International Arbitration 2019 Comparisons

Last Updated August 23, 2018

Contributed By Plesner

Law and Practice


Plesner 's offices are located in Copenhagen, overlooking Copenhagen Harbour and the Baltic Sea, and house around 440 employees, including 265 lawyers (fee earners). Plesner's Arbitration and Litigation groups are the largest in Denmark comprising more than 70 lawyers in total (including junior associates) and covering all commercial practice areas. Plesner is the Danish market leader within several specialised fields such as International Arbitration, Tax Litigation, IP Litigation, Competition Law Litigation, Insurance Litigation, Bankruptcy Litigation, as well as Telecoms, and Plesner is second to none within Construction Law Arbitration and other arbitration and litigation areas such as M&A, Professional Liability, Banking and Finance, and Employment Law.

Since the enactment of the first comprehensive Arbitration Act in 1972, arbitration has steadily grown in popularity and is on the verge of becoming the preferred dispute resolution mechanism for commercial disputes – particularly for disputes involving parties from different countries. Indeed, Denmark is increasingly selected by non-Danish parties as a "neutral" venue for international arbitrations.

Owing to a modern Arbitration Act (which underwent extensive revision in 2005 and is currently under revision again), the preference for confidentiality and enforcement opportunities outside of the EU, as well as due to the emergence, in recent years, of a corps of highly skilled and specialised practitioners, arbitration is the primary dispute resolution mechanism in commercial relationships between private parties and in relation to construction projects, including projects where the owner is a ministry, municipality or other public authority.

In 2012, the Danish Institute of Arbitration ("DIA") established a working group assigned with the task of making proposals for revision of the Danish Arbitration Act of 2005 ("DAA"). The report issued by the working group in 2017 identified several avenues for improvement of the legal framework for arbitrations conducted in Denmark. The working group's proposals included, eg (i) limiting the access to appeal of court decisions in arbitration-related matters; (ii) bestowing the Maritime and Commercial Court of Copenhagen with exclusive jurisdiction to hear such matters in the first instance (thereby centralising case management and increasing the level of specialisation); and (iii) allowing parties to adduce evidence in the English language when the language of arbitration is not Danish. Another key finding of the working group concerned the need to strengthen the legal regime applicable to interim measures granted by arbitral tribunals, which are not at present directly enforceable under Danish law (see 1.4 Arbitral Institutions).

In addition to the contemplated legal reform, a debate is currently taking place in legal doctrine and among practitioners regarding the status of the Danish Building and Construction Arbitration Board (the "Arbitration Board"; in Danish: Voldgiftsnævnet for Bygge- og Anlægsvirksomhed), which handles most construction disputes in Denmark based on agreed documents and standard arbitration clauses. In a nutshell, the controversy revolves around the questions of whether the Arbitration Board is more appropriately characterised as a specialised court, and whether it should be made easier to submit disputes in the construction sector – in particular international disputes – to "regular" ad hoc or institutional arbitration (see 1.4 Arbitral Institutions for more information on the Arbitration Board).

There are no sector-specific or general ADR statistics available for Denmark. However, the statistics published by the DIA in 2017 (covering all of the cases filed with the DIA in the past five years) suggest significant activity in the sectors of 'general trade' and 'telecommunications and technology'. The 'public sector', 'transportation' and 'finance, insurance/reinsurance' are also well represented in the DIA's statistics. Interestingly, the bulk of the DIA's caseload appears to be made up of disputes in the category 'others'. From our own practice, we have seen a rise in the level of M&A-related arbitrations involving different industries.

Denmark has had its own regional institution since 1894, the Danish Institute of Arbitration ("DIA"). The DIA in its current form was created in 1981. It is today well established and enjoys a (generally) good standing in the profession. Other institutions with a more pronounced international vocation are also frequently used by Danish parties, eg the ICC, the LCIA and SCC.

Denmark, moreover, has a number of sector-specific institutions and bodies, e., the Arbitration Board (see 1.2 Trends) which oversees the vast majority of disputes in the construction sector. The Arbitration Board is specifically mandated to administer arbitrations within this field of law. The General Conditions for the Provision of Works and Supplies within Building and Engineering of 10 December 1992 (known as "AB 92") is included in nearly all public tenders in the building industry and designates the Arbitration Board as the forum for resolving disputes (Section 47 of AB 92). While this form of dispute resolution technically "qualifies" as arbitration in the sense of the DAA and the New York Convention, it deviates from the usual understanding of commercial arbitration in a number of ways. Most notably, parties do not take part in the selection of arbitrators, which is carried out by the Chairperson of the Presidency of the Arbitration Board.

