Judicial Review Of Arbitrators' Fees: Case No. Ö 4227-06 Of The Swedish Supreme Court - ARIA Vol. 18 No. 4 2007
Hans Smit - Stanley H. Fuld Professor of Law, Columbia University. The views expressed here are not necessarily those of the Review. The author gratefully acknowledges the assistance of Elizabeth Cooper and Neel Maitra, Class of 2009, Columbia Law School, in the preparation of this Note.
Originally from American Review of International Arbitration - ARIA
I. THE SWEDISH LAW
The Swedish Supreme Court has just ruled that, under Swedish law, awards of arbitrators’ fees are judicially reviewable, regardless of whether they are assessed by the arbitrator or the institution administering the arbitration. Since the New York Convention does not permit non-recognition of an award on the ground that the arbitral fees are improper, the Swedish law appears to be applicable only to awards rendered in Sweden under the regime of the Swedish Arbitration Law.
Arbitrators and arbitral institutions may not welcome this ruling. In the case cited, the Swedish Supreme Court ordered the arbitrators, leading figures in the field of international arbitration who opposed the review, to pay the litigation costs of the parties who sought it. If, as I have argued elsewhere, judicial review of arbitral awards, statutorily provided for, may not be contractually modified, arbitrators in Swedish arbitrations cannot escape such judicial review and the consequent assessment of litigation costs if they oppose the review. The only way to escape assessment of such costs in cases in which the Swedish court judges the fees to be improper would appear to be that of the arbitrators’ not contesting the judicial review sought. But that would be likely to enhance the chance that the Swedish Court will find the fees to be inappropriate. In any event, the practical effect of the Swedish Supreme Court’s decision is likely to be that arbitrators and arbitral institutions will provide properly reasoned awards of arbitrators’ fees. This would be a desirable consequence of the Swedish Supreme Court’s decision. In my experience, most awards of arbitral fees are inadequately reasoned.