Commercial Arbitration

Last verified on Thursday 20th May 2021

Commercial Arbitration: Denmark

Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Poul Schmith

Infrastructure

1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

Denmark

Yes, Denmark is a party to the New York Convention. The Convention was ratified in November 1973. Denmark has two reservations. The first reservation is the reciprocity reservation (ie, the Convention only has effect when recognising and enforcing an arbitral award by another state that is a contracting state to the Convention). The second reservation is the commercial reservation (ie, the Convention only applies to commercial relationships and not for instance labour relationships). In 1976, Denmark announced that the Convention would also apply to Greenland and the Faroe Islands.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

Denmark

Denmark is a party to the 1961 Geneva Convention, the 1962 Convention on the Application of the European Convention on International Commercial Arbitration as well as the Energy Charter Treaty and the ICSID Convention. Denmark also has bilateral investment treaties in effect between with about 50 other countries, see the current status on: https://icsid.worldbank.org/en/Pages/resources/Bilateral-Investment-Treaties-Database.aspx#a44.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

Denmark

The act mainly governing arbitral proceedings in Denmark is the Danish Arbitration Act.

The Act was first originally adopted in 1972 and was completely revised in 2005 in accordance with the UNCITRAL Model Law from 1985. The purpose of the revision was to further arbitration in Denmark.

The Act applies to all arbitral proceedings seated in Denmark except for labour arbitration and certain specific special arbitrations enacted by law in Denmark.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

Denmark

The leading internationally focused forum of arbitration in Denmark is the Danish Institute of Arbitration. One-third of its cases are international, and the institution offers a list of both national and international arbitrators with both legal and technical expertise in their field of work.

According to article 11(1) of the institute's rules all appointments of arbitrators are subject to confirmation by the institute’s Chairman’s Committee in accordance with the rules article 13 (3-4). The parties can jointly appoint a sole arbitrator within a fixed deadline, cf. article 11 (2). In the case of a panel of three arbitrators, the parties can each appoint an arbitrator and jointly appoint the chairperson, cf. article 11 (3) and (4).

If one or more arbitrators are not appointed by the parties, the institute’s Chairman’s Committee shall appoint the said arbitrators, cf. article 11 (8).

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

5. Can foreign arbitral providers operate in your jurisdiction?

Denmark

Yes. Foreign institutions can conduct and manage arbitrations with their seats and/or hearings in Denmark.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

Denmark

There is no specialist arbitration court in Denmark. As for the recognition and enforcement of foreign arbitral awards, the Danish enforcement courts have jurisdiction.

The Danish judiciary is supportive of the law and practice of international arbitration. It is emphasised in the preparatory works of the Danish Arbitration Act that the Act is based on the UNCITRAL Model Law with the explicit purpose and intent of promoting international arbitration in Denmark.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Agreement to arbitrate

7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

Denmark

In Denmark under Danish law arbitration agreements do not have to have any specific format or form. Both oral and written arbitration agreements are valid and enforceable as long as they are either provable or at least not contested by the other party. As the Danish Arbitration Act is based on the UNCITRAL Model Law (1985), the grounds for refusing to recognise or enforce are generally the same as in the Model Law.

The parties may agree on settling both existing and future disputes by arbitration as long as the dispute arose in connection with a specific legal relationship. Thus, is it not possible to enter a general cover all clause that is not connected to a specific legal relationship with the purpose of having all disputes handled via arbitration.

In consumer affairs, it cannot be agreed that future disputes are to be settled by arbitration. Only after a dispute has arisen, may a business and a consumer agree to settle the dispute via arbitration.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

8. Are any types of dispute non-arbitrable? If so, which?

Denmark

Under section 6 of the Danish Arbitration Act, arbitration is limited to legal disputes in which the parties have an unrestricted right of disposition.

Consequently, some disputes are not arbitrable, such as matters regarding ascertainment of paternity, criminal charges, taxation, dissolution of marriage or adoption. Certain specific disputes are also excluded from arbitration, such as most disputes between residential tenants and landlords.  

Besides the above, labour arbitration follows its own rules and a unique process outside the scope of the Danish Arbitration Act.

Thus, almost all commercial matters are arbitrable.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

Denmark

Generally, under Danish law arbitration agreements only bind the parties to the agreement. However, parties can be bound by arbitration agreements by both universal succession and singular succession.

