Arbitration has very old roots in Sweden, and for many years it has been used to resolve domestic commercial disputes. From an international perspective, Sweden has long since attracted a relatively high number of international arbitrations. During the last 10-15 years the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has experienced a steady increase in international arbitrations.

As a reflection of the growing number of complex international arbitrations, the SCC has recently changed the composition of its board and revised its arbitration rules. We shall summarise the most important aspects of these changes in the article, but first, some facts in brief.

An attractive arbitration venue

The Swedish Arbitration Act was modernised in 1999 to reflect the principles of the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration. Established in 1917, the SCC is a separate entity within the Stockholm Chamber of Commerce. About half of the cases which the organisation administers are international. The SCC currently handles disputes between parties from 30-40 different countries every year. The most common types of international arbitrations handled by the SCC are so-called East-West disputes, involving parties from China and Russia – or the former Soviet bloc – versus parties from the US and Europe. The SCC's portfolio includes a growing number of complex investment disputes and disputes with states as parties.

The number of international arbitrations is likely to continue to increase, due to the fact that a considerable number of bilateral investment treaties provide for SCC arbitration, and the Energy Charter Treaty mentions SCC arbitration as one of a limited number of dispute resolution tools.

During 2006 the SCC changed the composition of its board, responsible inter alia for the appointment of arbitrators, so as to include six foreign members (out of a total of 12).

The foreign members are currently Dr Mohamed Aboul-Enein of Egypt; Dr Pierre Karrer of Switzerland (vice chairman); Professor Alexander Komarov of Russia; David Rivkin of the US; the UK's VV Veder QC; and Dr Wang Sheng Chang of China.

New arbitration rules

The SCC has further issued new arbitration rules, effective from 1 January, 2007. The new SCC rules do not substantially deviate from the 1999 SCC rules, as the revision was not initiated in response to any particular dissatisfaction with the previous rules. The revision's main objective was to create truly international arbitration rules, which were easily accessible and comprehensible to international users, and which in all respects would meet the demands of today's international commercial arbitration.

In order to achieve this goal, a draft of the new rules was distributed for public comments from both within Sweden and abroad and a public hearing on the draft rules was held. During this process, many comments and suggestions were received and subsequently reviewed by a committee of arbitration specialists tasked with the mandate of preparing the new rules.

Consolidation provision

One of the most important substantive changes to the rules is the inclusion (in article 11) of a consolidation provision. The 1999 SCC rules contained no such provision. As the number of multi-contract disputes has increased, so has the potential for parallel arbitral proceedings and multi-party, multi-claim disputes arising out of related events.

In response, and as some institutional arbitration rules already contain such provisions, the drafting committee suggested that a provision on consolidation should be included. The drafting committee, however, chose a relatively conservative approach.

First, consolidation is only an option for the SCC board, as in "the board may, at the request of a party, decide to consolidate" and in all circumstances it can only be decided after consultation with both parties and the arbitral tribunal.

Second, the new rules require that the proceedings in question:

- are both pending under the new SCC rules;

- concern the same legal relationship; and

- involve the same parties.

Therefore, the provision cannot be used to increase the number of parties in an ongoing arbitration or to consolidate disputes where different claimants are arbitrating against the same respondent.

Consequently, the new provision will probably play a role mainly where a claim between two parties already engaged in arbitration under the new SCC rules arises out of the same legal relationship but not the same arbitration agreement, thus involving separate but connected agreements.

Interim measures

The new SCC rules conform to the recent amendment of the model law on interim measures. The 1999 SCC rules merely empowered the tribunal to "order a specific performance… for the purpose of securing the claim," whereas article 32(1) of the new SCC rules more broadly allows the tribunal to "grant any interim measures it deems appropriate."

Furthermore, article 32(3) specifically provides that the tribunal has power to grant interim measures in the form of an order or an award. This change aims to facilitate the enforceability of interim measures ordered by an arbitral tribunal. As before, the tribunal may require that the party seeking the interim measure provide appropriate security. The new SCC rules do not allow ex parte orders. The parties remain free to seek interim measures from national courts.

Appointment of arbitrators

The new SCC rules expressly state that the parties are free to agree on an appointment procedure other than the procedure provided for in the rules (subject to compliance with due process). Under the new rules, the request for arbitration shall further include the parties' comments on the number of arbitrators. Sole arbitrators were appointed by the institute under the 1999 SCC rules.

Under the new rules, the parties have 30 days to jointly appoint a sole arbitrator, and only if they fail to do so will the board make the appointment. The purpose of this amendment is to offer the parties freedom to choose the sole arbitrator, but only within a limited period of time, to avoid delay. Consistent with the 1999 SCC rules and prior practice, in disputes between parties of different nationalities, the board will appoint a sole arbitrator or a chairperson with a different nationality than the parties, unless the parties have agreed otherwise or unless otherwise deemed appropriate by the board.

Multi-party proceedings

In disputes with multiple claimants and/or respondents and where the tribunal shall consist of more than one arbitrator, the principal rule, both under the 1999 SCC rules and the new SCC rules, is that the multiple claimants jointly shall appoint an equal number of arbitrators. If either side fails to make such appointments, the new SCC rules provide that the SCC board shall appoint the entire arbitral tribunal to avoid the risk of national courts setting aside awards due to unequal treatment of the parties.

Updated arbitrator guidelines

In order to supplement the new SCC rules, the SCC has updated its arbitrator guidelines. The new SCC guidelines were issued in May 2007 and can be found on the SCC's website (www.sccinstitute.com) together with the new SCC rules. The new SCC guidelines inter alia explain changes in relation to the calculation of arbitrators' fees and expenses, invoicing and value-added tax, and the new duty for the arbitral tribunal to prepare and submit a provisional timetable. The new SCC guidelines also include an updated model award, which the SCC encourages future arbitral tribunals to use.

Robert Lakatos and Helle Lindegaard are partners at Roschier.