Arbitration Clause invalidated by Swedish court—missing explicit CMR reference (NTG Multimodal GmbH v If Skadeförsäkring AB)
Arbitration analysis: In a dispute between If Skadeförsäkring AB (‘If Skadeförsäkring’) and NTG Multimodal GmbH (‘NTG’), the Svea Court of Appeal held that an arbitration clause in a contract falling within the scope of the CMR Convention on the Contract for the International Carriage of Goods by Road (‘CMR’) was invalid. Because the clause instructed the application of domestic law rather than expressly the CMR, the clause was deemed void under article 41 CMR and the award was set aside. In the alternative, If Skadeförsäkring argued that NTG had ratified or entered into a new arbitration agreement by invoking the clause to support an application to dismiss court proceedings abroad. However, the court observed that those proceedings concerned different claims and held that the invocation of the arbitration clause did not evidence an intention by NTG to ratify or conclude a new arbitration agreement. Finally, with respect to costs, If Skadeförsäkring contended that NTG’s participation bound it to the SCC arbitration rules and obliged it to contribute to the advance on the costs of the arbitration. The court rejected this argument, noting that NTG had from the outset contested arbitral jurisdiction and could not be deemed to have accepted the SCC arbitration rules merely by participating to safeguard its substantive interests. The decision underscores that CMR-governed contracts with arbitration clauses must expressly instruct the tribunal to apply the CMR under article 33; a reference to national implementing law is insufficient. It also shows that alleging ratification of a new arbitration agreement carries a heavy evidential burden, and conduct in relation to foreign proceedings generally will not suffice. Finally, the case shows that participation solely to contest jurisdiction does not amount to acceptance of the SCC arbitration rules for the purposes of costs. Written by James Hope, partner at Advokatfirman Vinge KB, and Erik von Zweigbergk, associate at Advokatfirman Vinge KB.