1 · Introduction

1.In contrast to its Scandinavian neighbours Denmark and Norway, Sweden is not recognized as a Model Law country. Nevertheless, the main principles underlying the Model Law are also reflected in the Swedish Arbitration Act (the “Arbitration Act”) which came into effect in 1999. As a consequence thereof, the doctrine of KompetenzKompetenz has been enshrined in the Arbitration Act. Thus, section 2, first paragraph, first sentence of the Arbitration Act provides that the arbitrators may rule on their own jurisdiction to decide the dispute. As in other developed arbitration jurisdictions, this means that the arbitral tribunal by operation of law is entrusted with the authority to rule on the existence, validity and scope of the arbitration agreement and thereby to essentially rule on its own jurisdiction to decide the issues in dispute.s. 653

2.The arbitrators’ Kompetenz-Kompetenz under Swedish law is not limited merely to determining the validity or scope of the arbitration agreement and its application to the instant dispute. The arbitrators also possess authority to recognise or refuse to recognise their jurisdiction on grounds other than those related to the arbitration agreement. For example, the matter in dispute may be non-arbitrable. The arbitrators may, e.g. also consider an objection that a successor to a contract has only assumed certain rights or obligations under the contract without becoming a party to the arbitration agreement. The arbitrators also have authority to decide on the existence of impediments to the arbitration and if the tribunal has been validly constituted and has thereby achieved competence. This latter determination may involve issues such as whether the arbitration has been initiated in the correct manner by a party, whether the arbitrators are qualified and are impartial and independent or if a correct number of arbitrators have been appointed.s. 653

3.The principle of Kompetenz-Kompetenz is intrinsically linked to the principle of separability. This latter principle is based on the notion that the arbitration agreement forms a separate contract that is distinct from the main contract. The underlying rationale for this is that since the arbitration agreement contains procedural rules, the agreement is analytically to be distinguished from the main agreement, which basically governs substantive issues. Accordingly, the arbitrators’ assessment of their jurisdiction can be based on the assumption that the substantive part of the main agreement is invalid or has ceased to apply between the parties, whilst the arbitration agreement is nevertheless deemed binding. Thus the principle of separability enhances the effectiveness of the doctrine of Kompetenz-Kompetenz. Moreover, the principle of separability has been codified in the Arbitration Act as section 3 provides that an arbitration clause, when included in the main agreement, shall be deemed to constitute a separate agreement.s. 654

4.The two doctrines have been widely recognized as fundamental tenets of international arbitration law due to the advantages conferred thereby. Through the application of the principles, the parties can avoid referring jurisdictional matters to state courts and thus avoid the concomitant costs and delays of court proceedings regarding jurisdictional matters. Moreover, the parties are not provided with the opportunity to obstruct an arbitration simply by challenging the validity of the arbitration agreement and such validity will be decided independently from the validity of the main contract in which the arbitration clause will usually be included. In fact, one has to conclude that international arbitration would not have grown into the preferred dispute resolution mechanism in international commerce and business without the existence of these principles.s. 654

5.Of course, the arbitrators must not determine their own jurisdiction to resolve the dispute irrespective of the claims of the parties. However, the arbitrators are obliged, by a sua sponte examination, to try questions which may result in the invalidity of the arbitral award pursuant to section 33 of the Arbitration Act, i.e. whether the dispute is arbitrable or whether an arbitral award might violate public policy. This should also apply to flaws as a consequence of which the award cannot be deemed to constitute an award.s. 654