Norway has established itself as a source of high-quality counsel and arbitrators for international disputes, in particular in the petroleum and shipping industries. Norwegian arbitration law also has some unique features that may prove attractive for those seeking arbitrators with highly specific fields of competence. Faced with its first investment arbitrations ever, initiated by companies in EU member states, the potential reach of Achmea into the extended Internal Market of the EEA comes to the fore. Recent statistics from the Norwegian courts highlight one advantage of arbitration: the finality of the result. The Oslo Chamber of Commerce aims to increase the popularity of institutional arbitration with new, modern rules. Similarly, the newly established Nordic Offshore and Maritime Arbitration Association (NOMA) offers semi-institutional arbitration with a light touch, and is steadily gaining popularity.
- Norwegian excellence in oil and gas disputes
- Norway faces first investment arbitration claims
- Recent statistics highlight one advantage of arbitration
- Institutional arbitration gains ground in Norway
- The NOMA rules offer semi-institutional arbitration with a light touch
Referenced in this article
- Borgarting court of appeal
- Frigg treaty
- International Court Of Justice
- Jan Mayen judgment
- Naftogaz-Gazprom arbitrations
- Norwegian Arbitration Act
- Oslo Chamber Of Commerce
- Svea Court Of Appeal
Norwegian excellence in oil and gas disputes
Since 2013, lawyers from Norwegian law firm Wikborg Rein (including one of these authors) have made a mark on the pages of Global Arbitration Review with the successful representation of European buyers of natural gas, most remarkably as lead counsel to Ukrainian Naftogaz in its multibillion dollar disputes with Gazprom, which eventually were settled after Naftogaz submitted claims of around US$12 billion in arbitration, and Gazprom completely lost its attempt to set aside the first of three adverse awards. The reader may wonder why a Norwegian law firm represents a Ukrainian company in disputes with no relation to Norway; the parties are Ukrainian and Russian, the governing law and arbitration venue are Swedish and the goods and services traded originate in Central Asia, Russia and Ukraine. Other observers of the global oil and gas industry may have wondered why another Norwegian law firm played a key role in negotiating an agreement on oil processing and transportation between Sudan and South Sudan in 2012.
The answer is Norway’s development as a major producer of oil and gas since the early 1960s. In February 1958, Norway’s Geological Survey reported that ‘[o]ne can exclude the possibility of finding coal, oil or sulphur on the continental shelf bordering the Norwegian coastline’. A more amusing, but possibly mythical, twist on the same theme is the story about the head geologist of a major oil company who, in the mid-60s, quipped that he would drink all the oil that would be found on the Norwegian continental shelf. That pessimistic view on North Sea geology started to change with the 1959 discovery of the Groningen field in the Netherlands and Phillips Petroleum Company in 1962 requesting exploration rights from the Norwegian government.
The government immediately went about establishing a legal basis for the administration of the (potential) petroleum resources on the Norwegian continental shelf, starting with a 1963 Royal Decree, and the rest is, as they say, history. Today, Norway is the eighth largest producer of oil and the third largest producer of gas in the world. 
Norway was also a wealthy, democratic and highly developed industrial country before it became a producer of oil and gas. Norway’s well-established shipping and shipbuilding industry took advantage of the opportunities provided by the exploration and production of the newfound natural resources and branched out into the oil and gas service and supply industry. Norway’s service and supply industry has since developed cutting-edge expertise and is internationally competitive. Norway remains one of the leading maritime nations of the world, and in 2018 was ranked by DNV GL in fourth place, tied with Germany and South Korea, behind China, the United States and Japan.
And like the ‘nuts and bolts’ part of the Norwegian oil and gas service industry, its lawyers also benefited from their colleagues in the shipping industry, who had led the way in the internationalisation of the Norwegian legal profession.
Finally, the development of the Norwegian oil and gas industry went in parallel with developments in the public international law of the sea and natural resources, where Norway’s geography and maritime resources led it (and its lawyers) to play a central role. Many readers may be familiar with the 1993 International Court of Justice (ICJ) judgment on maritime delimitation between Jan Mayen (Norway) and Greenland (Denmark), or the 1976 Norway–UK treaty on cross-border unitisation of the Frigg gas field as textbook examples.
