Jura novit arbiter? How to apply and ascertain the content of the applicable law in international commercial arbitration in Sweden

Abstract

Despite a general harmonization of international arbitration law and arbitral procedure, there is no international consensus on how the applicable substantive law in arbitration should be ascertained and applied. In Swedish law, this issue – often discussed in terms of whether jura novit curia applies to international arbitration or not – is uncertain. This thesis makes a comparative analysis of English, French, Swedish and Swiss law in order to recommend a solution to this uncertainty.

In national courts, two basic approaches exist in how to ascertain and apply the substantive law. In civil law jurisdictions, the judge is generally obliged to research the law and apply the correct legal basis ex officio under the legal maxim jura novit curia. This is the case in Sweden, France and Switzerland. The freedom of the judge to apply the law ex officio is however limited to some extent by the parties’ right of disposition and right to be heard. In common law jurisdictions, the parties are generally responsible for researching the law and presenting legal arguments. Under the adversarial principle, the judge must refrain from conducting legal research and from raising legal issues ex officio. Such is the case, for example, in England. When foreign law is applied in national courts, however, the differences between the common and civil law jurisdictions appear less drastic. In England as well as in France, Sweden and Switzerland, it is generally the parties who are responsible for ascertaining the content of the applicable foreign law. Yet, in Sweden and France, the court still has a secondary responsibility for ascertaining the content of foreign law.

In international arbitration, the arbitral tribunal generally enjoys considerable liberty in ascertaining and applying the applicable substantive law. Rules applied in national courts are rarely imposed in international arbitral procedure. In Sweden, however, this issue is uncertain. In England, France and Switzerland, at least two factors are common: (1) the parties are generally responsible for ascertaining the content of the applicable substantive law, and (2) the arbitral tribunal enjoys a discretionary power to research the law and raise legal issues ex officio, this authority is limited by the parties’ right to be heard on points of law. The underlying principle is that the arbitral tribunal may not take the parties by surprise when it applies the law; the parties must be afforded an opportunity to comment if the arbitral tribunal considers application of legal rules, principles, sources or arguments, to which the parties have not referred. This deference to a discretionary power of the arbitral tribunal and the parties’ right to be heard on points of law is also supported in other key sources of international arbitration law.

This thesis suggests that the principles based on commonalities in the examined jurisdictions should also be applied in international arbitral procedure in Sweden. Consequently, jura novit curia, as it is understood in Swedish civil litigation, should not be applied in international commercial arbitration.