As mentioned above (see 1.2 Trends) it is currently being debated whether it should be made easier for parties to "opt out" of the AB 92 default dispute resolution mechanism.

In addition to any institutional or other rules mutually agreed by the parties, arbitrations seated in Denmark are governed by the DAA. Arbitration-related court proceedings are governed by the DAA and the Administration of Justice Act ("AJA"). The latter applies generally to all litigation proceedings in Denmark. 

By and large, the DAA reflects the 1985 version of the UNCITRAL Model Law with only very minor adjustments.

The current DAA dates back to 2005 and, as such, pre-dates the most recent version of the UNCITRAL Model Law dated 2006.

The DAA is currently in the process of being revised with a view to aligning its contents with the 2006 Model Law – and bringing it in line with the current best international practices.

One focal point of the suggested legal reform concerns the implementation of Articles 17-17J of the 2006 version of the Model Law which set out the conditions for the issuance and enforcement of interim measures granted by arbitral tribunals, which are not currently enforceable in Denmark (see 6.1 Types of Relief). However, it is the centralisation and increase of specialisation at the Maritime and Commercial Court in relation to arbitration-related court proceedings that are most likely to change the arbitration landscape in Denmark.

Neither the DAA nor Danish contract law lay down any specific requirements as to the form of an arbitration agreement, and in principle even oral agreements may suffice.

Although it is of course very difficult to prove the existence of an oral arbitration agreement, arbitration agreements based on the parties' unequivocal behaviour (eg failure to object throughout the proceedings) or set out in other written exchanges (emails, letters, etc) or in the general terms of a party may be considered enforceable under Danish law, provided that it is possible to ascertain the parties' mutual consent to arbitrate on the basis of these elements and that the legal relationship in question can be validly submitted to arbitration under Section 6 of the DAA (see 3.2 Arbitrability and 5.1 Matters Excluded from Arbitration on the concept of "arbitrability" in Danish law).

Pursuant to Section 6 of the DAA, parties may refer to arbitration all disputes arising from legal relationships over which they enjoy "an unrestricted right of disposition". There is no list of non-arbitrable issues set out in the DAA (or case law) and, unless another statutory provision explicitly prohibits arbitration in a given area, the matter has to be determined on a case-by-case basis by arbitral tribunals that are confronted with a potential issue of arbitrability (and, potentially, the courts reviewing such jurisdictional decisions; for more detail see 5.1 Matters Excluded from Arbitration to 5.3 Circumstances for Court Intervention).

A negative finding under Section 6 of the DAA, which is mandatory and applies to all arbitrations irrespective of the location of the seat of the arbitration, constitutes an absolute obstacle to the jurisdiction of an otherwise properly constituted arbitral tribunal – which must, in principle, decline jurisdiction over the dispute – as well as to the enforceability of any award rendered in relation to non-arbitrable legal relationship(s) or claim(s). 

Under Section 4 of the DAA, when a dispute is covered by a valid arbitration agreement, the role of Danish courts is confined to those issues expressly provided for by law (eg assistance with constitution of the arbitral tribunal, securing evidence, issuing or implementing interim measures, setting-aside and enforcement proceedings, and reviewing the arbitral tribunal's decisions on challenges and jurisdiction). 

When a matter is submitted to the Danish courts in breach of an arbitration agreement, the court must at a party's request dismiss the case – except where the arbitration agreement is null and void, inoperable or incapable of being performed (Section 8(1)(1st sentence) of the DAA). Arbitration agreements (ie the parties' expression of consent) are not subject to stricter standards of interpretation than other types of contractual provisions.

It should be noted that, if an arbitration has already been initiated, the courts can only assess whether the dispute is arbitrable (Section 8(1)(2nd sentence) of the DAA).

Under Section 16(1) of the DAA, the arbitration agreement is severable from the rest of the contract. As such, the arbitration agreement is not necessarily affected by the invalidity of the main contract.

The DAA does not lay down any restrictions on party autonomy when it comes to the selecting the arbitrators. In principle, unless the arbitration agreement and/or institutional rules provide otherwise, parties are at liberty to designate any individual as arbitrator, without particular regard to qualifications, education and the like. This being said, a person who does not meet the general requirement of impartiality and independence set forth at Section 12(1) of the DAA will be exposed to a challenge under Section 13 of the DAA.

Under Article 10(2) of the Rules of the DIA, the presiding (or sole) arbitrator must hold a law degree.