The issue of succession has not yet been regulated in the Danish Arbitration Act, but recent Supreme Court case law suggests that – subject to certain exceptions – third parties are bound by arbitration agreements by both universal and singular succession. Outside succession situations, a third party cannot be bound to arbitrate without an arbitration agreement being entered into by that party and thus cannot be bound to join the arbitral proceedings.

The Danish Arbitration Act does not regulate the issue of joinder. Consequently, joinder is only possible if it is in accordance with the arbitration agreement and is permitted under the arbitration rules.

The rules of the Danish Institute of Arbitration provide for third-party participation through joinder and third-party notice under certain circumstances, compare the institute's arbitration rules article 9.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

Denmark

The Danish Arbitration Act does not contain any rules governing consolidation. However, it is possible for an arbitral tribunal to consolidate separate arbitral proceedings under one or more contracts. The rules of the Danish Institute of Arbitration article 9 make it possible to consolidate cases between the same parties if a party has so requested and after the tribunal has consulted the other party and all the arbitrators in the affected cases.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

11. Is the "group of companies doctrine" recognised in your jurisdiction?

Denmark

The Group of Companies doctrine has not been recognised under Danish law. The issue is undecided as the law in Denmark is silent on the ‘group of companies doctrine’, and as the courts have not had the opportunity to rule on the issue.

However, popular opinion is that the courts would be reluctant to apply the doctrine and other bases for piercing the corporate veil in procedural matters.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

12. Are arbitration clauses considered separable from the main contract?

Denmark

Yes. Section 16(1) of the Danish Arbitration Act establishes the doctrine of separability.

Consequently, the invalidity of the parties’ main agreement does not necessarily invalidate the arbitration agreement.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

13. Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunals jurisdiction and competence?

Denmark

Yes. The principle of competence-competence is recognised in Denmark. The arbitral tribunals are competent to rule on their own jurisdiction. However, such rulings can be tried before the courts.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

Denmark

Generally, Danish courts have an arbitration-friendly approach.

As to agreements on arbitration with a consumer, section 7(2) of the Danish Arbitration Act stipulates that an arbitration clause is not binding if it has been drafted as a prior agreement with a consumer. However, the arbitration clause is valid also in consumer affairs if it has been entered into after a dispute has arisen.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

Denmark

No statistics are available to show whether institutional international arbitration is more or less common than ad hoc international arbitration in Denmark. Nevertheless, the Danish Institute of Arbitration publishes statistics regarding cases settled by the Institute showing that on average the Institute handles 122 cases annually. It is generally assumed that most international arbitrations in Denmark are conducted via the Danish Institute of Arbitration, and it is fair to assume that the ad hoc international arbitrations that take place in Denmark are often conducted in accordance with the UNCITRAL Rules.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

Denmark

 The Danish Arbitration Act does not contain any rules on multi-party arbitration agreements. Thus, it would be advisable to ensure that matters of procedure are handled sufficiently in the arbitration clause, eg, consent for multi-party arbitration, appointment of arbitrators (who and how), joinder and consolidation.

Under the rules of the Danish Institute of Arbitration article 9 (1 and 2) contains rules on consolidation, article 9(3) contains rules on joinder, and article 11(6) stipulates, that the claimants and the respondents respectively appoint an arbitrator, failing this all members of the tribunal shall be appointed by the Chairman’s Committee.  

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Commencing the arbitration

17. How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

Denmark

Unless otherwise agreed, arbitration commences on the day that the respondent receives the written notice of the claimant’s request for arbitration.

Under the rules of the Danish Institute of Arbitration article 4(2) the arbitration is commenced when the institute receives the statement of claim from the claimant.

In Denmark, there is no key provision under the arbitration laws relating to the limitation period, but the alleged claim may be time-barred according to substantive law whether this be under Danish or other countries national law. The Danish statute of limitations act contain a main rule barring claims older than three years. This, however, has many exceptions.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Choice of law

18. How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Denmark

Parties are free to decide on the governing law of the arbitration agreement. Section 28 of the Danish Arbitration Act stipulates that the arbitral tribunal makes the award based on the substantive law of the dispute under the parties’ agreement.