Against this background of more than 50 years of building oil and gas industry competence on the back of a well-established maritime industry, it is probably less surprising to see Norwegian lawyers retained in international oil and gas disputes for their cutting-edge expertise, rather than because of a need for local counsel.
Joint appointment of arbitral tribunals as the default rule
Norwegian arbitration law has a particular feature that may be of particular interest for parties seeking arbitrators with highly specific competence, namely the joint appointment of arbitral tribunals.
Pursuant to section 13, second paragraph of the Norwegian Arbitration Act 2004 (NAA), ‘[t]he parties shall appoint the arbitrators jointly, if possible’. Only if the parties fail to do so does the NAA provide for a procedure whereby each party appoints one arbitrator. Both procedures may be deviated from by agreement.
This procedure seems to be a specifically Norwegian invention. Joint appointment of arbitrators is not found in the UNCITRAL Model Law, in the Swedish or Danish Arbitration Acts, the German Code of Civil Procedure, the 1996 Arbitration Act for England, Wales and Northern Ireland or any institutional rules the authors are familiar with, other than the Rules of the Arbitration and Dispute Resolution Institute of the Oslo Chamber of Commerce (since 2005) and the 2017 Rules of the Nordic Offshore and Maritime Arbitration Association (the NOMA Rules).
Internationally, the default rule appears to be that each party appoints one arbitrator and that the arbitrators so appointed, or the arbitral institution, appoints the chairperson. That was also the rule in Norway prior to the 2004 NAA.
The reason for the rule on joint appointment of arbitrators in section 13 of the NAA is simple and attractive:
It is advantageous if the parties can agree on the arbitral tribunal in its entirety. The tribunal then gets generally less attached to the parties and a stronger character of independence than when the parties appoint one arbitrator each.
The arrangement has been well received in practice, and parties increasingly appoint all arbitrators jointly in Norwegian-based arbitrations. The inclusion of the procedure in the NOMA Rules also attests to its success.
In an international context, the importance of this salient feature of Norwegian and Nordic maritime arbitration is that it proposes a possible solution to the ‘repeat appointment’ problem within highly specialised fields of law.
Most legal systems, rightly, appreciate that repeated appointments by the same party, counsel or law firm of the same person as arbitrator may create doubts concerning that person’s impartiality and independence. The flip side of that coin is that highly qualified arbitrators within highly specialised areas of law with a small number of actors risk becoming victims of their own success and be excluded from the field just as they have accumulated the experience necessary to solve seemingly complex disputes correctly and efficiently.
At least to some extent, the consistently joint appointment of arbitral tribunals envisaged by section 13 of the NAA (and equivalent provisions in the Oslo Chamber of Commerce (OCC) and NOMA Rules) may resolve the above dilemma. The point is that, if handled appropriately, a joint appointment should seriously reduce the risks concerning arbitrators’ impartiality or independence.
The Stockholm Court of Appeal, which handles all challenges of awards rendered in Stockholm-seated arbitrations, has reasoned that even if the parties are given a measure of influence on the selection of the chairperson, because the party-appointed arbitrators usually consult with ‘their’ appointing party or counsel during the process, such appointments as chairperson shall not count as party appointments for the purpose of assessing the arbitrator’s impartiality and independence. That reasoning should hold true also for a jointly appointed tribunal.
Norway faces first investment arbitration claims
2019 and 2020 saw Norway face investment arbitration claims, most likely for the first time. In 2019, a Polish vehicle for Jay-Z’s music streaming company Tidal threatened a claim in response to an ongoing criminal investigation. In 2020, a Latvian company lodged a claim after it had been successfully prosecuted for illegal fishing in Norwegian waters. A common trait of both cases is that they rely on BITs Norway entered into with former East Bloc countries in the 1990s, before the latter became EU members. This raises the issue of whether the Achmea judgment and subsequent developments may protect Norway, which, as a member of the EEA, effectively is a part of the EU Internal Market.
Recent statistics highlight the advantage of finality of arbitral awards
Norwegian law firm Brækhus recently surveyed all civil judgments in appeal cases rendered by Norway’s largest appeal court, the Borgarting Court of Appeal in Oslo, between 1 May 2019 and 1 May 2020. Thirty-nine per cent of the appeals succeeded, in full or in part. The survey led to debate, with one successful appellant likening city court proceedings to bingo, prompting two Oslo City Court judges to point out that most city court judgments are not appealed, and that those that are appealed often are the ones that raise the most factual or legal doubt, and therefore are most susceptible to being changed on review. Meanwhile, arbitration practitioners may feel vindicated in preaching the finality of the award as one benefit of arbitration over litigation.