In an arbitration, where the parties have not agreed on institutional rules or other method for constituting the arbitral tribunal, or if the agreed method fails, the default provisions of the DAA apply.

Under Section 11(2) of the DAA, if the arbitration agreement is silent on the method for constituting the arbitral tribunal, there will be a three-member arbitral tribunal and each party must appoint an arbitrator within 30 days of receipt of a request from the other side to do so. The co-arbitrators shall then jointly appoint the presiding arbitrator.

State courts cannot intervene in the constitution of an arbitral tribunal on their own volition but may under Section 11(2) of the DAA assist the parties with the constitution of the arbitral tribunal, if so requested.

Where Section 11(2) (see 4.2 Default Procedures) does not result in the constitution of the arbitral tribunal within the time limit specified therein, each party may petition the courts to appoint an arbitrator on behalf of the defaulting party or the co-arbitrators. The courts will accede to such a request whenever (i) the seat of the arbitration is located in Denmark or undetermined or the court has jurisdiction ratione personae over either one of the parties; and (ii) the procedure set out at Section 11(2) of the DAA failed.

Section 11 of the DAA does not expressly envisage a scenario where the arbitration agreement provides for a sole arbitrator but the parties do not jointly appoint an arbitrator within the 30-day time limit. However, it follows implicitly from the wording of Section 11(3) that, in such instances, either of the parties may solicit the assistance of the courts.

When acting as appointing authority, the courts must defer to the parties' arbitration agreement with respect to any desired qualifications, nationality requirements or other characteristics of the arbitrator(s) and must also ensure that the prospective arbitrators are impartial and independent.

In the case of proceedings conducted pursuant to the DIA Rules, the default number of arbitrators is one. In the event that the parties' agreed method for constituting the arbitral tribunal fails, the Chairman's Committee appoints the arbitrator(s) on behalf of the defaulting party(ies) (see Article 11(8) of the DIA Rules).

The grounds and procedure for challenges are set out at Section 13 of the DAA. Pursuant to this Section 13, a party can challenge an arbitrator (i) for want of impartiality or independence; or (ii) because the arbitrator does not possess the qualifications or characteristics stipulated in the arbitration agreement.

A challenge must be brought in writing within 15 days from the appointment of the arbitrator in question or from the point in time when the challenging party became aware of the grounds for the challenge.

In practice, the challenged arbitrator (at least if he or she is from Denmark) will often decide to step down so as to avoid undue delays and possible reputational harm, if there is at least some basis for the challenge. However, if the arbitrator does not resign and the parties have not agreed to another procedure, it falls to the arbitral tribunal (including the challenged arbitrator) to decide whether or not to uphold the challenge.

Pursuant to Section 13(3) of the DAA, if the challenge is rejected, the arbitral tribunal's decision can be contested before the courts within 30 days.

Under Article 13 of the DIA Rules, the Chairman's Committee decides on challenges after affording the other party and all of the members of the arbitral tribunal an opportunity to comment. 

Section 12 of the DAA and Article 12(1) of the Rules of the DIA provide that arbitrators must be impartial and independent, and prospective and acting arbitrators are, furthermore, required to disclose any and all information that may be of such a nature as to call into question their independence and impartiality. 

Neither the DAA nor the AJA sets out a list of circumstances that must disclosed. Furthermore, as challenges to arbitrators are very rarely referred to the courts for review under Section 13(3) of the DAA, there is very little case law on these issues. It is therefore difficult to make any general observations about the scope of the disclosure obligations under Section 12 of the DAA and Article 12(1) of the Rules of the DIA or the extent of the review performed by Danish courts in these respects.

Indeed, both the DAA and Sections 60 and 61 of the AJA, which concern the grounds disqualifying judges at the ordinary courts, leave a wide margin of appreciation to the courts. Increasingly, judicial practice appears to be informed by the IBA Guidelines on Conflicts of Interest in International Arbitration. A similar tendency to look to best international practices and well-established guidelines can be observed in the Chairman's Committee of the DIA's practice under Article 12(1) of the Rules of recent years.

It has not yet been settled in Danish case law whether and to which extent the omission of a potentially relevant piece of information may in itself be sufficient to disqualify an arbitrator. Judicial practice in similar jurisdictions suggests that, although failure to disclose would usually be insufficient in itself, it may, together with others factors, lead to the acceptance of a challenge. 

Pursuant to Article 6 of the DAA, "disputes concerning legal relationships in respect of which the parties have an unrestricted right of disposition may be submitted to arbitration unless otherwise provided".

