Arbitration Institute of the Stockholm Chamber of Commerce (SCC) for a company from Uzbekistan
The Arbitration Institute of the Stockholm Chamber of Commerce or Stockholm Arbitration is a universal way to resolve economic disputes between companies from different countries, including Uzbekistan.
According to statistics, Stockholm arbitration is a fairly popular place for resolving an international dispute between companies. So, according to statistics on the Arbitration website in 2021, 153 disputes were registered. That is about 12 disputes per month. 47% of them were international disputes.
Unlike state courts, commercial arbitration is more effective for international economic disputes, since the parties can choose the arbitrator, language and applicable law. We will talk about this in the article, tell you about the advantages, and also give useful instructions.
How can a company from Uzbekistan apply to the Stockholm Arbitration?
This is the first and quite important question that arises among counterparties. Before answering, let’s talk a little about international law.
The legal basis for all international arbitrations is the European Convention on Foreign Trade Arbitration of 1962, and international arbitration awards are enforced in more than 170 countries (based on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards).
Uzbekistan also recognizes commercial arbitration decisions and even has its own law on this issue (Law of the Republic of Uzbekistan, dated 02/16/2021 No. Law-674).
Counterparties have two options for applying to the Stockholm Arbitration.
- Arbitration clause in a contract. The parties, when agreeing on the terms of the contract, write in it that the dispute will be resolved in Stockholm arbitration;
- Arbitration Agreement. An additional agreement to the contract, which states that the dispute will be resolved in Stockholm arbitration.
Recommended additions to the arbitration agreement:
The place of arbitration will be […].
The language of the arbitration proceedings will be […].
This contract is governed by substantive law […].
When the arbitration tribunal accepts a statement of claim, it will definitely look at the basis for accepting the claim.
Dispute in Stockholm arbitration involving a company from Uzbekistan
Stockholm Arbitration is a non-state court, it is independent, has an independent system and arbitrators.
An arbitrator is the name of a judge in commercial arbitration. The big advantage is that the parties to the dispute themselves choose the arbitrator. This often helps resolve the dispute more effectively, since counterparties can choose a specialist in their field. It is unlikely that a government judge will have a good understanding of, for example, international investment contracts.
The arbitrators consider the case on its merits. Here is a broader 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.
This means that a dispute in Stockholm arbitration has fewer formalities and can be more efficient for an international dispute.
It is also important that the parties are free to choose the language of the trial. (As a rule, English is chosen). You can also choose the format of the trial.
If the parties choose the remote online format, they will not need to come to Stockholm. This is quite convenient for partners from different countries.
In a contract, the parties agree on the applicable law. It is under this law that the arbitrator will consider the dispute. The national laws of the country of the party to the dispute or the Incoterms rules may also apply.
If the parties have not chosen the language, place and applicable law, then the Arbitration Tribunal will do so, so it is better to agree in advance with the counterparty.
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 Procedures
Stockholm arbitration has several procedures.
Usual procedure:
6 months from the date of transfer of the case to the arbitration panel, it can be extended at the reasonable request of the arbitration panel.
Simplified procedure:
- the number of motions that parties can file is limited
- deadlines are being shortened
- the dispute is considered by a sole arbitrator
- Oral hearings are held only at the request of one of the parties.
Emergency procedure:
An emergency arbitrator must be appointed within 24 hours of receiving a party’s application, after which he must make a decision regarding interim measures within 5 days.
The consideration period is 6 months.
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 must apply.
If the amount in dispute exceeds 100,000 Euros, the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce must 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.
Submitting a claim to the Stockholm Arbitration Court
Now we will tell you how a company from Uzbekistan can file a claim with the Stockholm Arbitration Court.
The first step is to request arbitration. You can write by email or send through the website. – arbitration@sccarbitrationinstitute.com
In the request, you must select a procedure, select an arbitrator, the language of the dispute, attach a receipt for payment of the organizational fee and an arbitration clause (it can be in the contract or an additional arbitration agreement).
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.
Example: A company from Uzbekistan needs to repay a debt for the supply of goods in the amount of 200,000 euros.
In such a situation, the company from Uzbekistan will pay 50,593 euros, of which 7,980 euros are the SCC administrative fee, 36,014 euros for the judges’ fees and 6,599 euros for organizational expenses. Such costs will occur if the parties choose the usual procedure and three arbitrators. (One arbitrator will be cheaper).
Cost compensation principle
There is one rule in the arbitration rules that is interesting to us.
“The arbitral tribunal, at the request of one of the parties, may oblige a party in the final arbitration award to compensates the costs incurred by the other party, including the services of legal representatives, taking into account the outcome of the case.”
This means that if a company from Uzbekistan wins the dispute, it can file a claim and receive compensation for all legal costs.
Therefore, it is necessary to prepare procedural documents well and form a legal position in order to win the dispute and recover large arbitration costs.
Statement of claim to the Stockholm Arbitration Court
The second important stage of a dispute in arbitration is writing a statement of claim.
Legal position is the norms of international and national law that confirm your position, which particular rights of the plaintiff were violated.
Search and collection of evidence. It is necessary to find all written and oral information that is related to the dispute. Firstly, this is a written contract, receipts, payment orders, acceptance certificates, customs acts. Anything that can show that the plaintiff is right and that the company fulfilled all obligations under the contract.
Also, in some situations there may be witnesses; the Stockholm Arbitration allows them to be invited.
Plaintiff’s claims. In this part of the claim, it is necessary to write what the company wants to receive from the counterparty who violated its obligations. For example, to collect a monetary debt, a penalty, a fine and legal costs.
In some situations, it is necessary to request that the Stockholm Arbitration Court establish interim measures for the defendant.
Such measures are necessary if there is a chance that the defendant will be able to hide or sell his property. Interim measures will not allow him to do this.
The decision on interim measures must be made in the form of an order or an arbitral award.
The decision on interim measures is made within 5 days from the moment the case is referred to the arbitrator.
Meetings and obtaining a decision of the Stockholm Arbitration Court
After accepting the claim, the arbitration tribunal will set a date for a court hearing. At the request of the party, the hearing can be held online.
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.
The resulting decision will be recognized in Uzbekistan, because the country is a party to the international convention. However, in order for it to be executed, you need to apply with the decision to the state court in Uzbekistan.
If the parties have entered into a settlement agreement, then this must be done by arbitration decision, because state courts in Uzbekistan recognize arbitration decisions.
Advice from lawyers for a company from Uzbekistan
Applying to Stockholm arbitration is an expensive procedure, but it can be more effective than a state court. First of all, a company from Uzbekistan needs:
- Try to reach an agreement with the counterparty without going to court. (Written complaint).
- Collect all evidence that the company is right. (Contract, checks, acts, etc.).
- Review the contract and applicable law.
- View the Arbitration Rules.
- Calculate legal costs.
- Research arbitrators on the arbitration website.
The best way out in such a situation would be to contact a specialist with knowledge of international law and extensive experience in such disputes.