If the substantive law is unclear, the arbitral tribunal must determine the applicable law under section 28(2) of the Danish Arbitration Act. The provision states that the tribunal must apply the legal rule that is applicable in accordance with the choice of law rules. The arbitral tribunal may only decide the case ex aequo et bono or as amiable compositeur only if the parties have expressly authorised the tribunal to do so.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Appointing the tribunal

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

Denmark

According to section 12 of the Danish Arbitration Act, the arbitrator must be independent and impartial. The arbitrator must also have the qualifications agreed upon by the parties, if such have been agreed upon.

Unless otherwise agreed the parties shall have a notice of 30 days to appoint an arbitrator and the arbitrators shall appoint the chairperson within 30 days of their appointment.

Under the rules of the Danish Institute of Arbitration article 4(3)(i) the claimant’s statement of claim shall contain information regarding the number of arbitrators, the appointment of one or more arbitrators (including names and contact information) and the jointly appointed chairperson. The same requirement applies to the statement of defence and any counterclaims made by the respondent, in article 7(1) (i).

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

Denmark

The Danish Arbitration Act sets no limitations on the choice of arbitrators in connection with their nationality. Thus non-nationals may act as arbitrators where the seat is in Denmark or hearings are held in Denmark. With the exception of possible immigration or visa requirements depending on the nationality of the arbitrator, there are no requirements or restrictions on non-nationals acting as arbitrators.

The rules of the Danish Institute of Arbitration article 11(7) specifically includes non-national chair arbitrators in cases, where not all parties are Danish, unless the parties agree otherwise.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

Denmark

The Danish Arbitration Act allows for the parties – directly or indirectly via institution rules or similar – to agree on the mechanism to appoint arbitrators. If the parties have not made such agreement (and if a selected institution does not have rules regarding the appointment) the Danish Arbitration Act provides a standard mechanism where the tribunal is to consist of three arbitrators.

In such cases, a party is granted 30 days to appoint an arbitrator after having been requested to do so by the other party. The party-appointed arbitrators then appoint the chair arbitrator within 30 days after being appointed themselves.  

If a tribunal is not established via this mechanism, for instance, where a party does not appoint an arbitrator within 30 days of the request, each party may request that the courts appoint the missing arbitrator(s).

The rules of the Danish Institute of Arbitration allow for the parties to each appoint a party-appointed arbitrator and to jointly appoint a chair arbitrator. The rules also contain a failsafe mechanism for having the arbitrators appointed by the Chairman’s Committee.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

Denmark

Danish arbitrators are not afforded immunity. Thus, they can be sued following their actions during an arbitration for, eg, reimbursement of fees, tort liability etc. The standard for liability would resemble the liability standards of a Danish sitting court judge.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

Denmark

The arbitral tribunal can secure payment of their fees under section 36 of the Danish Arbitration Act. The arbitral tribunal determines the type of security and the amount of the fee.

The rules of the Danish Institute of Arbitration obligate the parties to pay a financial deposit to the institution as a deposit for the estimated costs of the arbitration including the fees of the arbitrators.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Challenges to arbitrators

24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

Denmark

Sections 12-13 of the Danish Arbitration Act provide rules on the challenge of arbitrators.

If there are any circumstances giving rise to justifiable doubts about the impartiality or independence of an arbitrator or if an arbitrator does not have the professional skills otherwise required by the parties’ agreement, a party may challenge that arbitrator.

Parties may only challenge the arbitrators that they appointed, or participated in the appointment of, if the circumstances giving rise to the challenge were not known to the party at the time of appointment.

The parties can agree – directly in the agreement or indirectly via the appointment of an institution’s rules etc – on the mechanism for challenging an arbitrator. If the parties have not agreed otherwise the challenge must be made in writing to the tribunal within 15 days after the party has become aware of the appointment of the arbitrator and the grounds upon which the challenge is founded. Unless the arbitrator withdraws, or the other party agrees on the challenge the tribunal decides on the challenge. If a challenge to an arbitrator is unsuccessful before the tribunal, the challenging party may bring the challenge before the courts within 30 days of receipt of the tribunal’s decision.

The rules of the Danish Institute of Arbitration provide a quite similar mechanism for the challenge of arbitrators. Challenges are – unless both parties agree on the challenge or unless the arbitrator withdraws – decided by the Chairman’s Committee.

While the IBA Guidelines are only directly applicable if so agreed by the parties, they are generally taken into account as a source of best practice.  

