Why Corporations Choose Stockholm Arbitration for International Disputes

Since 1917, the Arbitration Institute of the Stockholm Chamber of Commerce (hereinafter referred to as the “SCC Arbitration Institute,” “Stockholm Arbitration,” or the “Institute”) has provided a neutral, independent, and impartial forum for resolving commercial disputes worldwide.

Stockholm Arbitration comprises a Secretariat, led by a Secretary General, and a Board composed of leading dispute resolution experts. Each year, the Institute administers approximately 200 disputes involving parties from 40 to 50 countries. Proceedings before Stockholm Arbitration culminate in a final, binding arbitral award that is non-appealable and enforceable in more than 160 countries.

The SCC functions as an administrative body for dispute resolution. While it operates under the auspices of the Stockholm Chamber of Commerce, it remains completely autonomous in administering specific disputes. The organizational structure consists of a Board and a Secretariat (hereinafter the “Board”). Board members are appointed for a three-year term and may be re-elected for only one consecutive term, absent exceptional circumstances. The Board itself does not directly adjudicate disputes.

Navigating SCC Proceedings: From the Arbitration Clause to the Final Award

The primary functions of the SCC Arbitration Institute include:

1. Administering domestic and international disputes in accordance with the SCC Arbitration Rules;
2. Providing comprehensive information and resources on arbitration and mediation procedures.

To refer disputes to resolution under the SCC Rules, parties must execute a valid arbitration agreement or embed a dedicated dispute resolution clause within their commercial contract. For a case to be submitted to the SCC, the underlying international trade contract should feature an arbitration clause. For instance, a standard clause may stipulate that any dispute, controversy, or claim arising out of or in connection with the contract, including any question regarding its breach, termination, or invalidity, shall be finally settled by arbitration administered by the SCC Arbitration Institute in accordance with its Arbitration Rules.

Case Preparation and Management in Stockholm Arbitration

Arbitration proceedings before the SCC commence with the submission of a Request for Arbitration. Equivalent to a statement of claim in state courts, this document is filed by the Claimant with the Institute and must contain the following details:

1. The names, corporate details, VAT registration numbers (if applicable), and contact information of all parties;
2. The names and contact information of the parties’ legal counsel;
3. A valid power of attorney;
4. A concise summary of the underlying dispute;
5. A preliminary statement of the relief or damages sought by the Claimant;
6. A copy of the arbitration agreement or clause under which the dispute is to be settled;
7. Observations regarding the preferred number of arbitrators and the seat of arbitration;
8. The name and contact information of the arbitrator appointed by the Claimant (if applicable); and
9. Proof of payment of the mandatory registration fee.

Upon receipt, the SCC transmits the Request for Arbitration to the Respondent, requesting an Answer. The Answer should be concise and outline the Respondent’s initial position on the claims, including, where applicable, the designation of its appointed arbitrator. A failure by the Respondent to submit an Answer does not impede the continuation of the arbitral proceedings. The Respondent’s submissions must include:

1. Any jurisdictional objections regarding the existence, validity, or applicability of the arbitration agreement, though a failure to raise them at this stage does not preclude doing so prior to submitting the Statement of Defense;
2. An admission or denial of the claims set forth in the Request for Arbitration;
3. A preliminary summary of any counterclaims or set-off claims, including an assessment of their monetary value;
4. A specification of which arbitration agreement applies to each claim, if the counterclaims or set-off claims rely on multiple agreements;
5. Comments regarding the number of arbitrators and the seat of arbitration; and
6. The name, address, telephone number, and email address of the arbitrator appointed by the Respondent.

Strategic Arbitration Planning: Jurisdiction, Governing Law, and Language

Absent a prior agreement between the parties, the seat of arbitration is determined by the Board, while the language(s) of the proceedings are established by the arbitral tribunal. When determining the language, the tribunal takes into account all relevant circumstances of the case and affords the parties an opportunity to submit their positions. Concurrently, the SCC Board will dismiss the proceedings, in whole or in part, if:

1. The SCC Arbitration Institute manifestly lacks jurisdiction over the dispute; or
2. The required advance on costs has not been paid.

The arbitral tribunal decides the merits of the dispute based on the law or rules of law chosen by the parties. In the absence of such an agreement, the tribunal applies the law or rules of law it deems most appropriate. Any reference by the parties to the law of a specific state is construed as a direct reference to the substantive law of that state, excluding its conflict-of-laws principles.

Assessment and Optimization of SCC Arbitration Costs

It is essential to note that the costs of arbitration encompass:

1. The fees of the arbitral tribunal;
2. The administrative fee of the Institute; and
3. The expenses incurred by the arbitral tribunal and other disbursements throughout the proceedings.

Prior to rendering the final arbitral award, the tribunal must request that the Board definitively determine the final amount of the arbitration costs.

The arbitral award is final and binding on the parties from the date it is rendered. By agreeing to arbitrate under the SCC Arbitration Rules, the parties undertake to carry out any award without delay. However, if the parties reach a settlement before the final award is rendered, the tribunal may, at the joint request of the parties, record the settlement in the form of an arbitral award on agreed terms.

Legal Support in the SCC Arbitration Institute: Comprehensive Capabilities

1. Representing corporate clients in dispute resolution proceedings before the SCC Arbitration Institute;
2. Drafting tailored arbitration agreements and clauses to ensure effective dispute referral to the SCC;
3. Preparing and submitting comprehensive procedural documentation for Stockholm arbitration; and
4. Counseling and defending client commercial interests across diverse international commercial arbitration forums.