As mentioned at 3.2 Arbitrability, there is no "list" of non-arbitrable issues set out in the DAA, or elsewhere.

As a general rule of thumb, national courts retain jurisdiction over certain fields of law traditionally considered to involve public policy concerns (ie immutable norms reflecting the fundamental values of society). This is the case of family law and criminal law and other areas of law partially governed by public law rules and/or enforced by a specialised administrative tribunals or bodies, eg public law aspects of antitrust/competition law. The case law of recent years suggests a general trend towards expanding the scope of Section 6 of the DAA, meaning that more and more areas of law traditionally considered non-arbitrable may now be validly referred to arbitration. Some of the more prominent examples of this trend are the fields of intellectual property law and competition law.

In line with the precedence set by the European Court of Justice in the Eco Swiss judgment of 1997 (C.129/97 Eco Swiss China Time Ltd. vs. Benetton International NV), the Danish Supreme Court in a 2016 judgment (U.216.1558/2H) confirmed that arbitral tribunals seated in Denmark must take into consideration competition law issues insofar as they are relevant to determination of the dispute and that failure to do so will expose the award to annulment or denial of enforcement on public policy grounds. This, however, only applies to private law aspects of competition law – to the exclusion of public law aspects. In a (non-published) partial award on jurisdiction rendered in an arbitration currently pending before the DIA, the arbitral tribunal declined to hear a claim based on allegations of illegal state aids under Danish and EU law, noting that such claims and issues were not private in nature and therefore not arbitrable in the sense of Section 6 of the DAA.

Finally, it should be noted that arbitration agreements in consumer contracts are not de factoinvalid under Danish law – although they are subject to closer scrutiny than contracts between peers. Under Section 7(2) of the DAA, arbitration agreements between consumers and professionals are not binding on the consumer. Furthermore, under Section 16(4) of the DAA, a consumer will only be considered to have waived the right to object if and when the consumer has been explicitly informed (by counsel, the arbitral tribunal or otherwise) that the arbitration agreement is not binding and the consumer decides to move forward with the arbitration nonetheless.

Section 16(1) of the DAA enshrines the competence-competence principle, according to which an arbitral tribunal is competent to rule on its own jurisdiction over a dispute or claim (see also 3.3 National Courts' Approach).

In the event that a case involving an arbitration agreement is only filed with the courts or is filed first with the courts and subsequently arbitration is commenced, Section 8(1)(1st sentence) of the DAA provides that the courts can assess whether or not the arbitration agreement is null and void, inoperable or incapable of being performed. If a court case is filed after an arbitration has been commenced, Section 8(1)(2nd sentence) provides that the courts can only assess whether or not the dispute or claim are capable of settlement by arbitration in the sense of Section 6 of the DAA (arbitrability).

Under Section 16(3) of the DAA, the courts may only review separate decisions by an arbitral tribunal (often in the form of a partial award) whereby it decides to uphold its own jurisdiction over a dispute or claim, provided that a request to this effect is lodged at the courts by a party within 30 days of said decision. Conversely, separate decisions whereby an arbitral tribunal declines to exercise jurisdiction cannot be brought before Danish courts.

Courts may indirectly be called upon to examine matters of jurisdiction in the context of enforcement or setting-aside proceedings under Sections 37 and 39 of the DAA, respectively.

Pursuant to Section 16(2) of the DAA, any jurisdictional plea must be made in the Answer to the Request for Arbitration at the latest, and objections raised on grounds that the arbitral tribunal is acting in excess of its mandate must be made immediately after the occurrence of the circumstances complained of.

Jurisdictional pleas cannot be invoked at the enforcement stage or as a ground for setting aside an award – unless the dispute is, by its nature, non-arbitrable in the sense of Section 6 of the DAA.

The DAA and AJA do not specify the standard of judicial review to be performed when determining questions of jurisdiction and admissibility, and there is no conclusive case law on this issue. The courts in other Scandinavian jurisdictions have generally been reluctant to override an arbitral tribunal's own assessment of its jurisdiction and it appears safe to assume that Danish courts would also favour a cautious (deferential) approach.

In any event, seeing as the courts' scrutiny, once the arbitration is pending, is confined to the issue of whether or not the matter is arbitrable, it seems highly unlikely that a court would undertake independent investigation in this regard. More likely, a court would defer to the information provided in the parties' submissions and statements of facts from the pending arbitration.

