Incorporation and Passivity: Entering into Arbitration Agreements under Swedish Law - Chapter 31 - Between East and West: Essays in Honour of Ulf Franke

Anders Reldén is a Partner of White & Case Advokat AB and acts both as counsel and arbitrator in Swedish and international commercial arbitration and litigation. He frequently lectures on arbitration-related topics. Before joining White & Case he worked for several years in the Swedish court system.

Mattias Nilsson is an Associate of White & Case Advokat AB, specializing in commercial arbitration and litigation. He frequently guest lecturers at the law Faculty, University of Stockholm, as well as other universities. He has published books and articles on arbitration, European law and other legal areas.

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Originally from Between East and West: Essays in Honour of Ulf Franke

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I. INTRODUCTION

Both the New York Convention and the traditional version of UNCITRAL Model Law acknowledge only written arbitration agreements. Under Swedish law, however, there are no formal requirements for the conclusion of an arbitration agreement—an agreement is created when the parties’ intentions converge. It is also not improbable that a party may become bound to an arbitration agreement as a result of that party’s own passivity.

When an arbitration clause identifies Stockholm as the place of arbitration, Swedish law is applicable on the conclusion of the agreement, unless, of course, the parties have agreed otherwise. Parties negotiating and entering into agreements identifying Sweden as the place of arbitration should be conscious of the fact that a binding arbitration agreement may arise at a much earlier stage than at the time when a written contract, duly signed by all parties, is at hand. It may be argued that a binding arbitration agreement may also arise if, for example, one party does not object to the applicability of a standard agreement to which the other party refers after the initial agreement date, and such standard agreement contains an arbitration clause.

Under Swedish law, the answer to the question when a binding agreement is made is uncertain. In order to avoid disputes on the applicability of arbitration clauses, parties and counsel should be aware of the function of the Swedish mechanisms for binding agreements.