SCC’s consultation responses to BKK’s proposed new standard agreements in the Swedish construction industry
The SCC Arbitration Institute (SCC) has submitted its consultation responses to the Swedish Construction Contracts Committee (Sw. Byggandets Kontraktskommitté (BKK)) regarding its proposals to update and improve the standard agreements used in the Swedish construction industry. The BKK has proposed two new standard agreements, AB 25 and ABPU 25. These proposals are intended to address current challenges and incorporate best practices to ensure that the agreements remain relevant and effective. The proposals include updates to various sections, including dispute resolution, to better align with modern construction practices and legal standards.
Published
The SCC appreciates the extensive work BKK has put into developing these documents, which aim to enhance efficiency and clarity in construction contracts. The SCC shares BKK’s goal of creating cohesive provisions that promote healthy competition, high productivity, innovation, quality, and cost-effectiveness in the construction process, while being transparent, predictable, and user-friendly.
In its responses, the SCC provides suggestions for improving the dispute resolution chapters to ensure that AB 25 and ABPU 25 support a modern and cost-effective construction dispute resolution process. This process aims to reduce transaction costs, foster collaboration, and consider the unique aspects of construction law. The SCC’s response draws significantly from the SCC’s report, “SCC 2023 Analytics: Ad hoc vs. Institutional Arbitration in Construction Disputes” (available here) highlights the benefits of institutional arbitration under the SCC Rules compared to ad hoc procedures.
The SCC’s key recommendation includes replacing references to ad hoc arbitration with the SCC Rules in AB 25 and ABPU 25. The reasons for this include inter alia:
- SCC procedures are generally faster and more cost-effective.
- The SCC makes regular updates to its rules to address current issues, providing parties with modern regulations.
- Structured framework and secure communication through the SCC Platform.
- Access to qualified arbitrators with experience in the construction sector.
- Potential creation of a special list of arbitrators with construction experience to further strengthen the process.
We consider that the SCC Rules are well-suited for AB contracts and note that international standard contracts prescribe the use of institutional rules, indicating the advantages of an institute-administered process.
The BKK expects the new standard agreements to be finalised by summer 2025. We look forward to following the progress of BKK’s efforts to modernise the Swedish construction industry and are very open to dialogue and cooperation with the BKK on this work.
Read the SCC’s consulation responses (in Swedish) here and here.