Dispute Resolution | Supreme Court rulings rendered during the second and third quarter of 2026

T 1102-25, 2026-09-22 (Sigmas rättegångskostnader)

The Supreme Court has issued a ruling clarifying how the costs of litigation should be allocated between the parties where a claim has been upheld only in part.

The dispute arose from a procurement conducted by a Swedish municipality. Following the award, an unsuccessful bidder challenged the procurement, and the municipality subsequently extended its existing agreement with the previous supplier without conducting a new procurement. The claimant company, which was awarded the procurement, brought proceedings against the municipality, alleging that the extension constituted an unlawful direct award, and sought damages of approx. SEK 7 million.

Both the District Court and the Court of Appeal found that the municipality had carried out an unlawful direct award and awarded the claimant damages of SEK 300,000 and SEK 500,000, respectively, determined on a discretionary basis. Regarding litigation costs, the District Court held that the claimant had prevailed on the main issue and ordered the municipality to reimburse two-thirds of the claimant’s litigation costs. The Court of Appeal, however, held that since the claimant had succeeded with only around seven percent of the amount claimed, it was not entitled to any cost recovery and instead ordered the claimant to bear the municipality’s costs in full for both instances.

The Supreme Court granted leave to appeal on the question of cost allocation where a claim is upheld only in part, governed under Chapter 18, Section 4 of the Code of Judicial Procedure (Sw. rättegångsbalken (1942:740)). The Supreme Court clarified that where the litigation costs cannot be attributable to different parts of a case, as in the present case, liability for costs is to be apportioned on the basis of an assessment of the parties’ overall success in the proceedings as a whole. The Court held that in cases concerning primarily the amount of a claim, the outcome of that claim may often be decisive for this assessment. Where proceedings have instead concerned a number of different issues, the assessment must also take into account where the focus of the litigation has lain.

The Supreme Court found that the claimant was the substantially prevailing party overall, despite having ultimately recovered only a fraction of the amount claimed, based on the claimant having prevailed in both instances on the core questions of whether the municipality had committed a procurement infringement and was liable in damages, which had taken up significant scope in the proceedings. The claimant was therefore relieved of its obligation to reimburse the municipality’s litigation costs in the District Court and Court of Appeal, and the municipality was instead ordered to reimburse one quarter of the claimant’s costs in those instances, and half of its costs in the Supreme Court.

The decision provides useful guidance on how the overall outcome of a case weighs against where the real substance of the dispute lay concerning the allocation of litigation costs following only partial success, particularly in cases where the amount ultimately awarded departs significantly from the amount claimed. Hence, success on a claim as to liability may be given weight in the allocation of cost even where the amount ultimately awarded is considerably lower than the amount claimed.

T 2545-25, 2026-09-09 (Bilbranden i Malmö)

The Supreme Court has clarified the conditions under which an insurer may refuse to pay out insurance compensation on the ground that doing so would expose its employees to criminal liability for money laundering in the course of business (Sw. näringspenningtvätt) under Section 7 of the Act on Penalties for Money Laundering Offences (Sw. lag (2014:307) om straff för penningtvättsbrott).

The case concerned a private individual’s insurance claim following the destruction of his car in a fire, which was insured against fire caused by a third party. Although it was undisputed that an insured event had occurred, the insurer refused to pay compensation. The insured sought payment of his insurance claim. The insurer argued that the policyholder’s claim could reasonably be assumed to have been made for the purpose of money laundering, and that paying the compensation could therefore expose its employees to criminal liability for participation in money laundering.

The District Court found no sufficiently qualified circumstances to reasonably assume a money laundering purpose and awarded compensation. The Court of Appeal reversed, holding that the insurer had established qualified circumstances sufficient to show that payment would reasonably be assumed to serve a money laundering purpose, relieving the insurer of its payment obligation.

The Supreme Court reiterated that there is a general principle that no one is obliged to perform a contractual obligation if doing so would constitute a criminal offence. The Supreme Court noted that liability for money laundering in the course of business merely requires that the actor, objectively assessed from their position, culpably takes the risk of participating in a transaction that can reasonably be assumed to have a money laundering purpose.

Weighing the facts cited by the insurer, the Supreme Court concluded that, viewed objectively from the insurer’s position, the circumstances were sufficiently qualified that paying out would constitute a culpable risk-taking of which the insurer’s claims-handling staff must have been aware. The Supreme Court therefore held that the insurer had shown that payment would risk exposing its employees to liability for money laundering in the course of business and was accordingly not obliged to pay, upholding the Court of Appeal’s judgment.

The ruling confirms that the money laundering defence to a payment claim is not confined to the narrow circumstances of the specific payout transaction, but may draw on the broader context in which the insured event occurred, even where the insurer does not dispute that an insured event took place. It also confirms that the burden of proof regarding the circumstances entitling an insurer to withhold payment on this basis should lie with the insurer, to the ordinary civil standard, and that the relevant intent is that of the insurer’s own staff rather than the policyholder’s.