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Interim relief

25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

Denmark

In Denmark, the courts may order interim relief under section 9 of the Danish Arbitration Act.

Arbitral tribunals may order such interim measures as they find necessary pursuant to section 17 of the Act. Such measures may include injunction, prohibition, arrest and securing evidence, etc. The Danish Arbitration Act is similar to the UNCITRAL Model Law (1985) article 17 and has not been revised in accordance with the 2006 amendments of the Model Law.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

Denmark

An arbitral tribunal may order the parties to provide security for the tribunal’s fee and expenses under section 36 of the Danish Arbitration Act.

The tribunal may also order the party seeking interim relief to put up security in connection with grating the relief for the possible costs of the interim relief including possible liability, etc.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Procedure

27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

Denmark

The Danish Arbitration Act generally acknowledges the principle of party autonomy and to a great extend arbitration under the act can be tailored to the parties’ wishes. The Danish Arbitration Act only contains a few mandatory rules in section 2(2), such as the provisions prescribing the impartiality and independence of arbitrators, the equality of the parties, the right to be heard and certain requirements to the arbitral award.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

Denmark

A respondent’s failure to submit its statement of defence does not halt the arbitral proceedings. The failure to participate is not to be interpreted as recognition of the claimant’s allegations.

If a party fails to partake in the oral hearings or to submit evidence without valid grounds, the arbitral tribunal may continue the proceedings and make an award on the evidence.  

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

Denmark

Parties are generally free to agree on the questions of evidence. In the absence of an agreement, the tribunal may determine the evidence that may be produced. The Danish Arbitration Association drafted rules on the handling of evidence in 2010. To some extent, the rules are based on the IBA Rules on the Taking of Evidence and are widely applied in Danish arbitration proceedings.

The use of both expert opinions and written witness statements is increasingly common in Danish arbitration.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

Denmark

Yes. The tribunal as well as a party with the tribunal’s consent may request the court to assist in the obtaining of evidence or to request a ruling by the European Court of Justice on a question necessary for making an award.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

Denmark

There are no explicit provisions regarding document production in arbitration under Danish law. Unless otherwise agreed by the parties, the tribunal has wide discretion in terms of the taking of evidence and may decide whether document production must be ordered.

Under the Danish Arbitration Association’s Rules on the Taking of Evidence in Arbitration, the tribunal may order a party to present the documents in its possession at the request of the other party.

US/UK discovery procedures are possible but not the prevailing practice.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

32. Is it mandatory to have a final hearing on the merits?

Denmark

According to section 24 of the Danish Arbitration Act the tribunal decides whether an oral hearing should be conducted, or the case should be decided based on written memoranda only. However, if one party so requests, the tribunal is obligated to hold a hearing at a suitable time and following the appropriate notice of the parties.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

Denmark

Yes. The parties may agree on where to hold the arbitration proceedings, and in the absence of such an agreement the tribunal may exercise its discretion on this matter with due consideration to the circumstances of the case and the convenience of the parties.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Award

34. Can the tribunal decide by majority?

Denmark

Yes, unless otherwise agreed by the parties.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

Denmark

Unless otherwise agreed by the parties, the tribunal is free to grant remedies or relief available to the courts that are arbitrable and that are not contrary to public policy.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

Denmark

Dissenting opinions are permitted but not common in practice.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

37. What, if any, are the legal and formal requirements for a valid and enforceable award?

Denmark

The award must be in writing and signed by the arbitrators. If the tribunal consists of several arbitrators and one arbitrator does not sign the award, the reason must be given in the award. Furthermore, the award must be dated and specify the venue of the arbitration.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

Denmark

Parties may request that the tribunal corrects any errors within 30 days after receiving the award. Furthermore, the tribunal may, on its own, correct any errors within 30 days of making the award.

In addition, the parties may request that the tribunal renders an award on claims that were raised during the arbitration proceedings but not part of the award.

Challenges to the award must be brought before the courts within three months of the party receiving the award.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Costs and interest

39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

Denmark

Unless otherwise agreed by the parties, tribunals will generally award costs based on the ‘loser pays’ rule. Unlike the Danish courts, arbitral tribunals do not measure costs based on predetermined tariffs. Instead, arbitral tribunals can award costs based on the documented expenses of the winning party, including the legal costs and other external assistance insofar as the costs are deemed reasonable.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

Denmark

Yes.

