Reflections from SCC Arbitration Week 2025
THE AUTHOR:
Lachlan Gibbs, LL.M. Candidate at Stockholm University
The SCC Arbitration Institute (“SCC”) concluded the 2025 edition of SCC Arbitration Week with a roundtable discussion titled “M&A × SCC: Turning Discord into Accord.” The discussion featured Johan Fagerlund, CEO of Mervida, Carl Persson, Partner at Roschier, and Isabella Ramsay, Partner at Mannheimer Swartling, and was moderated by Jake Lowther, Specialist Counsel at the SCC.
Business transaction or “M&A” disputes have become a topical issue within the arbitration community. In recent years, the SCC has observed a steady increase in the number of post-M&A disputes it administers. This roundtable provided an opportunity to discuss the trend with experienced practitioners from both ends of a transaction and explore both the causes behind the rise and the tools available to manage these disputes effectively.
The Increase in M&A Disputes
Lowther opened the discussion by sharing the SCC’s observations on the growing number of post-M&A disputes. In 2024 alone, 57 such disputes were filed with the SCC, making them the single most frequent category of new cases. To put this in context, in 2024, the SCC administered a total of 204 cases. These disputes represented a total value of EUR 5 billion (out of a total amount in dispute in 2024 of EUR 15.5 billion), with an average duration of 209 days from referral of the case to the tribunal to the final award (compared to an average of 267 days in 2019), and 93 days under the expedited rules. These disputes are therefore of significant value but are being resolved more quickly.
While these figures demonstrate both the increase in M&A-related disputes and the efficiency of proceedings under the SCC Rules, they do not reveal the underlying causes behind the trend. Understanding these causes is essential, as the heightened arbitration risk following M&A transactions has prompted both counsel and businesses to reflect on what is driving this rise.
Why Has There Been a Rise in Post-M&A Disputes?
The possible reasons for this increase are multifaceted. It cannot be attributed simply to poor due diligence or failures to comply with Share Purchase Agreements (“SPAs”). Rather, the trend reflects an interplay of factors such as the internationalisation of the Swedish private equity market, the effects of COVID-19 on the market, and the large amounts at stake in M&A disputes.
Internationalisation of the Swedish Private Equity Market
According to the SCC statistics, there has been an increase in (M&A) cases seated abroad, and governed by foreign laws. Although the speakers had not witnessed this trend firsthand, they had noted a shift in the Swedish market’s approach to pursuing arbitration, driven largely by the internationalisation of the private equity sector. Persson explained that, in the past, Swedish businesses were reluctant to initiate M&A disputes out of fear of being perceived as overly litigious within what was once a relatively insular market.
However, as foreign investors and international funds have become more active, reputational concerns have diminished, and Swedish businesses have become more open to pursuing formal dispute resolution. Persson also observed that Sweden’s maturing private equity market is beginning to mirror more litigious jurisdictions, such as the UK and the US. However, Ramsay noted that reputational concerns remain, especially in Sweden.
Impacts of COVID-19 on the Market
Fagerlund highlighted that the post-COVID-19 environment has introduced greater commercial uncertainty. Prior to the pandemic, acquiring a company could still yield a positive outcome even if performance did not meet pre-acquisition expectations. With heightened financial risks, parties are increasingly inclined to pursue litigation or arbitration to recover losses when transactions fail to meet expectations.
Losses
In the context of M&A disputes, the issue of losses presents an added layer of complexity due to the somewhat unclear definition of what constitutes a “loss”. Persson observed an increasing trend for claimants to seek not only direct losses arising from the SPA, but also indirect, reasonably foreseeable losses. Despite the lack of clarity regarding what constitutes a reasonably foreseeable loss, this broader scope has contributed to a rise in M&A disputes.
Persson further noted that while Swedish law firms generally maintain a uniform approach to defining “loss” within SPAs, uncertainty remains. However, this issue is currently being addressed by a group of practitioners who meet regularly with the aim of preparing guidelines regarding the prevailing terminology and definitions in SPAs, including with respect to losses.
What to Avoid in an M&A Agreement?
The question of earn-outs, whether to use and what the alternative is, dominated parts of the discussion. According to Persson, the most common issue leading to earn-out disputes is unclear SPA terms, allowing buyers to adjust accounting and reduce payouts. Disputes often arise from a disconnect between financial advisors and M&A lawyers. Unforeseen events (like COVID-19) can also affect performance metrics and lead to disputes.
From Ramsay’s perspective, earn-outs are usually the most complex for parties to agree on. Moreover, the seller’s lack of real control during the earn-out period leads to frustration and disputes. An alternative path is for the parties to reach a clear agreement on the parameters (turnover may be preferable to EBITDA), conduct proper due diligence, and include seller protections, such as limitations on buyer actions or adjustment principles.
The Importance of a Well-Drafted Dispute Resolution Clause
Given the rise in M&A disputes, the speakers emphasised the importance of including a well drafted dispute resolution clause in SPAs. For Fagerlund, arbitration is in general the familiar and therefore preferred forum, highlighting its expediency and procedural efficiency in resolving M&A matters. Indeed, merely including an arbitration clause can discourage the initiation of a dispute. It forces the parties to “think twice”.
Ramsay and Persson cautioned against the common practice of “trading off” clauses during SPA negotiations, where one party secures favourable drafting on one clause in exchange for concessions elsewhere. When applied to dispute resolution provisions, this can lead to inadequate or risky clauses that disadvantage parties once a dispute arises.
The panellists recommended adopting the appropriate SCC dispute resolution clause and consulting experienced dispute resolution counsel before agreeing to any modifications. This approach can prevent costly procedural complications down the line.
Alternative SCC Mechanisms to Resolve M&A Disputes
To round off the event, the discussion turned to the tools available through the SCC that can facilitate the swift and effective resolution of disputes, including in the post-M&A space.
Valuation Experts
The first mechanism discussed was the appointment of an independent valuation expert. Persson noted that at the outset of an arbitration, parties often struggle to agree on the value of the subject matter in dispute. An independent expert can provide an impartial assessment, bringing clarity to a potentially contentious issue early in the process.
Lowther highlighted that the SCC has provided updated guidance on the appointment process and a model clause for appointing such an expert. It can be an effective tool, and both parties and their counsel should give serious consideration to including it within their SPAs, alongside an arbitration clause.
SCC Express Dispute Assessment
Another mechanism available is the SCC Express Dispute Assessment (“SCC Express”), a consent-based, expedited, non-binding evaluation of a dispute for a fixed fee provided within 21 days. Persson emphasised that SCC Express’s streamlined procedure and short timetable make it an attractive option for less complex disputes, particularly in respect to contractual interpretation. However, it may be less appropriate in quantum-heavy disputes.
Conclusion
The roundtable shed light on the growing number of M&A disputes, driven by the internationalisation of the private equity market and post-pandemic economic pressures.
In light of this heightened arbitration risk, businesses and counsel should exercise due care when preparing SPAs, ensuring the inclusion of a well-drafted arbitration clause and considering whether to include a valuation expert clause or, for simpler matters, to utilise the SCC Express procedure for a swift and efficient resolution.
ABOUT THE AUTHOR
Lachlan Gibbs is an Australian-qualified lawyer with a background in dispute resolution, specialising in employment and workplace safety. He is currently based in Stockholm where he is completing his LL.M. in International Commercial Arbitration at Stockholm University.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