T 8184-24, 2026-08-21 (Den rostskadade anläggningen)

The Supreme Court has clarified whether, and under what conditions, repair costs may be used to calculate damages for cargo damage under Chapter 13, Section 29 of the Maritime Code (Sw. sjölagen (1994:1009)). The provision provides that damages for lost or damaged goods are to be calculated with reference to the value of goods of the same kind at the place and time of discharge, determined by exchange price, market price or, failing that, the going value of goods of the same kind and quality.

The case concerned rust damage, repaired at a cost of approx. USD 197 thousand, sustained during a combined road and sea carriage of a newly manufactured bespoke industrial plant from Sweden to a factory in the US, performed by the carrier under a contract with the manufacturer. The manufacturer’s insurer compensated the loss under a cargo insurance policy and thereby acquired the claim against the carrier by subrogation.

The District Court held that repair cost could form the basis for the damages calculation under Chapter 13, Section 29, as it could be excluded that the repair cost exceeded the market value or the cost of a newly manufactured replacement, and awarded damages accordingly. The Court of Appeal, however, held that it was not possible to assess the value of the damage in the manner prescribed by the Maritime Code, as it had not been established what the goods would have been worth had they remained undamaged. Leave to appeal was granted on the question of how damages should be calculated under the provision.

The Supreme Court construed the provision, deriving from an international convention, in conformity with the underlying Hague-Visby Rules. Contrary to the Court of Appeal’s reasoning, the Supreme Court then confirmed that the provision is a valuation rule rather than a limitation of liability rule, and that its valuation criteria are non-exhaustive. The Court noted that other bases, such as purchase price and repair cost, have been accepted where the specified criteria could not be established, and that repair cost is a recognised proxy for diminution in value under general Swedish tort law. On this basis, the Supreme Court held that repair cost may be taken into account under Chapter 13, Section 29, subject always to the circumstances of the individual case and the principle of “normal interest” (Sw. normalintresset), i.e. any individual interest of the particular cargo owner should not be considered. The Court also clarified that the valuation is ultimately a legal assessment for the court based on the evidence adduced.

The Supreme Court found that the damaged component could not readily be traded on an open market (i.e. the specified valuation criteria could not be established) and instead relied upon invoices and a survey report submitted by the insurance company showing costs directly linked to and necessary for the repair. The Court concluded that repairing rust damage to an industrial plant fell within the normal interest, that the repair cost was proportionate to the industrial plant’s value, and that it was excluded that the cost exceeded the cost of a newly manufactured replacement. Damages were accordingly assessed at approx. USD 197 thousand. The Supreme Court then granted leave to appeal on the remaining issues, set aside the Court of Appeal’s judgment, and remitted the case, including costs, for further proceedings.

The ruling provides clarity for parties handling cargo claims under Swedish and, by extension, Hague-Visby Rules-based maritime law: under certain conditions, repair cost is a legitimate and often necessary basis for calculating cargo damage, particularly where bespoke or specialised goods make market valuation impracticable. It also highlights the importance of securing proper documentation relating to the damage and the repair works, to substantiate the necessity and fairness of claimed repair costs.

T 8371-24, 2026-07-09 (Innovationen)

The Supreme Court has clarified the allocation of the burden of proof and the applicable standard of proof for the circumstances underlying a hypothetical course of events in a contractual damages claim.

The case concerned a tenant-owner association which had agreed to transfer a cooperative apartment to a buyer couple for SEK 8,880,000, of which SEK 888,000 was paid in advance. When the buyers withdrew, the parties entered into a rescission agreement under which the association would resell the apartment on market terms, with the buyers liable for any shortfall and certain costs and entitled to repayment of the advance less any shortfall. The association had already agreed to sell the apartment to a property company at the same price, payable on possession, but let the company take possession without payment. The company later resold the apartment for SEK 8,000,000 before its parent was declared bankrupt.

The buyers sought repayment of the advance, arguing that, inter alia, the association had breached the rescission agreement by not conducting the transaction with the company on market terms. The District Court found a breach but held that causation had not been proven; the Court of Appeal agreed on the breach but lowered the standard of proof in light of the buyers’ evidentiary difficulties and upheld the claim in part.

The Supreme Court found that the association, by allowing the property company to take possession without payment, had failed to conduct the transaction on market terms and so was in breach of the rescission agreement, entitling the buyers to their positive contractual interest, which is typically assessed by comparing the actual course of events with the probable hypothetical one. The Court noted that it is for the court to determine the probable hypothetical course of events, but the underlying circumstances it rests on must be proven by the parties. The key disputed circumstance was the company’s solvency at the time of possession. Although the association’s own conduct had deprived the buyers of the chance to secure evidence of this, the Supreme Court held that the burden of proof should remain with the buyers, in the interest of consistent allocation, but lowered the standard of proof. On that standard, and applying a presumption of rational behaviour, the Court found it sufficiently probable that the company could and would have paid in full had the association not allowed possession without payment, causing the buyers a loss of SEK 888,000, and the Court of Appeal’s judgment was upheld.

