M.B.: And when you were discussing the optional clause which the Americans back in the ’70s. If not Sweden, where would it have been? What other alternatives to Sweden where you discussing with the Americans?
S.L.: Well, I remember, I mentioned Howard Holtzmann. Unfortunately he died recently. He was my good colleague in the field of arbitration. And we discussed various propositions and opportunities. I said: “Okay, let us provide for arbitration in Budapest, in Hungary.” And he said: “No, it might be difficult, let’s provide arbitration in Vienna.” “No, let’s provide for arbitration in Sofia, in Bulgaria, or let’s provide for arbitration in Beijing,” and proposing such ideas, we understood that it would not be acceptable for the other party. So finally we came to Stockholm. But you know, I said that earlier, the difficulty was East-West. Very difficult situation politically, economically, culturally and so on, but nowadays, I hope you receive such a bulletin, which is called GAR. General Arbitration Review. They send it to me, and I hope they send it to arbitration institute and other, and they provide their information developments of international arbitration. Just very short, very short. And then, if you need more information you had to apply to them, and they will give you more information. And recently, just maybe a week ago, I received it, they send many such bulletins, and recently I found an interesting notice there, that Rosneft, that is a famous Russian company for oil transactions, said that “Nowadays, let us not agree for arbitration in countries which apply sanctions, economic sanctions against Russia. Let’s not agree for arbitration in these countries.” What to do, there is no proposition, but that is an interesting notice. Understanding that in such countries there may be some effect on impartiality of arbitrators in this respect. And so it is an important factor. We have arbitration for Russian-American contracts in Stockholm, but as to other contracts, it is important nowadays for lawyers working in certain companies to decide how to agree about arbitration at this moment. I hope the situation will change, but nowadays there is a new aspect in development of arbitration. It has been published so in that bulletin.
M.B.: How would you describe the role of Swedish arbitration in Russia today? Given that perspective.
S.L.: It is important, what is the feeling of Russian companies, who are involved in arbitration proceedings, in actual arbitration proceedings in Sweden. If there is dissatisfaction for some awards, I understand, I said of course, that here may be dissatisfaction. If I lost the case, surely I’m not satisfied. But that is not a decisive factor. Whether the award which I don’t like has been adopted according to the rules and so on, I have nothing to do. It was some fault during the performance of the contract. But if there is some ignorance of important factors when the award was made by the arbitrators, then there is another case, and if it happens once it might be not so important, but if it happens several times with different companies, then there is dissatisfaction. Dissatisfaction on the side of the Russian company or on the side of the companies from other countries who participated in that arbitration. That is an important factor. I cannot tell you exactly what is the situation right now, but it is important. I also received an information in that GAR bulletin, that recently, a Swedish award, of the Swedish arbitration institute award, has been enforced in Belarus. And I know about that case, it was a very difficult case, but nevertheless, the court of Belarus agreed to enforce that Swedish award. That is important, even Belarus party was not satisfied with that award. Nevertheless, the court had agreed to enforce that award. Maybe it will be challenged in the next judicial instance, I don’t know, but at this time, this award has been enforced.
M.B.: May I ask about China? Did you recommend Sweden as a place for arbitration to China as well? After you had decided upon Stockholm?
S.L.: I don’t remember exactly what negotiations we had with the Chinese colleagues at that time. Maybe it was important that we made such an agreement with American Arbitration Association, yes, but we published many information about that agreement with Americans and it was influential for other countries at that time. I was an arbitrator in China, in Beijing, and it was interesting, it was a dispute between a Greek company and a Chinese company and the Greek company appointed me as arbitrator in that case. And I did not know that Greek company, never met them before, and during coffee break, I asked the lawyers from the Greek company, why they decided to choose me as arbitrator in that case, to which I had no relationship, and so on. And the answer was very interesting. They told me, I’m on the list of arbitrators in Chinese arbitration court, and a Greek lawyer told me “You know why? We looked through the list of arbitrators, and you were the only one from the country where the religion is good for us.” All of a sudden, of course, yeah, that was the reason why they used me. Not because I am an expert, no, that was of second importance. The first importance was orthodox religion, that was the most important for them.
M.B.: From your perspective, what were the most important elements of the optional clause agreement? What were the most important elements and what role has it played for international trade?
S.L.: There is a possibility to choose arbitrators in that case, to have arbitration in a certain place. That is an important element of each arbitration agreement. And so, the difficulty, when we consider that clause, the possibility was that if there was a contract between Soviet and American parties, what our company propose with regard to arbitration: “Let’s go to Moscow. Let’s have arbitration in Moscow.” And what American party says: “No, let’s have arbitration in New York, according to the rules of American Arbitration Association.” “Okay,” they say, “Let’s go to London.” “Oh, no, no, no, London and American law and practice are almost the same,” say our companies. “Let’s go to Bulgaria. Oh, you don’t like Bulgaria, let’s go to Hungarian Arbitration.” “Oh, no, let’s go to Vienna Arbitration,” and so on. What to do? It was a very difficult situation. And now there is a clause which is recommended by the Russian Chamber of Commerce on the one side, and the American Arbitration Association in the other side, and approved by the Swedish Arbitration Institute. So it is a good clause. So it is very good for you, for the parties. Put that into the contract. And it is very good, it is not something that the clause is very important by itself, it is just the possibility for the parties to resolve dispute, which is so obvious and very difficult to overcome. “Why,” Soviet company says, “Why we should go to New York?”. And the Americans say: “Why we should go to Moscow? No.” And how to overcome it. And it is a good instrument. So that was the most important reason why that clause was important. But otherwise it is done very well, and it is acceptable for both parties.
S.L.: I remember another arbitrator with whom we had arbitration for, I believe, 3 days. He came to our place of arbitration, said “Hello, hello, good morning, good morning,” and closed his eyes. And during the lunch time, he opened his eyes and we had lunch together. Then we resumed arbitration, he closed his eyes till the evening. And in the evening, he said “Thank you, thank you, thank you.” I cannot immediately recall his name. It was long ago. <…>
M.B.: We were talking about Gunnar Lagergren, Mr. Gunnar Lagergren. Can you recall any memories of him? Would you be willing to share them with us?
S.L.: Well, it was long ago that we had arbitration with him, but he was the presiding arbitrator. He was very, very quiet and we had some discussion, me and American co-arbitrator, and he was listening, listening, listening to us, and it was actually the arbitration according to the optional clause. American arbitrator, me, and he as presiding arbitrator in Stockholm, in his office. I remember his office. And he was hearing us, he was hearing us, and finally he did not propose any award when we finished the proceedings. And he said “I’ll send you my proposals how this dispute should be resolved.” Of course, we were not particularly satisfied,