32 Sweden
This chapter discusses the law of set-off in Sweden. Set-off in Sweden has developed through case law and legal commentary although legislation has been considered necessary in certain areas such as bankruptcy. The legal landscape of set-off can be divided into two sets of principles, those applying outside bankruptcy and those applying in bankruptcy. The chapter first considers set-off between solvent parties, focusing on set-off after a transfer of the principal claim, contractual arrangements, and set-off as security interests. It then examines set-off against insolvent parties, with emphasis on restrictions regarding the right of set-off in bankruptcy, recovery of set-off effected before bankruptcy, and close-out netting. It also analyses cross-border issues with respect to applicable law for set-off outside bankruptcy, applicable law for set-off in bankruptcy, and the conditions for cross-border set-off under Swedish law.