Browsing by Author "Tyynysniemi, Matti"

This Master’s Thesis is a study about setting aside arbitral awards on grounds that arise from the arbitral tribunal’s decision on the merits of the dispute. The topic is researched under Finnish law and the Finnish Arbitration Act. In Finland, arbitral awards cannot be appealed for alleged material errors in the decision on the merits of the case, but they can be challenged on the ground that there have been procedural defects in the arbitral proceedings. This study aims to identify situations where the arbitral tribunal’s decision on the merits of the dispute can create such procedural defects, or at least bring them to light. The study will also discuss the proper annulment threshold in such situations. The study can be classified as a study in legal dogmatics, as it is largely about determining the content of existing legal rules. International comparisons are made throughout, mostly to Sweden, but the focus is on domestic and international arbitrations seated in Finland and thus governed by the Finnish Arbitration Act. Alongside the Act itself, its travaux préparatoires (preparatory works) and the Supreme Court precedent KKO 2008:77 are major sources in this study. This study assumes arbitrations are conducted under the 2013 Arbitration Rules of the Arbitration Institute of the Finland Chamber of Commerce (FAI), so the FAI arbitration rules and their commentary provide additional sources. The study commences with an introduction. In the second chapter, it looks at the special characteristics of arbitration and at the limited judicial review of arbitral awards. It is discovered that from the four annulment grounds provided in Section 41 of the Finnish Arbitration Act, two can be triggered by the decision on the merits of the dispute. These two annulment grounds are excess of authority by the arbitral tribunal and the arbitral tribunal failing to provide a party with a sufficient opportunity to present its case. The third chapter investigates the conduct of arbitral proceedings from the viewpoint of the annulment ground assessed in the previous chapter. It is found that the procedural rules that can trigger those annulment grounds relate to the parties’ pleadings, to the arbitral tribunal’s actions, and to the possible interplay between these. Related rules regarding e.g. prayers for relief, factual allegations and legal arguments are discussed. The third chapter concludes with a look at the fact-invoking rules in Finnish civil procedure, and a discussion on whether they could be relevant for arbitration. The fourth chapter presents in detail KKO 2008:77, which is the only Supreme Court precedent to date that deals with the topic of this study. First, the attention is on the decision itself, from the arbitral award all the way to the Supreme Court. There is also a brief look at the expert opinions that some of Finland’s leading procedural law experts provided for the parties. Next, the study assesses how the precedent has been interpreted in legal literature and in Court of Appeal practice. At the end of chapter four, the author provides his own assessment of the meaning of the Supreme Court’s reasoning in KKO 2008:77. Chapter five reverts to the research questions posed in the introduction, and attempts to list situations where the arbitral tribunal’s decision on the merits of the dispute could trigger the annulment grounds in Section 41 of the Finnish Arbitration Act. Issues related to factual allegations and fact-finding are a major theme, as is the related question of whether the “burden of allegation” stipulated in Chapter 24:3 of the Code of Judicial Procedure is applicable to arbitration, and whether doctrine developed in connection with the said provision can be used in the context of arbitration. Other issues discussed include the question of whether founding an arbitral award on a legal consideration that comes as a surprise to the parties can constitute a ground for setting the award aside. The sixth and final chapter summarises some of the central findings and questions of the study. It also makes arguments and suggestions on the proper treatment of challenges that have close ties to the arbitrators’ decision on the merits of the dispute.