Procedural Background and Respondent's Application

This document is a decision by an arbitral tribunal constituted under the 2017 SCC Rules, ruling on an application filed by the Respondent, Georgia. Following the Tribunal's Partial Final Award on Jurisdiction and Admissibility, the Respondent initiated set-aside proceedings before the Svea Court of Appeal in Sweden. Concurrently, the Respondent applied to the Tribunal requesting a stay of the arbitration pending the outcome of the court proceedings. In the alternative, the Respondent sought an order for the Claimant to provide security for costs in the amount of USD 5 million, or a further alternative order for the Claimant to furnish an undertaking to comply with any future adverse costs award.

The Tribunal's Analysis and Findings

The Tribunal analyzed and rejected each of the Respondent's requests in turn. Regarding the stay, the Tribunal interpreted Section 2 of the Swedish Arbitration Act as granting it discretion to continue or stay proceedings, without establishing a default position or presumption. It balanced the duty of expedition under the SCC Rules against considerations of efficiency. The Tribunal denied the stay for two principal reasons: first, it found that the Respondent could recover any wasted costs through a subsequent costs award, as the Tribunal would not be functus officio for that purpose if the jurisdictional award were set aside. Second, the Tribunal was not persuaded by the Respondent's arguments that the Swedish courts were 'more likely than not' to set aside the Partial Final Award, distinguishing the Swedish and EU-related case law cited by the Respondent.

The Tribunal also denied the alternative request for security for costs. Applying the 'exceptional circumstances' standard under Article 38 of the SCC Rules, it found the high threshold was not met. The Tribunal noted its inability to assess the merits of the case at this early stage and considered the Claimant's representation of possessing sufficient assets in the UK, which the Respondent had not proven to be unenforceable. The final request for a costs undertaking was rejected as duplicative and inappropriate, given the parties' agreement that the Tribunal would retain the power to issue a costs award even if its jurisdiction were ultimately denied by the Swedish courts.

Decision

The Tribunal formally dismissed the Respondent's Stay Application in its entirety. The decision on the costs associated with the application was reserved for a later stage.