2. The F Company, Underwriter (Republic of Panama)
Respondent: The Respondent, Underwriter (British West Indies)
Subsidiary of Claimant no 1: TC, the Target Company (State of Delaware, USA)
Shareholder of Claimant no 1: SPC, Shareholder of Parent Company

Place of arbitration: Stockholm, Sweden

Language of the proceedings: English