Olof Rågmark, partner, Advokatfirman Delphi, Stockholm
The Svea Court of Appeal has dismissed an appeal against an SCC award, upholding the tribunal's finding that the contracts in question (which included arbitration clauses) had been duly entered into.
In a decision on 20 May 2010, the Svea Court of Appeal dismissed an appeal against an SCC arbitral award issued on 24 September 2008 in the matter Stena RoRo AB v Baltitsky Zavod JSC (below "Stena" and "Baltitsky"), Svea Court of Appeal matter T8622-08.
The award deals with Stena's claim for damages for non-performance of certain shipbuilding contracts (and optional contracts) and whether those contracts had been duly entered into, in view of a "subject to board approval" provision in the contracts, the validity of limitation of liability provisions in the contracts (and the optional contracts) and calculation of damages. The arbitral tribunal found that the contracts had been duly confirmed by Stena's board of directors and awarded Stena damages and losses whilst upholding agreed limits of liability protecting the yard.
Baltitsky appealed the award, maintaining that board approval had not been given by Stena within the agreed time frame and that therefore no agreements had entered into force, not even the arbitral agreements contained in the contractual wordings.
The Svea Court of Appeal found, as had the arbitral tribunal, that the Stena board of directors had indeed given its approval in time. Thus, the court did not have to rule on the issue of whether the arbitration agreements in the contracts were dependent on board approval or should be deemed binding on the parties in any event.
It should be noted that the "subject to board approval" provisions which gave rise to the issue of whether the contracts in question had entered into force, did not provide for a specific time for the parties to lift the "subject to" proviso by confirmation to the other party (or to the brokers), but only a time limit within which the board's decision to approve should have been made.