Proposed New Swedish Standard Contracts for Construction Projects: Revised Rules for Dispute Resolution

Introduction

For many years, AB?04 and ABT?06 have been the cornerstone standard contracts for construction projects in Sweden. The agreements have been in force for two decades and are now undergoing significant revisions by the Construction Contracts Committee (Sw.?Byggandets Kontraktskommitté, “BKK”). A consultation process began in October 2024 for the new standard agreements, AB?25 and ABPU?25, which are expected to be finalized by the summer of 2025. The proposed agreements are available in Swedish on the BKK website: https://byggtjanst.se/remiss/allmanna-bestammelser.

The two agreements have been extensively revised. Among the substantial changes are those to the dispute resolution rules. The key changes involve the procedure for simplified dispute resolution and a large increase of the monetary threshold that determines whether a dispute should be resolved in court or by arbitration.

New Rules for Simplified Dispute Resolution

The procedure for simplified dispute resolution is prescribed in Chapter 11, 3–12 §§ of the proposed agreements and in separate rules for simplified dispute resolution by BKK (Sw.?BKK:s regler f?r f?renklad tvistel?sning). A draft of these rules was published in December 2024 by BKK: https://byggtjanstcms.byggtjanst.se/globalassets/remiss/bkks-regler-for-forenklad-tvistelosning.pdf.

Under the current standard agreements, simplified dispute resolution requires a mutual agreement on both the procedure and the choice of adjudicator (Sw.?skiljeperson). Simplified resolution is rarely used due to the difficulty in reaching such agreements. The new proposed agreements, however, allow a party to unilaterally request simplified dispute resolution.

The procedure is initiated when a party files a request for simplified dispute resolution to the opposing party. The draft rules for simplified dispute resolution prescribe what the request should include – among other things, preliminary claims and information on the circumstances and evidence relied upon, and a proposal for an adjudicator. Within seven days the opposing party must respond to the request.

If the parties cannot agree on the choice of adjudicator, the adjudicator will be appointed by BKK. The simplified resolution procedure shall be discontinued if a party initiates legal proceedings in court or arbitration. The proposed changes, thus, reduce the dependency on mutual agreement and will, thereby, potentially increase the use of simplified dispute resolution in the future.

Once the adjudicator is appointed, a preparatory meeting is held to clarify the dispute and plan the procedure. Each party should then submit one written statement each – the requesting party within a week from the meeting and the counterparty within two weeks thereafter. The adjudicator should then issue a decision in the dispute within ten days, or longer if there are exceptional reasons.

The simplified dispute resolution process is, thus, designed to be swift, with few written exchanges and no oral hearings. Testimonies of witnesses and experts shall be given in writing, according to the separate rules on simplified dispute resolution. Extensions to the process, additional written exchanges or oral hearings are permitted only under special circumstances. Simplified resolution is, therefore, mainly suitable in smaller disputes with limited evidence, although it may be used also in larger disputes. It could, for example, be employed to promptly resolve issues that arise during longer construction projects.

A decision by the adjudicator in a simplified dispute resolution process is not enforceable. However, it is contractually binding, unless a party files an objection within 30?days of the decision and subsequently a court or arbitral tribunal decides to overrule the decision.

Increased Monetary Threshold for Arbitration

Another major change is the substantial increase in the monetary threshold that determines whether a dispute should be resolved in general court or by arbitration. The threshold is, currently, 150?price base amounts (an indexed value adjusted annually based on Sweden’s inflation rate), equivalent to approximately SEK 8.8?million for 2025. The new agreements propose raising the threshold to 500?price base amounts, or approximately SEK 29.4?million, see Chapter?11,?13 § of the agreements.

This substantial increase will likely result in a greater proportion of construction disputes being handled by general courts in the future. Given the already heavy workload of Swedish courts, this raises concerns about the appropriateness of such a revision.

Ad Hoc Arbitration is Still Prescribed

Arbitration under the proposed agreements will still be ad hoc, in accordance with the provisions of the Swedish Arbitration Act, unless the parties agree otherwise. The SCC Arbitration Institute (“SCC”) has observed that resolving construction disputes in Sweden through ad hoc arbitration is generally more expensive and generally takes longer time than an arbitration under the SCC Rules (see the report “SCC 2023 Analytics Ad hoc vs. Institutional Arbitration in Construction Disputes”). It could be noted that institutional arbitration (ICC?Arbitration) is used under the FIDIC rules.