In Systembolaget AB v. Vin & Sprit AB, case no T 4548-08, the claimant, Systembolaget was the Swedish state-owned retail monopoly for alcohol. The respondent, Vin & Sprit, was previously a state-owned wholesaler of alcohol and had been a supplier to Systembolaget under a distribution agreement. Systembolaget partially terminated that agreement due to alleged material breaches of the contract. Vin & Sprit argued that Systembolaget had no right to partially terminate the contract and that it was entitled to damages for wrongful termination.

The arbitral tribunal rendered an award concluding that Systembolaget was not entitled to partially terminate the contract and awarded Vin & Sprit approximately 50% of the damages claimed. The tribunal decided that the parties had, in the distribution agreement, contracted out of the general principle that a contract can be terminated for material breach. Instead, the parties had a contractual right to terminate in the circumstances specified in the termination clause of the contract.

In its appeal to set the award aside, Systembolaget argued that Vin & Sprit had not invoked this interpretation of the contract when presenting its claim and that the tribunal had therefore exceeded its mandate (which is determined by the parties' statements). The Court of Appeal agreed. By basing its decision on an interpretation of the contract which had not been argued by either party, the tribunal had exceeded its mandate. The award was set aside.

Both parties to the dispute are Swedish. It is a fundamental principle of the Swedish Procedural Code that the court may base its decision only on such arguments as the parties have invoked. This principle is often applied by analogy to domestic Swedish arbitrations (it is less frequently applied in the context of international arbitrations). Nevertheless, appeals against arbitral awards are very rarely successful. It is even more unusual for the courts to accept an argument of this kind as the basis for setting aside an award, as the courts seldom accept the submission that a particular argument was not raised in the arbitration. Note, further, that although the appeal is interesting, its relevance is limited in the context of international arbitration. The Svea Court of Appeal did not grant leave to appeal the award.