Peaceful Settlement of Disputes Is a Larger European Interest - conversation with Robin Oldenstam

Arbitration has a long and quite rich history in international dispute settlements. What advantages does this type of dispute resolution offer in your experience and what are the expectations parties usually have?

Arbitration offers many advantages for the settlement of disputes under international commercial contracts. First, it offers a neutral venue with decisionmakers of the parties’ own choosing. Parties may, thus, avoid the local courts of either party’s country, which may be less attractive for a number of reasons. Instead, they may choose a neutral seat of arbitration and establish a tribunal made up of persons whom they trust. Second, parties may have a much quicker resolution of their dispute. Traditional court litigation may take many years, especially following appeals through one or more higher instances. Arbitrations are typically resolved within a year or two with no right of appeal. Third, with the benefit of the New York Convention, parties may enforce the resulting award in more or less any country in the world. A judgment by a local court is typically only enforceable in the country where it was made or in a limited region, such as within the EU under the Brussels Regulation. In addition to the above, there are several other advantages offered by international arbitration, such as choice of language and a commonly recognized procedure. These are the reasons why arbitration remains the primary mechanism for resolving international commercial disputes.

The operation of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) dates back to 1917. During its more than hundred years old history, what types of commercial and investment cases have been in the forefront of its dispute settlement activity? Why is it unique and what advantages has it offered to disputing parties compared to other arbitration venues?

The SCC established itself in the late 1970’s as

primarily catering for East-West disputes,

i.e. disputes between entities from the East like CIS countries or China, and the west, such as from the US or Western Europe. That is the competitive edge of the SCC. Today, it handles a broader spectrum of international disputes, but still maintains a considerable East-West caseload. Typically, the SCC will have around 200 new cases referred to it per year out which about half are international and half are Swedish domestic disputes. Sweden and the SCC is also the second most popular venue in the world for international investment arbitrations after ICSID.

In many cases before the SCC, a former USSR country or a company from these countries have been involved. That also shows the trust they put in SCC which might be due to the longstanding neutrality of Sweden. In this way, the SCC could serve as an arbitrator between West and East. How could the current war endanger that position?

The SCC’s primary task is to serve as a neutral venue for resolving disputes. That task is particularly relevant in times of armed conflict. The SCC, as an institution, has and will always remain strictly neutral and will cater for parties from anywhere in the world. To this end, the SCC – alongside other leading arbitral institutions in Europe – has, amongst other, lobbied the EU Commission to adopt an express exception to cater for arbitration in the latest version of the EU sanctions regime.

It is of critical importance that sanctions do not prevent parties from using international arbitration to solve their differences.

Do you see a shift in the case-load due to the war?

Already well before the war, we had experienced a certain decline in the cases from Russia. The war has not changed that. On the other hand, however, we have seen an increase of cases from, amongst other, the Baltic States. Overall and notwithstanding the war in Ukraine, so far the SCC has seen no drop in its international caseload and it will hopefully remain the first choice for east-west disputes for many years to come.

On the other hand, I am also wondering how the SCC might play a role in settling some of the disputes that arose out of the war.

The war will likely affect some commercial contracts with clauses referring to the SCC for resolving disputes. There may also be certain investment arbitrations arising out of the war. In all of these instances, the SCC may play a role in offering a means for peaceful resolution of those disputes.

It is of utmost importance and of larger European interest that avenues, such as arbitration at the SCC, remain open for parties to settle their differences in a peaceful manner.

What we have been seeing and experiencing in the past decades is the rise of Asian economies and with this, the arbitration venues they offer. One example is the establishment of the Singapore International Commercial Court in 2015. How in your view could these developments endanger the position of the European arbitration forums including the SCC?

In the last decade, global economic growth has been very much centered on Asia. Unsurprisingly, that has led to local arbitration institutions, such as SIAC, building up an impressive and increasing caseload. That includes some cases from Russia that have found their way to Asian forums rather than European ones. However, at the same time, European institutions – including the SCC – are still getting their fair share of international arbitrations and continue to do well.

to the benefit of the users of international arbitration.

What other factors can potentially drive out cases from Europe besides the war?

The unfortunate attitude of the Court of Justice of the European Union towards investment arbitration demonstrated in the Achmea and Komstroy cases, essentially stating that intra-EU investment arbitration is incompatible with EU law. This attitude will likely prompt intra-EU and energy investors to choose arbitration fora outside the EU, such as in the United Kingdom or Switzerland. It also puts investors from within the EU at a competitive disadvantage compared to investors from outside the EU. In light of this, I think

it would be wise to establish an alternative to arbitration for handling investment cases within the European Union.

As the “market of arbitration forums” has become more crowded, how could the European forums, including the SCC remain competitive in your view? What potential improvements do you see desirable?

I believe that the SCC is very well placed in the current market environment. It provides a unique track-record of over 100 years of stability and neutrality combined with a focus on efficiency, simplicity and modernity. With regard to the latter, the SCC provides light touch administration with amongst the shortest – if not the shortest – average time for resolving arbitrations. Under the ordinary SCC Rules, the majority of arbitrations are, thus, finished in less than one year.

The SCC was also the very first of the leading institutions to introduce a wholly digital platform for case management.

It recently introduced the SCC Express as a potential first step and further tool for parties to resolve their disputes in a time and cost efficient manner. The SCC will continue to strive for efficiency and lead the way with innovations that will benefit its users. With this in mind, I have no doubt that the SCC will continue to be a leading arbitral institution for another 100 years.