Arbitration Institute of the Stockholm Chamber of Commerce (SCC) for a company from Kazakhstan
In this article we will talk about international company disputes. Namely, the resolution of such disputes at the Arbitration Institute of the Stockholm Chamber of Commerce.
Quite a lot of companies from Kazakhstan have business relations with organizations from other countries. And often a dispute arises between counterparties. This can be a dispute over different types of economic relations: purchase and sale, debt, supply of goods, services, and so on.
When concluding a contract, the parties agree on the place where their dispute will be resolved. One such option is the Arbitration Institute of the Stockholm Chamber of Commerce, which we will talk about in the article.
Legal status of the Arbitration Institute of the Stockholm Chamber of Commerce
The Arbitration Institute of the Stockholm Chamber of Commerce or SCC is a regular commercial arbitration. In other words, a non-state court that resolves economic disputes between companies from different countries. The arbitration is located at the Stockholm Chamber of Commerce.
The legal basis for all international arbitrations is the European Convention on Foreign Trade Arbitration of 1962, and international arbitration decisions are enforced in more than 170 countries (based on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards).
That is, if there is a decision of international commercial arbitration, then it will be executed in the territory of these 170 countries.
Stockholm arbitration is a fairly popular court for resolving an international dispute between companies. Thus, according to statistics, 153 disputes were registered on the Arbitration website in 2021. That is about 12 disputes per month. 47% of them were international disputes.
Advantages of Stockholm arbitration
As we have already said, the Arbitration Institute of the Stockholm Chamber of Commerce is an independent, non-state commercial court. It has several advantages. Let’s talk about them.
→ Firstly, in Arbitration, the arbitrators consider the merits of the case. Here is a wider list of evidence. For example, interviewing witnesses or other methods are often used. The main goal is to resolve the dispute, not to consider theoretical legal issues.
→ Another important advantage is that the parties themselves can choose arbitrators to consider the dispute. For example, the parties can choose a specialist in international contracts for the supply of goods with knowledge of English.
Typically, the parties select an arbitrator in advance and submit documents to resolve their dispute. The parties can choose the law under which the case will be considered. This may be the national law of a country or international rules, for example Incoterms 2000.
→ It is also not necessary to attend the meetings of the Stockholm Arbitration. The arbitration rules of the court establish the holding of meetings and organizational meetings through personal meetings, as well as through video conferencing and telephone communications. This entire procedure is agreed between parties.
All disputes in Stockholm commercial arbitration are confidential, decisions cannot be published and the result is known only to the parties to the international dispute.
Stockholm arbitration has several types of procedures. Regular and accelerated. There are several differences in the expedited procedure:
- the number of motions that parties can file is limited;
- deadlines are shorter;
- the dispute is considered by a sole arbitrator;
- Oral hearings are held only at the request of one of the parties.
There is also an emergency procedure. The parties send documents, an arbitrator is selected within 24 hours and within 5 days he resolves the dispute.
How to apply to the Arbitration Institute of the Stockholm Chamber of Commerce (SCC)
Kazakhstan is a member of the New York Convention and a company from Kazakhstan can apply to the Stockholm Arbitration Court to resolve its dispute.
1.1 Arbitration clause
Let’s talk about the legal aspects of an international dispute. An arbitration clause is the legal basis for a dispute to be resolved in Stockholm arbitration. It may be in a contract between the parties or a separate arbitration agreement.
An arbitration clause means that the counterparties have chosen the place, language and rules for the consideration of the dispute.
The Stockholm Arbitration Court recommends using the following forms in the document. For example:
Any dispute or claim in connection with this contract or the breach, termination or invalidity thereof will be finally resolved by arbitration at the Arbitration Institute of the Stockholm Chamber of Commerce.
If the amount in dispute does not exceed 100,000 Euros, the Rules for Expedited Arbitration Procedure of the Arbitration Institute of the Stockholm Chamber of Commerce shall apply.
