The Court of Appeal rules that Poland´s claim is dismissed, except for a minor part, which means that Poland is liable to pay damages of approximately 1.5 billion SEK to the investment company.
At the end of the 1980s the Republic of Poland and the Grand Duchy of Luxembourg [et al] entered into an investment agreement. The agreement included a provision under which an investor, in the event of a dispute concerning an investment, had the right to bring proceedings before an arbitral tribunal. In 2017, following arbitration proceedings at the Arbitration Institute of the Stockholm Chamber of Commerce, two arbitral awards were rendered in a dispute between the investment company from Luxembourg on the one hand, and Poland on the other. The investment company had sought compensation for damages claiming that Poland had violated its obligations under the investment agreement by expropriation of the investment company´s shareholdings in a polish bank. The arbitral tribunal ruled in favor of the investment company and held that Poland had breached its obligations under the investment agreement and that, as a result, the investment company was entitled to compensation for losses which in SEK amounts to approximately 1.5 billion SEK.
Poland challenged the awards and claimed that they should be declared invalid, or be set aside. The proceedings took place at Svea Court of Appeal since Stockholm was the seat of arbitration. Poland claimed that the provision regarding dispute resolution in the investment agreement was incompatible with EU law according to a judgement from the Court of Justice of the European Union in the so called Achmea-case from March 2018. With reference to the Achmea-case, Poland claimed that the awards should be declared invalid. Poland also claimed that the arbitral tribunal had committed several other errors which should result in the awards being set aside.
Svea Court of Appeal has today announced its judgement in the case. According to the judgement, Poland´s claim is dismissed except for a minor part. Poland therefore remains liable to pay damages of approximately 1.5 billion SEK to the investment company, in accordance with the arbitral awards. However, Svea Court of Appeal finds that the arbitral tribunal committed one error during the arbitration proceedings which leads to the setting aside of one paragraph in the final award regarding post-award interest of approximately 200 million SEK.
Due to the outcome of the case, Poland is liable to compensate the investment company for their legal costs.
Svea Court of Appeal’s judgement may be appealed to the Supreme Court of Sweden.