1 · Introduction

1.An arbitral award or a procedural order may sometimes be ambiguous, as may statements made by the chair during a hearing. Such ambiguity may take different forms, and the wording may be more or less confusing. A party’s claim for relief or the basis in support of it may also be expressed in an unclear way. Further, an arbitration clause or a procedural agreement may occasionally be vaguely worded. In all those cases the lack of clarity causes problems of interpretation.s. 416

2.Placing a burden on one of the parties can solve problems of uncertainty. Thus, when uncertainty refers to facts, applying a principle of burden of proof may solve the problem. If a party cannot discharge its burden of proof for certain facts, the award must not be based on those facts. Problems of interpretation can be solved in a similar way by placing a burden on one of the parties. If a legislative provision or a precedent requires that a certain type of view of a contracting party can only be accepted if it has been made expressly, this requirement creates a presumption in the other party’s favor (tolkningsföreträde) in cases where the wording causes problems of interpretation. Sometimes the burden to clarify or to prove are mentioned as two alternatives, for instance where it is asserted that a contract between two parties creates a right for a third party, if it is proved or if it is made clear in the contract.s. 416

3.If a party has expressed a view in an obscure way, the arbitrators can reject its interpretation. A reason for this is that the party ought to take the consequences of its failure to express its view in a more comprehensible way. If the arbitrators have not clarified the issue, they may either disregard the statement or accept an interpretation presented by the other party. A party’s alleged purpose with a sentence included in an arbitration clause may also be rejected if the wording is ambiguous or unclear. When a procedural order is drafted in a confusing way, none of the parties can be blamed for this. The abstruseness is as a rule caused by the arbitrators. Therefore, there is no reason to place a burden on one of the parties and request that a party has to convince the arbitrators that its interpretation is correct. However, other reasons may justify a presumption for accepting one of the parties’ interpretations. If courts or arbitrators are inclined in some special cases to establish a clarity requirement, it is of great importance that reasons for this assessment are presented in the judgment or the award.s. 417

4.It seems that the two Swedish words clear and express are used as synonyms in the governmental bill to the Swedish Arbitration Act (SAA). Those words may however have different meanings. An express view has to be put into words in a contract. If there is no such clear support for an interpretation in the written contract, this view may nevertheless be implicitly clear taking into consideration other interpretation factors than the wording of the contract. Sometimes it is provided that a procedural declaration has to be specific, firm or determined. Those words express requirements that slightly deviate from the requirement of clarity. Under the SCC Rules and the Swedish Code of Procedure, the statement of claim shall include the specific relief sought. It seems that the Swedish Supreme Court stretched this wording when it accepted a request that a contractor should be ordered to remedy existing defects consisting of moisture penetration in a garage, lacking an indication of the remedial action and the precise location of the defects. The requirement of specific relief perhaps does not mean that the claim must be specified in all respects. It may suffice that it is so in some important respects. The amount claimed has to be specified.s. 417

5.When dealing with matters of interpretation, the wording will be of great importance. The degree of uncertainty often varies. A statement may be slightly unclear, obscure, confusing or contradictory. Further, the effects of the different interpretations can be more or less burdensome for a party. Thus, an interpretation of a clause sometimes means that a party is deprived of a fundamental right, as appointing an arbitrator or applying for nullification of the award. Tribunals and courts are probably disinclined to accept such interpretations. The opposite is true if an alternative construction of the wording of an arbitration clause or a procedural order would place the parties on equal footing. The principle of equal treatment strongly speaks in favor of such an interpretation.s. 417

6.A requirement of clarity in support of an interpretation is not a part of the ordinary way of interpreting a contract or a declaration made by a party. The Supreme Court has stated that decisive for the interpretation is the wording of the contract, its legal background, the general object and the context. The Supreme Court has used a similar, but more extensive, formula for interpretation of insurance terms. A court shall take into account the wording, the purpose of the terms, the character of the insurance and the customers, drafting tradition, adherence to wording in legislation, case law and so on. The Supreme Court added that one also has to assess if an interpretation is sensible and reasonable. In cases where a result cannot be achieved after such an assessment, the Supreme Court held that general principles of interpretation might be applied, as the principle contra stipulatorem. This means that several factors have to be considered in the interpretation and not just one, such as the wording of the contract. The principle of contra stipulatorem shall be used only as a last resort if the other factors would not form a sufficient basis for solving the interpretation problem. If a clause is drafted in a clear way, this factor is not alone decisive under general principles of interpretation.s. 418

