An arbitration commenced in Stockholm between Joint Stock Company Acron (Acron) and Yara International ASA (Yara) concerning the issue of whether Yara had certain claimed rights deriving from a terminated shareholders' agreement. Among other things, Yara claimed damages of USD 129,000,000. Acron requested the arbitrators to order Yara to produce certain documents regarding the application of the shareholders' agreement by Yara and other companies.

The arbitrators assessed that the documents could be of relevance as evidence in the case and so ordered Yara to produce the documents in the arbitration proceedings. However, Yara did not provide the documents and Acron was subsequently granted permission by the arbitrators to apply to the District Court for an enforcement order.

In the Stockholm District Court, Yara contested Acron's request and argued that the court did not have jurisdiction. Yara also argued that Acron's request should be dismissed, since the parties were foreigners and Acron's request regarded documents that were being kept outside Sweden.

Yara also claimed that Acron's request should be dismissed because:

The District Court dismissed all of Yara's arguments and ordered Yara to produce the documents in the arbitration proceedings.

Yara appealed to the Svea Court of Appeal. It sought a declaratory judgment that the court lacked jurisdiction, in addition to its other pleas.

The Svea Court of Appeal ordered Yara to produce the documents.

The Court of Appeal, referring to a Swedish Supreme Court decision of 12 November 2010 (see Legal update, The Swedish Supreme Court confirms Swedish courts' jurisdiction to hear Russian Federation's request for a declaratory judgment in Yukos arbitration), dismissed Yara's request for a declaratory judgment.

The Court of Appeal concluded that the documents were properly identified by the arbitrator's decision and by the decision from the District Court. It also took into account that Acron had confirmed to the court that the request only included agreements and no other documents.

The Court of Appeal noted that according to section 26 of the Swedish Arbitration Act 1999 (SAA), a court to which a request for production of documents in arbitration proceedings has been brought with permission of the arbitrators, is not entitled to revise the arbitrator's assessment of whether the documents are important as evidence in the case. Thus, the Court of Appeal dismissed Yara's argument that the documents were irrelevant.

The Court of Appeal also held that the documents were to be regarded as "commercial secrets" (trade secrets) according to chapter 36, section 6, the Swedish Procedural Code. According to this section, trade secrets are exempt from disclosure unless there are extraordinary reasons for disclosing them. When determining if there were extraordinary reasons for disclosing the documents, the Court of Appeal held that it must balance the relevance of the trade secrets as evidence and the economic value of the secrets (that is, the value for the respondent party of withholding the information). Furthermore, the court held that it must consider whether disclosure would cause the party significant harm.

It noted that the arbitrators had decided to order Yara to produce the documents and had also granted Acron permission to bring the request of disclosing the documents before the District Court. With reference to the arbitrators' decisions, the Court of Appeal concluded that the documents were relevant as evidence in the case and that Acron had a justified interest in seeing the documents. Therefore, the court concluded that there were strong reasons for disclosing the documents.

When determining whether the disclosure would cause Yara significant harm, the Court of Appeal held that Yara had only argued in general terms. It also noted that the documents were quite old, which according to the court, led it to the conclusion that Yara's interest in not disclosing the secrets must have been reduced over time. Therefore, the Court of Appeal concluded that Acron's interest in taking part of the documents prevailed over Yara's interest in not disclosing them and ordered Yara to produce the documents in the arbitration proceedings.

One might ask whether the recent decision from the Court of Appeal has made it easier for a party in an arbitration to have its request to order a counterparty (or a third party) to produce documents relating to trade secrets approved by a Swedish court.

According to chapter 36, section 6 of the Swedish Procedural Code, a party cannot be ordered to disclose documents relating to commercial secrets (trade secrets), unless there are extraordinary reasons for doing so. When determining whether there are extraordinary reasons, a court must consider the documents to be of evidentiary relevance and also balance the interests of the party seeking disclosure against those of the party from whom disclosure is sought.

The Court of Appeal based its conclusion of the documents being important as evidence on the fact that the arbitrators had concluded that the documents were relevant as evidence in the arbitration and that there were strong reasons for ordering Yara to produce the documents and permitting Acron to bring its request of producing the documents to the District Court. Therefore, the Court of Appeal relied on the arbitral tribunal's assessment of the evidentiary value. It is to be noted that this approach of the Svea Court of Appeal appears to be different to the approach taken by the Court of Appeal in its decision from March 2010 (see Legal update, Svea Court of Appeal orders party to produce source code files in arbitration proceedings), when the court made its own assessment of whether the documents were of evidentiary value instead of referring to the arbitrator's assessment.

This recent decision from the Court of Appeal implies that it is relatively easy for the requesting party to persuade the court that there are "extraordinary reasons" whereby documents containing trade secrets may be ordered to be disclosed if the requesting party can refer to a decision by the arbitrators to produce those documents. This is unless the respondent party is able to provide sufficient evidence showing that the disclosure of the documents will cause significant harm.