The Swedish Arbitration Act (“SAA”) does not specifically address whether or not a multi-level dispute settlement clause is enforceable. There is also no prominent decision of the Swedish Supreme Court on this issue, and the opinions expressed in the main legal commentaries on Swedish arbitration differ on this issue. In SCC Arbitration Case No. 179/2009, in which the award was challenged before the Svea Court of Appeal and thus became public (T10329-10, T 10401-10), the court held that a requirement that the parties negotiate in good faith for a period of 30 days prior to the commencement of arbitration proceedings was valid. The tribunal concluded that the parties had negotiated to settle the dispute amicably during the required period and that, therefore, the condition for initiating arbitration was met. Finally, the judge noted that the objection in the present case concerned the admissibility of the application. The existence, scope and validity of the arbitration agreement had not been disputed. It is not disputed that D`s claim resulted from the agreement or was related to the agreement and fell within the scope of the arbitration agreement. The question was not whether there was an “initial consent” to the presentation of the dispute to an arbitral tribunal and to the decision of the arbitral tribunal. There was no doubt about the parties` commitment to conciliation. There was no indication in Articles 14.2 or 14.3 of the Agreement that the parties` compliance with those provisions should be a matter of jurisdiction. The judge noted that the approach advocated in the above-mentioned international documents is fully in line with Hong Kong`s law policy, which respects the autonomy of the parties in choosing arbitration as a means of settling their disputes with its incident of speed and purpose, as well as privacy. According to Article 3 of the Ordinance, this was, inter alia, to allow for the fair and expeditious settlement of disputes through arbitration without unnecessary effort.
Multi-level dispute settlement mechanisms were not uncommon. It would not be conducive to the speedy settlement of disputes if controversies over procedural conditions such as those in the present case were regarded as questions of jurisdiction that open the way to dual arguments in judicial proceedings. In international jurisdictions, there is uncertainty as to the circumstances in which such clauses constitute pre-litigation jurisdiction to initiate arbitration and thus exclude the jurisdiction of arbitral tribunals until the prescribed pre-arbitral steps are met. By decision of the Federal Supreme Court of 7 July 2014 (4A_124/2014), the Court upheld a clause for the settlement of disputes in several stages. The tribunal noted that the Dispute Resolution Board (DAB) is a mandatory level of arbitration under a Fidic contract, but that in some cases the principle of good faith allows for an exception, so a party cannot object to arbitration due to the absence of an ATM decision. In Directive 4_628/2015, the Supreme Court of Switzerland annulled a partial arbitral award because the conciliation had not been duly terminated under the applicable ICC ADR rules. Article 14 of the Agreement provided that the law of Hong Kong was the applicable law (Article 14.1) and provided in Article 14.2 that in the event of a dispute between the parties, the parties “shall, in good faith, promptly attempt to resolve such an agent through negotiations”. In addition, either party may “cause the dispute to be referred to the directors general of the parties for resolution by written notice to the other party.” However, if, in accordance with Article 14.3, the dispute could not be resolved amicably within 60 working days of the date of a party`s written request for judgment, the “Dispute shall be submitted by either party exclusively and definitively by arbitration in Hong Kong to [HKIAC] in accordance with the [UNCITRAL Rules]”. The judge noted that it was not disputed that the first sentence of Article 14.3 meant that it was a prerequisite for any referral to arbitration that a written request for a hearing should have been made and that the dispute could not be settled amicably within 60 working days.
However, the parties did not agree on what the condition meant. C argued that the condition relates to the submission of a written notice referring the dispute back to the CEOs for resolution. D, on the other hand, argued that the condition was fulfilled by a written request for negotiations in good faith, as required by its letter of 24 December 2018. C disputed that this letter did not constitute such a request, even with regard to D`s interpretation of Article 14. Global Arbitration Review (GAR) is the online point of contact for international arbitration specialists who tell them everything they need to know about all the major developments. In reaching the above conclusion, the judge also dismissed the two cases cited by C. One of them was an English case Emirates Trading Agency LLC -v- Prime Mineral Exports Pte Ltd [2015] 1 WLR 1145 in which a contractual requirement of friendly discussions in good faith before the dispute could be submitted to arbitration was treated as a matter before the courts. The other was a Hong Kong case of HZ Capital International Ltd -v- China Vocational Education Co Ltd [2019] HKCFI 2705, although the judge accepted that a contractual requirement for mutual consultation between the parties was a condition precedent of the arbitration, which the parties concerned had waived. In any event, the judge held that neither of these two cases really constituted the distinction between admissibility and jurisdiction and could not therefore support C`s arguments. The judge considered that those authorities had also invoked the political reasons justifying a difference in legal treatment between legal challenges and challenges to admissibility […].