If the amount in dispute exceeds 100,000 Euros, the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce shall apply. If the amount in dispute exceeds 100,000 Euros but is less than 1,000,000 Euros, the arbitral tribunal must consist of one arbitrator. If the amount in dispute exceeds 1,000,000 Euros, the arbitral tribunal must consist of three arbitrators.
The amount in dispute includes the claimant’s claims in the Request for Arbitration and any counterclaims in the respondent’s statement of argument.
Recommended additions:
The place of arbitration will be […].
The language of the arbitration proceedings will be […].
This contract is governed by substantive law […].
1.2 Appointment of an arbitrator and organizational fee
The parties can send the necessary information to the arbitration email. Here is the mail- arbitration@sccarbitrationinstitute.com
We write which arbitrator we chose, the details of the parties, a description of the dispute, requirements and a receipt for payment of the organizational fee.
It is worth remembering that arbitration is more expensive than going to state court. Costs can be calculated using the calculator on the official website of the Stockholm Arbitration. https://sccarbitrationinstitute.se/en/our-services
So, for example, if the amount of the claim is 100,000 Euros, then the legal costs will be € 21,462, of which € 5,775 are the administrative organizational fee and € 12,887 the arbitrator’s fee.
However, there is one plus. There is a compensation rule. It is written in the official rules of the Stockholm Arbitration.
The arbitral tribunal, at the request of one of the parties, may oblige the party in the final arbitration award to compensate the costs incurred by the other party, including the services of legal representatives.
This means that the party that wins the dispute will receive compensation for the arbitration and administrative fees.
Along with the payment of the registration fee, as we have already said, a request for arbitration is sent to the post office. It needs to describe your situation.
It is worth paying special attention to the evidence. This is what confirms your position, why you are right. This may include contracts, checks, agreements, correspondence and oral evidence such as witnesses.
The Arbitration Tribunal will also determine the deadline for filing a statement of claim and response for the defendant.
In the statement of claim it is important to write:
- statement of specific requirements;
- a statement of the facts and circumstances referred to by the plaintiff;
- evidence referred to by the plaintiff.
1.3 Interim measures
If there is a possibility that the defendant may avoid financial liability before receiving a decision from the Stockholm Arbitration Court, the party may request the introduction of interim measures in relation to his property.
The decision on interim measures must be made in the form of an order or an arbitral decision.
The decision on interim measures is made within 5 days from the moment the case is referred to the arbitrator.
1.4 Meetings and receipt of the arbitration decision
After consultation with the parties, the Arbitral Tribunal must determine:
- the date and time of the hearing, and
- whether any hearing should be held in person, at the other location, or remotely using video conferencing or other means of communication.
Remember that the parties have chosen the place, language and applicable law for their dispute. If this has not been done, then the Arbitration Tribunal will do it, so it is better to agree with the counterparty in advance.
Before holding a hearing, the Arbitral Tribunal may oblige the parties to identify all witnesses or experts they wish to call at the hearing, as well as specify the circumstances they wish to prove by such testimony.
After the hearing, the arbitration tribunal will make a decision on your case. This will be done no later than six months from the date of transfer of the case to the arbitration panel.
Another advantage of applying to Stockholm arbitration is that the parties will immediately receive a decision.
If the counterparties decide to conclude a settlement agreement, then it is better to do this as a decision of the Stockholm Arbitration, because then it may need to be legalized, for example, in Kazakhstan.
Conclusion
Every year, many companies from different countries, including Kazakhstan, apply to Stockholm Arbitration. As we can see, this is not an easy and expensive procedure. Knowledge of private international law and the rules of the Arbitration Institute of the Stockholm Chamber of Commerce is required.
However, in return the parties receive:
- Efficiency of dispute resolution;
- Specialist arbitrators;
- Speed of resolving the issue;
- Confidentiality
Follow our advice, ask for help to specialists, and you will succeed.