International entrepreneurs doing business in Sweden often enter into contracts for services, partnerships, or investments.
While most business relationships run smoothly, disagreements about payment, performance, or delivery can arise.
When that happens, it is important to understand how Swedish law handles contract disputes and what options foreign entrepreneurs have to resolve them effectively.
1. Determining Whether Swedish Law Applies
Before taking any legal steps, the first question is whether Swedish law governs the contract.
This depends on:
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The wording of the choice-of-law clause in the contract,
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Where the agreement was performed, or
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Where the parties or businesses are located.
Even if Swedish law is not explicitly chosen, it may still apply if the business activity was mainly conducted in Sweden.
A Swedish advokat (lawyer) can review the contract and advise on which country’s law and courts have jurisdiction.
2. Try Negotiation or Mediation First
Swedish legal culture encourages early negotiation and amicable settlements.
Before filing a claim, it is common for lawyers to exchange letters or propose mediation.
Benefits include:
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Lower costs,
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Faster outcomes, and
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Preservation of business relationships.
Many Swedish lawyers are trained in commercial mediation and can help facilitate dialogue between the parties.
3. Court or Arbitration – Two Main Avenues
If settlement is not possible, contract disputes in Sweden are usually resolved through either civil court proceedings or arbitration.
a. Civil court proceedings
Handled by the District Court (Tingsrätten), which is the first instance.
Proceedings are mostly in writing, and hearings can be attended remotely.
Appeals go to the Court of Appeal (Hovrätten).
b. Arbitration
If the contract includes an arbitration clause — for example, under the SCC (Stockholm Chamber of Commerce) — the dispute is handled privately.
Arbitration is faster, confidential, and widely recognised internationally under the New York Convention.
Your lawyer will help decide which path is appropriate based on your contract and goals.
4. Evidence and Documentation
Swedish courts rely heavily on written evidence.
Entrepreneurs should collect and preserve:
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The signed contract and any amendments,
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Invoices and receipts,
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Correspondence (emails, messages, letters), and
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Proof of performance or delivery.
Even informal communication may be used as evidence if it clarifies the parties’ intentions.
5. Hiring a Swedish Advokat
Foreign entrepreneurs can be represented by a Swedish Bar–registered lawyer (advokat).
An advokat is bound by strict professional and confidentiality rules and may act on behalf of clients before all Swedish courts and tribunals.
Representation can be authorised through a power of attorney (fullmakt), which can be signed electronically.
Physical presence in Sweden is not required.
6. Legal Costs and Advance Payment
Swedish lawyers typically charge hourly fees.
For foreign clients, it is common to pay an advance fee (retainer) before work begins.
If your business wins the case, the court may order the opposing party to reimburse reasonable legal costs.
All fee arrangements are set out in a written engagement letter before representation starts.
7. Enforcement of Judgments and Awards
Judgments from Swedish courts and arbitration awards can usually be enforced abroad under EU regulations or international treaties.
If the other party is located outside Sweden, your advokat can coordinate with local counsel to ensure recognition in that jurisdiction.
Summary
Foreign entrepreneurs can resolve contract disputes in Sweden through negotiation, mediation, court proceedings, or arbitration.
The process is transparent, document-based, and accessible even to non-residents.
With the help of a licensed Swedish advokat, disputes can be handled entirely from abroad — from initial consultation to enforcement.