The ruling provides clarity on the distinction between the evidentiary question (the underlying circumstances) and the evaluative question of the probable hypothetical course of events, which is for the court to determine applying a presumption of rational behaviour. Practically, the ruling also shows that evidentiary difficulties caused by the counterparty’s own conduct tend to lower the standard of proof rather than shift the burden of proof itself, though the outcome reflects a case-specific balancing exercise.

T 2273-25, 2026-07-03 (Konkursgäldenärens betalning)

The Supreme Court has clarified when a payment made by a third party on behalf of a bankrupt debtor must be regarded as a disposal by the debtor of assets belonging to the bankruptcy estate in breach of the prohibition on dispositions under Chapter 3, Section 1 of the Bankruptcy Act (Sw. konkurslagen (1987:672)).

The debtor owned a property, later transferred to his wife, that had been pledged as security for two credit facilities with a bank totalling SEK 18.75 million. By the time the bank declared the credits due for immediate payment, the debtor, who remained liable for the credits, had been declared bankrupt. In a settlement agreement between the spouses and the bank, the debtor undertook to pay SEK 18.9 million to the bank, which would then release the mortgage deeds on the property. Funds originating from a shelf company were transferred to the spouses’ lawyer’s client funds account, from which payment was made to the bank’s account the following day.

The bankruptcy estate brought proceedings against the bank, arguing that the funds used for the payment had in substance accrued to the debtor and that he had consequently disposed of them in breach of the prohibition on dispositions under the Bankruptcy Act, and that the payment should therefore be reversed. Both the District Court and the Court of Appeal dismissed the estate’s claim.

The case concerned whether the payment to the bank was made under circumstances such that the funds should be regarded as belonging to the bankruptcy estate. The determinative question was whether the obligation had been discharged by a third party or whether the payment was instead to be regarded as having been made with funds that the debtor had disposed of. The Supreme Court carried out an overall assessment, with particular weight given to the purpose of the payment and the way it was carried out, the decisive factor being the true substance of the payment.

The Supreme Court found that the payment should be attributed to the debtor and that the funds had accrued to him, in the sense intended under the Bankruptcy Act, at the latest when the payment from the client funds account was executed. In its reasoning, the Court took into account that the debtor and his wife had a strong personal interest in the payment being made since the property would otherwise risk being subject to enforcement, that payment was made from the client account in accordance with the specifications in the settlement agreement and using funds transferred from a third party with no evident business interest in fulfilling the debtor’s undertaking, and that the payment can be traced back to the debtor’s obligations under the settlement agreement, which in turn corresponded to his debt under the credit facilities with the bank. Further, the Supreme Court held that, by instructing the bank in the settlement agreement to apply the incoming funds to discharge his credits, the debtor had, once the funds were in fact so used, disposed of them. This was contrary to the prohibition in the Bankruptcy Act, rendering the payment invalid and requiring it to be reversed. The Supreme Court therefore overturned the Court of Appeal’s judgment.

The ruling confirms that a debtor is regarded as having disposed of funds whenever someone carries out a payment instruction for the debtor, even through several intermediary transactions and absent a direct transfer to the creditor. Attribution turns on substance over form: the overall arrangement and purpose, not the formal identity of the paying party. A key takeaway is that showing the third party had its own business interest in making the payment – rather than merely acting for the debtor – can help avoid the funds being attributed to the debtor.

T 9574-25, 2026-07-01 (Rena Sitsen)

In a ruling on service of notices of termination on corporate tenants, the Supreme Court has clarified how a legal person’s domicile is determined under the simplified service procedure in Chapter 8, Section 8, third paragraph of the Land Code (Sw. jordabalken (1970:994)).

The provision allows a notice to be sent by registered letter to the usual address of the person sought where that person cannot be found at their domicile, together with a copy delivered either to an adult household member or, if the person operates a business with a fixed office, to an employee there, or otherwise left in the person’s letterbox.

The case concerned a lease of premises at Stockholm Central Station used by the tenant to operate a pay-per-use toilet and shower facility. The landlord served a notice of termination for variation of terms by handing a copy to an employee at the premises and sending it by registered letter to the tenant’s registered and notified address. The landlord sought, inter alia, an order for immediate vacation, arguing that service had been validly effected. The District Court dismissed the claim, but the Court of Appeal found service valid and ruled for the landlord.