If a dispute covered by an arbitration agreement is filed with the Danish courts, they must – if a party raises a jurisdictional plea – dismiss the case without prejudice except where the arbitration agreement is null and void, inoperable or incapable of being performed (see Section 8(1) of the DAA; see also 3.3 National Courts' Approach and 5.3 Circumstances for Court Intervention).

As mentioned above (3.3 National Courts' Approach and 5.3 Circumstances for Court Intervention), once an arbitration is already pending, the review performed by the courts is restricted to the issue of the arbitrability of the subject matter of the dispute.

Parties having had a change of heart may mutually agree to waive their arbitration agreement. While there are no formalistic requirements to such a waiver, it must be deducible from the parties' unambiguous statements or conduct (for example initiating or actively participating in court litigation notwithstanding the existence of an arbitration agreement; see U1995.343 Ø). As such, a failure to object on the part of a party would not be sufficient for a court to consider that such party has waived the arbitration agreement.

The DAA does not specifically address the potentially binding effect of an arbitration agreement upon non-signatories. In general, only the signatories to a contract are bound by it. This being said, a non-signatory may sometimes be assimilated to a party, inter alia, in the case of universal succession or ancillary agreements to a main contract reassigning the rights and obligations to an entity which was not originally a party. 

Across Europe, courts have occasionally accepted "piercing the corporate veil" between a signatory and other corporate entities within the same group. This has been done when the parties' common intent that the non-signatory would also be bound by the arbitration agreement could be ascertained through the involvement of the non-signatory in the negotiation, performance and termination of the contract and/or if the third party benefited from the contract. This notion of "piercing the corporate veil" (in Danish "hæftelsesgennembrud") is also known in Denmark. However, there is not yet any conclusive practice on this issue in Danish case law in relation to the binding nature of arbitration agreements.

In relation to disputes administered by the Arbitration Board (see 1.4 Arbitral Institutions) Section 47(8) of AB 91 provides that, whenever AB 92 has been agreed between the developer and multiple contractors and suppliers, the arbitration agreement is also binding in respect of the internal relationship between such parties.

Under Section 17 of the DAA (which reflects Section 17 of the UNCITRAL Model Law with minor amendments) arbitral tribunals may order interim measures.

Section 17 of the DAA vests the arbitral tribunal with the authority to take such "provisional steps" as it deems necessary (having due regard to the nature of the matter at hand) and to order a party to put up security in connection with such steps. Considering the broad language in Section 17, arbitral tribunals may grant interim measures corresponding to those available to the regular courts under Chapter 40 of the AJA and the 2006 Model Law, ie injunctions to take or to abstain from a specific action to preserve assets and evidence etc, as well as other potential measure of an interim character.

Failing voluntary compliance, Danish law currently provides no legal basis for demanding the enforcement of such "provisional steps". For this reason, and although the arbitral tribunal may decide to penalise a non-complying party at the costs stage, parties will often prefer petitioning courts directly when an interim measure is needed, as court-based interim measures are enforceable in Denmark (and within the EU/EEA area).

The revision of the DAA will, if adopted, transcribe the 2006 UNCITRAL model provisions on interim measures into Danish law so as to facilitate the issuance and enforcement of interim measures issued directly by arbitral tribunals and avoid systematic recourse to the courts.

Under Section 9 of the DAA, parties may petition the courts directly for interim relief in accordance with the conditions set forth at Chapter 40 of the AJA.

Under Section 413 of the AJA, in order for a court to accede to a request for preliminary relief, the requesting party must demonstrate, with a sufficient degree of probability: (i) that it effectively disposes of the right or interest in respect of which protection is sought; (ii) that the measure sought is warranted by the other party's conduct; and (iii) that irreparable harm to the party and its rights may occur if the requested measure is not granted.

Under Section 414 of the AJA, the Court may deny granting interim relief if it considers that it would be disproportionately burdensome to the party against whom the measure is ordered.

Danish law takes a restrictive stance with respect to security for costs.

In proceedings before the regular courts, pursuant to Section 321 of the AJA, a court may order a claimant party to provide security for costs only if such party is from a country outside the EU/EEA. Even when this preliminary condition is fulfilled, such security may not be ordered, eg if the claimant party is domiciled in a country where a claimant party domiciled in Denmark would be exempted from providing security for cost or if there are other important grounds that security should not be granted.

Under Section 36(1) of the DAA, the arbitral tribunal may order the parties to post security to cover the arbitral tribunal's own fees and expenses, failing which the arbitral tribunal may discontinue the proceedings. As such, it is not possible to order security for costs of the other party unless the parties have otherwise agreed – for example by agreeing to arbitrate under the rules of the DIA. Indeed, Article 6(8) of the DIA Rules specifies that the arbitral tribunal may order a party to provide security for the legal costs of the other party and that failure to comply with such an order may result in the termination of the proceedings.