The ad hoc tradition and the shift towards more institutional arbitration
Traditionally, most arbitrations in Norway have been ad hoc, in the sense that no arbitration institution is involved. The tribunal will base itself on the NAA, which leaves quite a bit of discretion to the tribunal. This ad hoc tradition has worked well, but has, at the same time, been unfamiliar with international players present in Norway. For anyone not knowing the Norwegian arbitration market well, ad hoc arbitration can be perceived as something of a ‘black box’.
Thus, one shift seen in Norway is that international arbitration institutions such as the International Chamber of Commerce (ICC), the London Court of International Arbitration, the Stockholm Chamber of Commerce (SCC), the Singapore International Arbitration Centre and the China International Economic and Trade Arbitration Commission are seen more often. Along with the general trend that these institutions have modernised themselves and their rules, the common view among the leading dispute lawyers is no longer that such institutes are necessarily slow and expensive. On the contrary, the ICC and SCC’s scrutiny of costs are viewed as very positive by the users of arbitration. Based on this general trend, it would have been surprising if one had not seen the growth and development of institutional arbitration in Norway.
In recent years, arbitration has in general gained increased attention in the Norwegian legal community. There has been an increase in articles written by legal scholars and practitioners about the pitfalls and advantages of arbitration. One result of this development is Norwegian Arbitration Day 2019, which was the first of its kind and arranged and hosted by the Law Faculty of the University of Oslo.
The new rules of the Oslo Chamber of Commerce
The only truly Norwegian arbitration institute is the Arbitration and Dispute Resolution Institute of the OCC. Established in 1984, the OCC presented new rules for arbitration and mediation in force from 1 January 2017. With modern regulation such as a cap on costs, joint appointment and a very accessible form of fast-track arbitration, the institute has taken a step up in the international arbitration community. The rules give a good basis for sleek and cost-effective arbitrations, and have been very positively received within the dispute resolution community.
The semi-institutional NOMA Rules
Norway and the Nordic countries have strong traditions within the maritime and offshore oil and gas industries. These industries have, however, always had a strong link to London, including when it comes to resolving disputes through arbitration. The Nordic countries have long traditions for settling disputes within the maritime and offshore industry by ad hoc arbitration. In the globalised shipping and offshore oil and gas industry, the Nordic industry and the Nordic legal community recognised that it would be useful to develop an even more common approach to Nordic arbitration. In this context, the Nordic Maritime Law Associations, together with the industry, developed the NOMA Rules, to promote transparent and cost-efficient arbitrations.
The project, in which law professors, judges and lawyers from Norway, Sweden, Finland and Denmark decided to sit down and develop one Nordic set of arbitration rules to be used throughout the Nordic countries was ambitious. NOMA was established on 28 November 2017 on the initiative of the Danish, Finnish, Norwegian and Swedish maritime law associations.
A high-quality set of rules was developed and has already been used in several arbitration proceedings. Today, NOMA also has elected a board of directors and can be described as semi-institutional.
The NOMA Rules emphasise speed and simplicity, and take a light-touch approach. In terms of speed and efficiency, the NOMA Rules have shorter time limits and omit certain procedural steps as compared to the UNCITRAL Arbitration Rules on which they are based. For example, the deadlines for appointing arbitrators are shorter and there is no requirement for a response to the notice of arbitration.
Further, the possibility to request an interpretation of an award from the tribunal has been removed, eliminating another possibility for delays. Obviously, this also requires the parties to present clearly formulated requests for relief and the tribunal to draft the award succinctly and clearly, and hence front loads possible clarification issues to the arbitral proceedings.
The NOMA Rules also lack an explicit provision on tribunal-appointed experts. This reflects the adversarial tradition in Nordic dispute resolution, where it is for the parties to adduce the evidence, but may also save on time and costs by avoiding debates over the need to appoint such experts and their potential terms of reference.
A final point where the NOMA Rules take a light-touch approach, and go against the international trend towards ever-increasing powers for arbitral institutes, is the lack of explicit provisions on consolidation. To many, this may be a welcome deference to party autonomy.
