REPORTING CLERK AND KEEPER OF THE MINUTES Reporting clerk CJ

Transcription

1 SVEA COURT OF APPEAL MINUTES Case No. 11 March 2009 Ö Division 1602 Reporting in Stockholm File index No. 33 Page 1 (4) THE COURT Judges of Appeal KÅ, ME (Reporting Judge of Appeal) and MJ REPORTING CLERK AND KEEPER OF THE MINUTES Reporting clerk CJ CLAIMANT Consafe IT AB, Box Enebyberg Counsel: Advokaterna Michael Karlsson and Max Granström Mannheimer Swartling Advokatbyrå AB Box Helsingborg RESPONDENT Auto Connect Sweden AB, c/o Bratt Sedelvägen 13, 3 tr Hägersten Counsel: Advokaten Jean-Jacques Zander Eurolawyers Advokatfirma KB Box Stockholm MATTER Bankruptcy APPEALED DECISION Decision of Södertörn District Court of 19 December 2008 in matter No. K Consafe IT AB (Consafe) has moved that Auto Connect Sweden AB (Auto Connect) shall be declared bankrupt and claimed compensation for its litigation costs before the District Court and the Court of Appeal. In support of its case, Consafe has referenced the following. The receivable on which the bankruptcy application is based is the outcome of the separate arbitral award Document ID Postal Address Address Telephone Telefax Opening Hours Box 2290 Birger Jarls Torg Monday Friday Stockholm svea.hovratt@dom.se 9 am 3 pm

2 Page 2 (the Arbitral award) rendered by Arbitration Institute of the Stockholm Chamber of Commerce (the Institute) on 21 October The Arbitral award is enforceable. The Arbitral award was given under the arbitration rules of the Institute, which the parties agreed through the arbitration clause, should apply to the arbitration proceedings. Auto Connect is insolvent because it has not paid the liability despite being reminded to do so. Auto Connect has disputed to any changes in the District Court s decision and claimed compensation for its litigation costs before the Court of Appeal. In support of its objections Auto Connect has referenced, amongst other things, the following. The Arbitral award is not enforceable, because it is invalid. The arbitral tribunal did not have jurisdiction to the issue of right of regress for advance payments during the arbitration proceedings, because the parties had never agreed thereon. Further, it is disputed that Auto Connect is insolvent. The receivable upon which the bankruptcy application is based is not clear and due, since Auto Connect has applied for a summons under Section 41 of the Swedish Arbitration Act before the Stockholm District Court and has also launched challenge proceedings before Svea Court of Appeal (Svea Court of Appeal Case No. T ) for the annulment of the Arbitral award. Further, Auto Connect has not acknowledged the liability by making a partial payment to Consafe, because Auto Connect has demanded repayment of that amount. Finally, Auto Connect has a counterclaim on Consafe under the agreement which lead to the arbitration proceedings and the amount of which is higher than the receivable upon which the bankruptcy application is based, and Auto Connect has made it clear to Consafe that it is Consafe who will pay the costs for the arbitration proceedings. The parties have referenced documentary evidence. Auto Connect has before the Court of Appeal requested that CB shall be heard under oath, to establish that the parties had not agreed on a right of regress for any party during ongoing arbitration proceedings and that Consafe had agreed to bear all costs arising in connection with arbitration proceedings.

3 Page 3 The case is reported whereupon the Court of Appeal renders the following DECISION (to be announced on 13 March 2009) Grounds The issue of Consafe s right to apply to have Auto Connect declared bankrupt It is not disputed as between the parties that the arbitration agreement includes an arbitration clause providing that the arbitration rules of the Institute shall apply to the arbitration proceedings. Auto Connect, however, has objected that the parties did not agree that the new arbitration rules, which entered into force on 1 January 2007, on rights of regress upon advance payments under Section 45(4) should apply between the parties. Section 6 of Chapter 2 of the Swedish Bankruptcy Act provides that a counterclaim which has been determined by a valid arbitral award shall be accepted as a basis for an application to have the debtor declared bankrupt, provided that the arbitral award is enforceable under Sections 15 or 17 of Chapter 3 of the Swedish Enforcement Code and provided that no public court following a challenge or appeal of the award has ordered otherwise. While it is true that Auto Connect is currently bringing a case against the Arbitral award, but the Court of Appeal has not declared that it may not be enforced. The Court of Appeal finds that the Arbitral award is of such nature that it pursuant to the second paragraph of Section 6 of Chapter 2 of the Swedish Bankruptcy Act confers upon Consafe the right to apply to have Auto Connect declared bankrupt. What Auto Connect has referenced in the Court of Appeal s case No. T does not affect this conclusion. Auto Connect s claim that Consafe had undertaken to pay all costs for the arbitration proceedings should have been presented during the arbitration proceedings before the separate arbitral award was rendered. The testimony

4 Page 4 of CB is thus irrelevant in this respect. The same applies to other parts of the testimony, considering that the Court of Appeal has found that the Arbitral award shall be accepted. The testimony of CB shall as a result be dismissed. The question of Auto Connect s alleged insolvency It is not disputed between the parties that Consafe has encouraged Auto Connect to pay its liability pursuant to item 1 of the first paragraph of Section 9 of Chapter 2 of the Swedish Bankruptcy Act. From the investigation in the case, it has been established that the other requirements of the relevant Section are met and that as a result Auto Connect shall be deemed insolvent, unless the opposite is established. Auto Connect has not established that it has a valid counterclaim against Consafe. According to the opinion of the Court of Appeal, what has been otherwise maintained and referenced before the Court of Appeal by Auto Connect has not established that the company is solvent. Thus, Auto Connect shall upon this conclusion be deemed insolvent and the appeal shall be granted. Litigation costs Upon this outcome, Consafe shall be discharged from the liability to compensate Auto Connect s litigation costs before the District Court and Auto Connect shall be ordered to compensate Consafe s litigation costs before the District Court and the Court of Appeal. The claimed amounts before the District Court and the Court of Appeal are deemed reasonable.

5 Page 5 Decision 1. The Court of Appeal dismisses the testimony of CB. 2. By reversing item 1 of the District Court s decision, the Court of Appeal declares Auto Connect Sweden AB bankrupt pursuant to Section 2 of Chapter 1 and Section 9 of Chapter 2 of the Swedish Bankruptcy Act. 3. By reversing item 2 of the District Court s decision, Consafe IT AB is relieved of its liability to compensate Auto Connect Sweden AB s litigation costs before the District Court, and Auto Connect Sweden AB is ordered to compensate Consafe IT AB s litigation costs before the District Court in the amount of SEK 9,504, all comprising costs for legal counsel, plus interest thereon under Section 6 of the Swedish Act on Interest from 19 December 2008 until the date of payment. 4. Auto Connect Sweden AB is ordered to compensate Consafe IT AB for its litigation costs before the Court of Appeal in the amount of SEK 45,000, all comprising costs for legal counsel, plus interest thereon under Section 6 of the Swedish Act on Interest from the date of the Court of Appeal s decision until the date of payment. It is for the District Court to undertake such measures as required as a result of this decision. HOW TO APPEAL, see appendix Appeals to be submitted by 14 April 2009 [ILLEGIBLE SIGNATURE] CJ [INITIALS] Minutes approved/[initials]