Additionally, Section 17 of the DAA vests arbitral tribunals with the power to take such temporary steps as they deem necessary for the conduct of the proceedings and to order a party to post appropriate security in connection therewith. A similar provision with respect to provisional measures granted by the courts is found at Section 415 of the AJA. In theory, this may also form a basis for an order for posting of security for the other party's costs.

Chapter 5 of the DAA (Sections 18 to 27) sets forth the default general rules for the conduct of the proceedings.

Subject to the principles of due process and fair and equitable treatment set out at Section 18, the DAA confers a very wide discretion to the parties and the arbitral tribunals to adapt and tailor the proceedings to their wishes and needs.

Section 19 of the DAA specifies that, in the absence of an agreement by the parties, the arbitral tribunal is at liberty to conduct the proceedings as it deems appropriate, including with respect to the method of gathering and weighing pieces of evidence (see 8.2 Rules of Evidence).

The rules of procedure set out in Chapter 5 of the DAA are not mandatory and may thus be discarded or varied by mutual agreement of the parties. The two following provisions may be of particular interest to parties arbitrating in Denmark:

Firstly, pursuant to Section 23 together with Section 25 of the DAA, a claimant must file a Statement of Claim within the time limit agreed by the parties or fixed by the arbitral tribunal, failing which the matter will be dismissed without prejudice.

Secondly, under Section 24 of the DAA, convening an in-person hearing is not obligatory but an in-person hearing must be held at the request of either party.

Under Section 19 of the DAA, arbitrators enjoy a wide discretion in the conduct of the proceedings (with respect to, inter alia, deciding the procedural steps to be completed by the parties and timetable, deciding on which evidence to admit to the record and how to weigh such evidence and issuing orders for interim relief) and their decisions are in principle binding upon the parties (pacta sunt servanda).

This being said, Danish law does not confer any coercive powers upon arbitral tribunals. Accordingly, failing voluntary compliance by the parties, decisions by an arbitral tribunal (be they in the form of procedural orders, interim orders for preliminary relief or awards) are not directly enforceable. Even arbitral awards are subject to enforcement proceedings (exequatur) before the regular courts if the losing party does not spontaneously comply. 

Furthermore, Section 12 of the DAA places prospective and acting arbitrators under a continuous obligation to remain impartial and independent of the parties and to immediately disclose any circumstances that may be of a nature to put into question their independence and impartiality. Furthermore, it follows from Section 18 of the DAA that arbitrators must act so as to safeguard the fair and equal treatment of the parties and due process in general.

Arguably, a number of other obligations can be deduced from the DAA – although they are not formulated as such – eg the obligation to conduct the proceedings in a cost-efficient manner and to decide the dispute according to the material rules agreed by the parties (if any) and generally acting within their specific mandate. There is, however, very little legal practice on arbitrators' responsibilities in the exercise of their functions and the potential civil or criminal liability of arbitrators for acts and omissions in the context of an arbitration procedure.

In the context of the proceedings taking place before the arbitral tribunal, there are no particular legal requirements to the parties' representatives/counsel. Effectively, parties may elect not to retain local counsel, or use internal/external counsel at all. However, it is generally not recommended to do so, since the approach adopted in Danish arbitration practice may differ substantially from the approach used in other jurisdictions, for instance in relation to the handling of evidence which is more pragmatic in Denmark.

However, in the context of auxiliary motions and actions before the regular courts (e.. requests for assistance with the constitution of the arbitral tribunal, interim relief or a motion to have an award set aside) it is necessary to be assisted by counsel authorised to appear before the Danish courts, ie a Danish bar-qualified lawyer (or EU lawyer admitted to practice in Denmark in accordance with EU Directive 98/5/EC of 16 February 1998).

The legal environment in Denmark shares many common features with the continental European civil law tradition. As such, the evidence-gathering phase (ie the collection of evidence from third parties and – to the extent they are willing to produce the requested evidence – the parties) in Danish arbitrations and court proceedings will often be less extensive than parties from common law jurisdictions may expect. In regular court proceedings, witness statements, to the extent that they are used, are always delivered orally at the main hearing. Cross-examination may be used in civil court proceedings. The questioning of witnesses is mostly carried out by the opposing counsel and – to a lesser extent – the judge(s). This being said, arbitrators and counsel accustomed to acting in international arbitrations will normally be open to a more flexible approach, making allowances for the preferences and legal tradition of all of the parties involved.