The Arbitration Act does not address the issue that is considered to be dealt with by substantive law. As with court judgments, interest may be included on the principal claim and costs. The rate of interest under Danish law for most claims is currently 8 per cent annually.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Challenging awards

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

Denmark

The Danish Arbitration Act does not give access to the courts for the appeal of an award on the merits. Thus, an arbitration award is final and cannot be appealed to the courts unless the parties have agreed otherwise.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

42. Are there any other bases on which an award may be challenged, and if so what?

Denmark

Recourse against an award can only be made by an application to a court for setting aside the award, as per the Danish Arbitration Act article 37.

The award can be set aside if:

  • a party to the arbitration agreement was under a form of incapacity or if the arbitration agreement was invalid;
  • the party was not given proper notice or unable to present its case;
  • the award falls outside the scope of parties' submissions;
  • the composition of the tribunal or the arbitral procedure was not in accordance with the arbitration agreement;
  • the subject-matter of the dispute is not arbitrable; or
  • the award is manifestly contrary to Danish public policy.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Denmark

The right to apply for setting aside the award on the grounds mentioned in question 42 cannot be waived beforehand.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Enforcement in your jurisdiction

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Denmark

No, in principle Danish courts will not enforce awards that were set aside by a competent authority in the country where the arbitration was seated.  

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

Denmark

Generally speaking, Danish courts are arbitration-friendly and will seek to enforce national and foreign awards. This correspondends with the intents of the Danish parliament in enacting the Danish Arbitration Act.  

Recent decisions by the Supreme Court and the High Court have refused setting aside awards for a purported breach of a party’s right to be heard as the courts did not find that the circumstances were a violation of ‘fundamental principles of the administration of justice‘.

Also, a recent report on Danish arbitration rules by the Danish Institute of Arbitration suggested a revision of the Arbitration Act in accordance with the 2006 amendments of the UNCITRAL Model Law, citing, inter alia, the need for interim measures by tribunals to be enforceable.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Denmark

In as far as a matter is arbitrable the state will be bound by an arbitration agreement and subsequently an arbitration award as any other legal entity.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

Further considerations

47. To what extent are arbitral proceedings in your jurisdiction confidential?

Denmark

Arbitral proceedings are private and therefore in principle not available to the public. However, the Danish Arbitration Act does not stipulate any rules on confidentiality, and the parties are therefore not under any legal obligation of confidentiality unless otherwise agreed. Under the rules of the Danish Institute of Arbitration, the tribunal may decide on the confidentiality of the proceedings upon the request of a party. Under these rules, the arbitrators and the arbitral institution as such treat the arbitration as confidential.  

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

Denmark

There are no general rules on the confidentiality of information supplied or otherwise produced during the arbitration. Normal legal protection, such as for trade secrets, will, therefore, be applicable irrespectively of the arbitration proceedings. Therefore, parties will often make agreements on confidentiality or select institutional rules that may provide rules on confidentiality to some extent.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Denmark

The Danish Arbitration Act provides no direct ethical codes or professional standards to counsel and arbitrators other than those following from the mandatory rules on, for example, impartiality and independence.

However, all Danish lawyers are subject to the Code of Conduct of the Danish Bar and Law Society, which sets forth ethical standards that are to be abided by when partaking in arbitration as well.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

Denmark

In the words of the President of the Danish Maritime and Commercial High Court, the Danish court system is a neutral and professional partner of the Danish arbitration environment. This means that the court system can be expected to speedily assist in the arbitration process when called upon.

Furthermore, the Danish rules and practices are construed in accordance with the rules and principles of the New York Convention and the UNCITRAL Model Law (1985), securing a narrow application of the rules on non-recognition or setting aside of arbitral awards.

The Danish Arbitration Act is modelled on the Model Law (1985) with the express intent to further the use of (international) arbitration in Denmark. In our opinion, this makes Denmark very well suited for international arbitrations.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

Denmark

The use of third-party funding is permitted but not commonplace yet. The trend is for third-party funding to become more commonly used both for funding and for divestment purposes. Third-party funding is not specifically regulated and case law on the matter is very limited.

Answer contributed by Paw Fruerlund, Mads Bojsen and Henrik Nedergaard Thomsen

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