The Supreme Court confirmed that, although drafted for natural persons, the provision also applies to legal persons and that the “person sought” refers to the legal person itself rather than its representative, meaning that “domicile” and “usual address” must be assessed by reference to the legal person. The majority found the tenant’s station premises, though not a designated head office, to be its domicile, since it permanently ran a substantial part of its business there and the premises were registered as its sole place of business; as no representative was found there, service could proceed under the special procedure. The registered box address was both the tenant’s registered and notified address and so constituted its usual address, and the delivery of notice to an employee acting as a form of manager of the premises satisfied the office-delivery requirement. The Supreme Court accordingly declared the tenant validly served and, finding no reason to grant leave to appeal on the remaining issues, left the Court of Appeal’s judgment standing.

Justice Sjöman, concurring with the majority, added that the simplified procedure must remain straightforward and hard to evade, and that the relevant test should consider circumstances observable to the landlord, distinct from stricter domicile concepts used for venue or private international law.

Justices Bäcklund and Renfors dissented, arguing by analogy with the venue rules in Chapter 10, Section 1 of the Code of Judicial Procedure (Sw. rättegångsbalken (1942:740)) that domicile should instead be the seat of the board or the place from which the business is administered, with the consequence that a company may sometimes have no domicile at all; and concluded that they would have held service invalid in the present case.

The decision provides that a location where a corporate tenant permanently carries on a substantial part of its actual business may qualify as its domicile for service purposes, even without formal registration as a head office, and that service of notice may be valid regardless of whether the tenant’s representatives ever receive the notice. The narrow majority and reasoned dissent nonetheless show that the concept remains debatable, leaving some uncertainty for cases with other circumstances.

T 9380-24, 2026-06-26 (MFN-klausulen och skiljeforumet)

The Supreme Court has clarified the scope of Most-Favoured-Nation (MFN) clauses in investment protection treaties, and specifically whether such a clause can extend to the choice of arbitral forum for resolving an investment dispute.

The case concerned an investor, who held both Georgian and British nationality, and who had commenced arbitration at the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), seeking to determine whether Georgia had complied with its obligations under an investment protection treaty with the UK. Under the treaty’s dispute resolution clause, disputes were to be resolved at the International Centre for Settlement of Investment Disputes (ICSID), but since the ICSID Convention bars a national of the host state from bringing ICSID proceedings against that state regardless of any other nationality held, the investor could not invoke that forum directly against Georgia. He nonetheless argued that he was entitled to have the dispute heard by a tribunal under the SCC Arbitration Institute, relying on the treaty’s MFN clause in combination with a dispute resolution clause in a separate investment protection treaty between Georgia and the Belgo-Luxemburg Economic Union (the comparator treaty), which grants investors the right to choose between arbitration at ICSID, the International Chamber of Commerce (ICC) in Paris, or the SCC Arbitration Institute.

The arbitral tribunal found that the investor qualified as a UK investor for purposes of the MFN clause and could invoke it to access the SCC Arbitration Institute, rejecting Georgia’s remaining jurisdictional objections. Georgia then sought the Court of Appeal’s review of that ruling under Section 2, second paragraph of the Swedish Arbitration Act (Sw. lag (1999:116) om skiljeförfarande). The Court of Appeal reached the opposite conclusion, holding that the MFN clause could not found jurisdiction for the tribunal, and on that basis determined that jurisdiction was lacking without going on to examine Georgia’s other objections.

Overturning the Court of Appeal’s conclusion, the Supreme Court focused primarily on the wording of the MFN clause and found that its express reference to the treaty’s dispute resolution article pointed clearly towards an intention to cover dispute resolution as such. On that basis, the Supreme Court held that the MFN clause applied to the dispute resolution article in its entirety, including the choice of arbitral institution. The Court also found that the ejusdem generis principle did not preclude this outcome, since both treaties referred to established arbitral dispute resolution mechanisms of the same general kind. Nor did this conflict with the requirement of state consent to arbitration, since Georgia could be taken to have given its unequivocal consent through the combined effect of the MFN clause and the comparator treaty’s dispute resolution clause.

Comparing the two treaties as a whole, the Supreme Court found the comparator treaty more favourable overall because it let the investor choose among several arbitral institutions rather than being confined to one, even though it also required a longer waiting period before arbitration could be commenced and offered no mediation option, concluding that the choice of forum outweighed those drawbacks.

The Supreme Court concluded that the investor was entitled to the more favourable treatment, but since the Court of Appeal had not yet examined whether the investor had met the comparator treaty’s own procedural conditions for commencing arbitration, that question was referred back to the Court of Appeal. The Supreme Court also granted leave to appeal on the remainder of the case, including Georgia’s other jurisdictional objections that the Court of Appeal had not examined.

For investors and states alike, the judgment is an important signal that MFN clauses may, depending on their wording, extend to procedural matters including the choice of arbitral forum, and not only to substantive treatment standards.