With respect to legal privilege, as in most other jurisdictions, individuals with a close connection to a party are exempt from giving evidence. Similarly, certain types of documents are protected by legal privilege. The general rules pertaining to witness exemption and privilege are set out at Sections 169-170 of the AJA. Notably, under Section 170(1) and (4) of the AJA, attorneys and individuals assisting them may refuse to testify on matters learned in the exercise of their profession. Furthermore, documents produced or exchanged in the context of the attorney-client relationship (work product) are protected.

There are no arbitration-specific rules applicable to the gathering and weighing of evidence under Danish law. Pursuant to Section 19(2) of the DAA, the arbitral tribunal determines which evidence shall be admitted to the legal records and how to assess its probative value.

Arbitrators are not endowed with any coercive powers under Danish law (see 7.3 Powers and Duties of Arbitrators).

Faced with a recalcitrant party or simply to enhance the probative value of the evidence submitted, the arbitral tribunal (or a party having obtained the consent of the arbitral tribunal) may, pursuant to Section 27(1) of the DAA, apply to the regular courts for assistance with securing evidence.

With respect to sanctions available to Danish courts when confronted with an unwilling party or third party believed to be in the possession of relevant information, a distinction is drawn between a party to the dispute, on the one hand, and third parties, on the other.

There is no procedure under the AJA whereby a court may compel an unwilling party to produce evidence in its custody. The only remedy available to the courts in this regard is drawing adverse inferences from the defaulting party's failure to produce the requested piece of evidence.

As to non-parties, the courts have certain sanctions at their disposal under Section 178 of the AJA. For instance, if a witness does not respond to a summons without a valid reason or without notifying the court, leaves the hearing venue or refuses to provide non-privileged information, the court may impose a fine on the witness or have the police apprehend the witness.

There is no general rule of confidentiality, and the DAA does not provide for the confidentiality of the arbitral proceedings or related material either. However, the parties usually conclude some form of confidentiality agreement before or during the arbitration – for example by adherence to specific institutional rules or by incorporating a provision to this effect in terms of reference or a procedural order.

Furthermore, most Danish legal professionals, including lawyers, are under a strict duty of professional secrecy, subject to the normal rules of civil liability.

Article 34 of the DIA Rules places the arbitral tribunal and the DIA – but not the parties or their representative – under a strict duty of confidentiality.

The formal requirements to the award are set out at Section 31 of the DAA. The award must be in writing, signed and dated by the arbitrators and state where the award was rendered (the place of arbitration). Additionally, the arbitral tribunal must set forth the reasoning underlying its decision – unless the parties have explicitly waived this requirement or have asked the arbitral tribunal to issue a consent award recording their settlement agreement in accordance with Section 35(2) of the DAA.

Danish law does not lay down any arbitration-specific limitations as to the available remedies. As such, to the extent that it is not contrary to the parties' agreement or public policy, an arbitral tribunal may award any form of relief that it deems appropriate, ranging from declaratory relief over specific performances to compensatory or liquidated damages (and grant interest on the sums awarded), etc. Punitive damages are not claimable under Danish substantive law and would likely be in contradiction with Danish public policy if ordered. Procedural injunctions – ie bans on initiating/continuing litigation or other arbitration proceedings – are generally not seen in Danish arbitration practice.

Parties to an arbitration are entitled to recover interest and costs under Danish law.

The initial determination of the costs falls to the arbitral tribunal which, pursuant to Section 34 of the DAA, fixes the costs of the arbitration, including the arbitrators' own fees and expenses. Under Section 34(3) of the DAA, the arbitral tribunal's decision in this regard may be contested before the courts within 30 days (see Section 34(3) of the DAA), ie without the need to challenge the award. Conversely, the arbitral tribunal's determination with regard to the allocation of costs can only be contested by bringing a challenge against the award.

The parties are jointly and severally liable for the costs of the arbitration. Pursuant to Section 35 of the DAA, the arbitral tribunal can decide in which proportion each party shall bear the costs, unless the parties have already agreed on the allocation. As such, pursuant to Section 35(2) of the DAA, the arbitral tribunal may require one side to cover the legal costs of the other side. Usually in Danish proceedings, the "costs follow the event", meaning that the party which prevailed on the merits will recover its legal costs. However, arbitral tribunals may (and will) also bear in mind and penalise any disruptive behaviour on the part of a party during the proceedings in forming its determination on costs. Usually, reimbursement is ordered based on the actual costs of the parties, provided that these are not deemed unreasonable by the arbitral tribunal.

