Distribution Contracts and Arbitration How to deal with small agency and distribution disputes Marie Öhrström Assistant Secretary General www.sccinstitute.com

SCC Established in 1917 International activities since 1960’s Rapid increase since 1990 (in particular east-west arbitration) About 140 new cases a year The annual caseload involve parties from more than 30 countries Subject matters; Corporate (JV, shareholders agreements, mergers & acquisitions etc), sales of goods, licensing agreements, construction, employment, investment treaties, agency & distributorship, etc www.sccinstitute.com

SCC Rules Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (2007) Rules for Expedited Arbitrations (2007) Insurance Arbitration Rules (2007) Procedures and Services offered by the SCC Institute when applying the UNCITRAL Arbitration Rules (1999) Mediation Rules (1999) www.sccinstitute.com

Organization of the SCC Board (12 directors Swedish and foreign) General Editor Stockholm International Arbitration Review Mediation Institute of the Stockholm Chamber of Commerce Secretary General Assistant Secretary General Webmaster Division I Legal counsel Assistant Division II Legal counsel Assistant Division III Legal counsel Assistant www.sccinstitute.com

Claimant files its Request for Arbitration, appoints an arbitrator and provides the Registration Fee SCC Respondent submits its Answer to the Request for Arbitration and appoints an arbitrator SCC appoints a Chairperson and determines the Advance on Costs Claimant provides its part of the Advance on Costs Respondent provides its part of the Advance on Costs SCC refers the case to the Arbitral Tribunal Claimant submits its Statement of Claim The Arbitral Tribunal Respondent submits its Statement of Defence The Arbitral Tribunal summons the Parties to a Hearing The Arbitral Tribunal renders an Award www.sccinstitute.com

Agency and Distributorship at the SCC About 30 cases since 2003 60 per cent under the SCC Rules, 30 per cent under the SCC Expedited Rules and 10 per cent ad hoc arbitrations. 45 per cent were international and 55 per cent domestic cases. Frequent origins of the parties: Scandinavia, Germany, Italy, USA, Canada, Russia, Belarus and Bulgaria. The amount in dispute varies from: EUR 13 400 to EUR 3 600 000. www.sccinstitute.com

SCC Rules for Expedited Arbitrations Primarily recommended for minor disputes where the parties desire a speedy and inexpensive procedure The parties themselves, in the arbitration agreement, choose which set of SCC rules they wish to apply Adopted in 1995 (last revision 2007) Today 35 per cent of the SCC caseload are expedited arbitrations - increasing About a third of the expedited arbitrations involve at least one foreign party The arbitration costs are based on the amount in dispute - i.e. the same system as under the SCC Rules www.sccinstitute.com

The Salient Features of the SCC Rules for Expedited Arbitrations A sole arbitrator (Under the main SCC Rules there is three or one arbitrator) Award within three months (Under the main SCC Rules the period of time is six months) Two brief written statements only, to be submitted within a period of ten days Reasoned award if requested by a party Hearing only if requested by a party and if deemed necessary by the arbitrator www.sccinstitute.com

Recommended SCC arbitration clause for agency and distribution contracts Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration by the Arbitration Institute of the Stockholm Chamber of Commerce (the SCC). The Rules for Expedited Arbitrations of the Arbitration Institute of the Stockholm Chamber of Commerce shall apply, unless the SCC, taking into account the complexity of the case, the amount in dispute and other circumstances, determines, in its discretion, that the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce shall apply. In the latter case, the SCC shall also decide whether the arbitral tribunal shall be composed of one or three arbitrators. The seat of arbitration shall be .......................... The language to be used in the arbitral proceedings shall be ......................... This contract shall be governed by the substantive law of ................……....... www.sccinstitute.com

Arbitration Costs – An example Amount in dispute: EUR 100 000 SCC Rules with three arbitrators: EUR 20 000 (Chairperson: 7 500, Co-arbitrators 4 500, SCC 3 500) SCC Rules with a sole arbitrator: EUR 11 000 (Arbitrator: 7 500, SCC 3 500) SCC Expedited Rules: EUR 7 500 (Arbitrator: 5 000, SCC 2 500) www.sccinstitute.com

www.sccinstitute.com Inter alia SCC Arbitration Rules SCC Rules for Expedited Arbitrations SCC Model Arbitration Clauses General information on arbitration and the SCC procedure Articles, laws and conventions www.sccinstitute.com