7.When a requirement of clarity has been established either through legislation or by the Supreme Court, then the wording will be decisive for the interpretation. This means that a requirement of clarity forms an exception from ordinary principles of interpreting a contract. Thus, it is of great importance to determine under what circumstances a requirement of clarity ought to be posed. Is for instance a requirement of clarity justified where a party’s interpretation of a clause would lead to a burdensome effect for the other party?s. 418

8.A requirement of clarity may be posed in order to protect just one of the contracting parties, for instance a consumer. Where a businessperson submits an interpretation in such a case the wording of the contract will be decisive, not other interpretation factors. If, however, a consumer presents an interpretation, other arguments than the wordings of the contract may by be of great importance for a court. In a consumer price dispute, the Swedish Supreme Court held that rather stringent requirements have to be posed on a businessperson in order to induce him and her to contribute to the drafting of a contract that makes the meaning clear to the consumer. The legal consequences for the consumer were reasons for placing a “clarity burden” on the businessperson. Thus, the Court stressed that the contract concerned an isolated case of great importance for the consumer, where the businessperson furnished the contractual document concerning such an important matter for the consumer as the price. In the case at hand, the written contract contained clauses on the delivery of a prefabricated house, but not on the mounting of the house. In this respect, the Supreme Court concluded that the written contract did not give an exhaustive account for the contractual relationship. Thus, the clarity requirement raised against a businessperson will not prevent a court from paying regard to consumer arguments that lack support in the contract.s. 418

9.The Supreme Court has explained the meaning of the requirement of clarity in some civil law cases. These cases may be of interest when dealing with questions in the field of arbitration, although the cases are not of procedural character. Sometimes a person has several debts in relation to a creditor. If the debtor makes a payment, he or she has the right to choose and indicate the debt that is paid. When the debtor exercises this right, a certain amount of clarity is required. Even if a determination does not need to be express, it may be evident from the circumstances at hand. If the amount of the payment coincides with one of the debts, this is a sufficient ground for such a determination. In a case concerning interpretation of a penalty clause, a point of departure was that the clause deviated from the non-mandatory provisions of the law. Where such a clause is surprising, far-reaching and clearly advantageous for one of the parties (a contractor), the Supreme Court held that clear support by the words of the contract or by other interpretation factors are required. The requirement of clarity can be met in other ways than an express statement in the contract. Here the words clearly and expressly have different meanings.s. 419

10.Sometimes a contracting party denies that there is an effective reference to standard terms. In the legal literature, it is stated, in respect to unexpected and burdensome terms, that it is required that the terms are visible and apparent. It seems that the Supreme Court previously has held that arbitration clauses were burdensome. Later the Supreme Court has explained that they are not of a surprising or burdensome character for businesses of some size (though probably with an exception for small businesses).s. 419

11.In some cases, the Supreme Court has held that no requirement of clarity shall be maintained. In one case, a tenant asserted that a contract term stating a duty to shut of dishwashers was not clear concerning the type of dishwasher. The clause ought to be taken as a provision aiming at preventing water damage. The Supreme Court did not accept the tenant’s view, but without giving reasons for the nonacceptance. In cases where one of the spouses claims that he or she is a matter-of-fact (not registered) owner of a house where they live, it is required that the spouses as buyers of the house have the joint intention to be co-owners. This requirement can be met by a silent agreement. The reason why the Supreme Court has not established a requirement of clarity is explained by family law considerations to create economical safeguards for the spouse that is not a registered owner.s. 420

12.When it comes to procedural orders made by a court or arbitrators, a requirement of clarity is often justified. The Swedish Supreme Administrative Court has touched upon this general question in a recent case concerning a writ of subpoena and an unsanctioned injunction. When a public authority has issued an order under a penalty of fine, it is required that the order is clear and that the person who is enjoined to do something understands in all respects what he or she has to do to avoid the fine. An obligation to do something or refrain from doing something has to be defined in a clear way. As a consequence of uncertainty, a person may refrain from carrying out his obligations or do so only partly.s. 420

13.When the legal effect of a failure to comply with an order is burdensome for the party it seems reasonable to stick to the view of clarity. The Supreme Administrative Court held that the requirement of clarity is essentially the same in cases where the order is unsanctioned. A reason for this view was that a failure to comply with such an order, leads to a new order backed by a sanction. Also in arbitration, a procedural unsanctioned order could be replaced by a sanctioned order, under which a party will lose its right to develop its case or to invoke new grounds or new evidence. For efficiency reasons, it is important that there is no need to clarify vaguely worded procedural orders at a later stage. The need for subsequent clarifications may cause unnecessary costs. Thus, the meaning of an order ought to be clearly understandable for both parties, and not just for one of them.s. 420