In addition to the arbitration rules, NOMA has developed three further documents aimed at promoting efficiency: the NOMA Best Practice Guidelines (the Guidelines), the NOMA CMC-Matrix (the Matrix) and the NOMA Rules on the Taking of Evidence (the Evidence Rules). The Guidelines are attached to the NOMA Rules, which provide that the tribunal and the parties shall perform the arbitration taking into account the Guidelines. However, the Guidelines may, of course, also be used on a stand-alone basis, as an expression of commonly accepted practice in Nordic-seated arbitrations.
The Guidelines are intended to assist tribunals and parties on certain procedural points. For example, they list issues to be considered in relation to, or at, the case management conference; for example, whether time should be allocated for settlement discussions, whether a written procedure is possible and whether written witness statements or expert reports are necessary. The Guidelines also contain default procedural deadlines and a default structure for the oral hearing.
The Matrix is a more detailed, tabular checklist of matters to be discussed and agreed at the case management conference. For each matter, the Matrix indicates the best practice and, for some matters, also practical recommendations.
The Evidence Rules are less complicated than the IBA Rules on the Taking of Evidence in International Arbitration. This reflects the Nordic tradition of immediacy and emphasis on oral evidence and scepticism to discovery procedures. Notably, the default rule is that written witness statements shall not be used. Also, while there is a possibility to request documents from the other party, the tribunal may not order document production unless the parties agree or the tribunal decides otherwise.
The NOMA Rules are already finding their way into numerous contracts in the Nordic shipping and offshore oil and gas industry, and the 2019 version of the Nordic Marine Insurance Plan adopted an arbitration clause governed by the NOMA Rules as optional for Nordic claims leaders and as default for non-Nordic claims leaders. This is not least due to the involvement of the Nordic Maritime Law Associations and the support of the industry itself. Both the Norwegian and Danish shipowners’ associations have also welcomed the launch of the rules. In our experience, the NOMA Rules are now also referred to in the standard charter parties of several large Nordic ship owners.
Whether also the Guidelines, Matrix and Evidence Rules will find their way into the toolbox of counsel and arbitrators as sources of best practice beyond proceedings under the NOMA Rules and the Nordic shipping and offshore oil and gas industry remains to be seen. Based on the widespread adoption by the arbitration community of similar instruments, such as the International Bar Association’s various rules and guidelines, our expectation is that they will do so.
 https://globalarbitrationreview.com/article/1032473/icc-panel-revises-gazprom-export-price-formula; https://globalarbitrationreview.com/article/1142219/naftogaz-declares-win-against-gazprom; https://globalarbitrationreview.com/article/1166220/naftogaz-claims-victory-in-gas-transit-dispute; https://globalarbitrationreview.com/article/1171538/naftogaz-files-new-tariff-claim-against-gazprom.
 Farouk Al-Kasim, Managing Petroleum Resources. The ‘Norwegian Model’ in a broad perspective, Oxford Institute for Energy Studies, 2006, p. 8.
 Stig S Kvendseth, Giant Discovery, a history of Ekofisk through the first 20 years, Phillips Petroleum Company Norway on behalf of the Phillips Norway Group, 1988, pp. 12 and 13.
 Ot. prp. (white paper) No. 27 (2003–2004) section 93, author’s translation.
 Geir Woxholth, Voldgift (arbitration), 2013, p. 391.
 Dag Mjaaland and Aadne M. Haga, Voldgiftsloven section 13 annet ledd. Gjentatte oppnevnelser og voldgiftsdommeres habilitet i internasjonale forhold (Norwegian Arbitration Act, section 13, second paragraph. Repeat appointments and the impartiality and independence of arbitrators in an international context), in Avtalt Prosess, voldgift i praksis (Agreed Procedure, arbitration in practice), Universitetsforlaget, 2015.
 Section 43, Swedish Arbitration Act.
 Mål T 10321-06. The judgment is available in an unofficial translation into English at https://www.arbitration.sccinstitute.com/Swedish-Arbitration-Portal/Court-of-Appeal/Court-of-Appeal/Court-of-Appeal/d_952259-decision-of-the-svea-court-of-appeal-10-december-2008-case-no.-t-10321-06?search=korsn%C3%A4s.