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Stockholm Arbitration Report (SAR)

Preview Page SAR 2002 - 2

Subject-matters:
(1) Applicable choice-of-law rules to determine the governing law in a sale of goods contract.
(2) Applicable law to the arbitration agreement.

Findings:
(1) A tribunal sitting in Sweden is not obliged to apply Swedish conflictof- law rules, but it is recommended to do so where the parties have fixed the seat in Sweden. In the present case the parties had not and the tribunal decided to apply the principle of closest connection, inspired by the Rome Convention which had not entered into force in Sweden when the contracts were made. The parties’ choice of the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce was not evidence that the parties intended Swedish substantive law to govern the dispute. The seller’s country offered the closest connection. The governing law was therefore Russian law, leading to the application of the CISG.
(2) The arbitral tribunal applied lex fori when deciding on the scope of the tribunal’s jurisdiction since it was the “most correct and suitable law” to govern the arbitration agreement.

Parties:
Claimant: Alpha Corporation (Russian Federation)
Respondent: Beta Trading Co. (United Kingdom)

Place of arbitration: Stockholm, Sweden

Language of the proceedings: English