The arbitral tribunal may order a party to pay interest on any sums awarded and on the costs, in accordance with the applicable law.

In Denmark, arbitration is perceived as a "one-stop shop". That is to say that the DAA does not allow any judicial review of an award as to its merits (in the context of setting-aside or enforcement proceedings, a certain review may be based on public policy considerations). It is, however, possible to contest the validity of an award or oppose its enforcement in the narrowly defined circumstances specified at sections 37 and 39 of the DAA (see 12 Enforcement of an Award).

The provisions of Sections 37 (setting aside of an award) and 39 (grounds for denying enforcement) of the DAA are mandatory, ie they cannot be contractually varied or discarded by the parties.

See 11.1 Grounds for Appeal above.

Denmark acceded to the New York Convention on the Recognition and Enforcement of Foreign Awards ("New York Convention") in 1972.

The Danish implementing act set out a reservation pursuant to Article 1(3) of the New York Convention, according to which the Convention shall not apply to the territories of Greenland and the Faroe Islands and shall only apply to the recognition and enforcement of an award rendered in the territory of another Contracting State, concerning commercial relationships. However, these reservations are no longer applicable as a matter of domestic law, which today fully incorporates the New York Convention (to this effect, see, for example, Section 38(1) of the DAA and 12.2 Enforcement Procedure and 12.3 Approach of the Courts). 

The legal framework in relation to the setting-aside and enforcement of arbitral awards does not substantively deviate from the rules in the New York Convention or the UNCITRAL Model Law.

Danish courts will enforce arbitral awards rendered in a foreign jurisdiction save where one of the grounds for denying enforcement set out at Section 39 of the DAA is met (and probably where the award in question has already been annulled by the courts at the seat - although this issue has not yet been fully settled under Danish law). These grounds are identical to those giving rise to the setting aside of an award under Section 37 of the DAA (see 12.3 Approach of the Courts).

Pursuant to Section 38(1) of the DAA, irrespective of the location of the seat, an award can be enforced in accordance with the rules set forth in the AJA.

Enforcement proceedings can be filed with the competent enforcement court (in Danish: Fogedretten), which is a division of the district court, pursuant to Chapter 46 of the AJA. Usually the competent enforcement court will be at the place where the losing party is domiciled or has his or her usual place of business.

The party seeking to have the award enforced must produce a certified true copy of the award and the arbitration agreement (provided the latter is in writing). For the time being, such documents must normally be accompanied by a certified translation into Danish.

When the seat of the arbitration is in Denmark, the courts may set aside an award or refuse enforcement on the grounds listed at Sections 37(2) and 39(2) of the DAA, which mirror the relevant provisions of the New York Convention and the UNCITRAL Model Law, ie the invalidity of the arbitration agreement itself, gross procedural defects, the non-arbitrability of the subject matter of the award, or incompatibility of the award with public policy provisions.

The lists in Sections 37 and 39 are exhaustive and are generally very narrowly construed. Accordingly, annulment or denial of enforcement on public policy grounds is a very rare occurrence and the threshold for incompatibility is set very high. For example, in the 2016 judgment U.216.1558/2H referenced above (5.1 Matters Excluded from Arbitration), the Danish Supreme Court clarified that in order for the award to be annulled on public policy grounds (in that instance on account of an arbitral tribunal's alleged misapplication of competition law rules) the arbitral tribunal's ruling must be "grossly erroneous" so as to be "evidently incompatible with public policy". The Supreme Court held that it is not in itself sufficient that the decision is contrary to mandatory rules. 


Amerika Plads 37

+45 33 12 11 33

+45 33 12 00 14
Author Business Card

Law and Practice


Plesner 's offices are located in Copenhagen, overlooking Copenhagen Harbour and the Baltic Sea, and house around 440 employees, including 265 lawyers (fee earners). Plesner's Arbitration and Litigation groups are the largest in Denmark comprising more than 70 lawyers in total (including junior associates) and covering all commercial practice areas. Plesner is the Danish market leader within several specialised fields such as International Arbitration, Tax Litigation, IP Litigation, Competition Law Litigation, Insurance Litigation, Bankruptcy Litigation, as well as Telecoms, and Plesner is second to none within Construction Law Arbitration and other arbitration and litigation areas such as M&A, Professional Liability, Banking and Finance, and Employment Law.


Select Topic(s)

loading ...

Please select at least one chapter and one topic to use the compare functionality.