International Arbitration 2023 Comparisons

Solving legal disputes before a tribunal outside the state-established court system has been accepted and recognised in Denmark for centuries. However, the use of arbitration as a method for dispute resolution has grown in popularity since the enactment of the first comprehensive act regulating arbitration in 1972. The possibility of confidentiality, the ability for the parties to influence the appointment of arbitrators, the expediency of proceedings, the finality of the arbitration award, the expertise of the arbitrators and global enforcement opportunities are some of the main factors driving this increased popularity, particularly in relation to commercial disputes.

International arbitration in Denmark is most prevalent in disputes between professional parties, where one of the parties is domiciled in Denmark and the other parties involved are from other countries, but as of 2022 we have seen an increase of pure international cases with no Danish parties referred to arbitration under Danish law pursuant to the rules of the Nordic Offshore and Maritime Arbitration Association.

An arbitration agreement is also found in many of the agreed documents most commonly used in Denmark. For instance, most agreements regarding construction projects refer to arbitration, as these agreements often refer to agreed documents (the general conditions for consulting services for building and construction works from 2018, known as ABR 18, or general conditions for building and construction works and supplies from 2018, known as AB 18), where arbitration is the default dispute resolution option.

Statistics regarding the use of arbitration in general are not available in Denmark. However, the DIA posts statistics of the cases filed with it. Currently, the latest statistics published by the DIA for 2021 show that the most dominant sectors are telecommunications and information technology, commerce, transport, finance and insurance, and construction, while the remaining cases are spread across a variety of industries.

Divided into subject matters, the statistics indicate that the largest categories are shareholders’ agreements, M&A, co-operation agreements and real estate/property. Approximately one third of the cases commenced at the DIA in 2022 are characterised as international arbitration. Naturally, international arbitration cases would be most common in industries with prevalent cross-border activities, engagements, etc.

From our experience, we have not seen particular industries which are experiencing decreased international arbitration activity as a result of the COVID-19 pandemic.

The DIA has existed as an institution for arbitration since 1894. The DIA in its current form was created as a non-profit, self-governing institution in 1981. In contrast to sector-specific institutions, the DIA adjudicates cases in a wide variety of sectors. The DIA has prepared the DIA Rules for arbitration procedures, with the latest version being in force as of 13 April 2021.

The Danish Building and Construction Arbitration Board (the “Arbitration Board”) oversees the vast majority of arbitral disputes in the construction sector. Along with its predecessors, AB 18 is the most commonly used document in agreements concerning the building and construction sector. AB 18 contains an arbitration clause referring to the Arbitration Board as the dispute resolution institute. While dispute resolution before the Arbitration Board is categorised as arbitration in the sense of the Danish Arbitration Act of 2005 and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the proceedings deviate from international arbitration in relation to the opportunity and custom of appointing technical arbitrators instead of legal arbitrators. Arbitrators with a legal background are, as a rule, appointed from a committee consisting of judges from the High Courts and the Supreme Court, while arbitrators with a professional background in the field of conflict are proposed by the Secretariat of the Arbitration Board.

Institutions of international character, such as the International Chamber of Commerce, are also occasionally used by Danish parties.

Finally, since 2022 we have seen an increase in cases being referred to arbitration pursuant to the Nordic Offshore and Maritime Arbitration Association.

There are no specific courts that are designated to hear disputes relating to international or domestic arbitrations. In the Danish civil court system, matters pertaining to international arbitrations and/or domestic arbitrations of commercial disputes would proceed at the ordinary national courts.

The central statute governing arbitral proceedings is the Danish Arbitration Act of 2005 (DAA). The DAA applies when the arbitration is seated in Denmark, and it does not differentiate between national arbitration (ie, arbitration without international affiliation) and international arbitration (ie, arbitration with international affiliation): see Section 1(1) of the DAA. Some of the provisions of the DAA also apply when the place of arbitration is a foreign country, or when the place of arbitration has not yet been determined: see Section 1(2) of the DAA. The DAA reflects, to a large extent, the 1985 version of the UNCITRAL Model Law.

One deviation of the DAA from the Model Law is the scope of application. The DAA also applies in cases of national arbitration and in cases of non-commercial arbitration.

The DAA contains a number of provisions referring to the national courts. Proceedings at the national courts are regulated by the Administration of Justice Act (AJA). Hence, the proceedings will also be subject to this Act if the national courts are engaged.

If institutional arbitration is chosen, the arbitral proceedings will be subject to the rules in force at that particular institution. An example of this is the DIA Rules that regulate the proceedings that take place at the DIA. If the proceedings are filed with the DIA, the arbitration is governed by the DIA Rules and, where the rules are silent, by any other rules of the parties or, failing that, by rules decided by the tribunal: see Article 28(2) of the DIA Rules.

No recent changes have been made to the DAA.

The latest major change in regulatory arbitration rules was in 2021 when the DIA Rules were changed. The new DIA Rules entered into force on 13 April 2021, replacing the 2013 DIA Rules. The new DIA Rules were formulated in accordance with the standards of Danish and international arbitration practice.

Neither the DAA nor Danish contract law in general stipulates that the arbitration agreement must meet certain formal requirements. Thus, there are no formal legal requirements for an arbitration agreement to be enforceable. An oral agreement may also suffice, although such an agreement may be difficult to prove and thereby uphold. An arbitration agreement based on the parties’ unequivocal behaviour, such as failure to object throughout the proceedings, can also be considered binding for the parties.

However, pursuant to Section 7 of the DAA, arbitration agreements regarding disputes not yet arisen must relate to a specific, concretised legal relationship.

An arbitration clause in a consumer contract is not binding on the consumer when the agreement is concluded prior to the dispute (see 5.1 Matters Excluded From Arbitration).

Pursuant to Section 6 of the DAA, it is a principal rule that arbitration can be agreed for disputes relating to subject matters that the parties have an unrestricted right to dispose of. For some matters, specific statutory provisions establish that these cannot be subject to arbitral agreements; eg, disputes regarding a residential lease cannot be subject to an arbitration agreement.

Disputes pertaining to matters of law protecting interests of public policy are also generally non-arbitrable. In these cases, the public interests outweigh the contractual autonomy of the parties. It is possible for public authorities to enter into arbitration agreements when the authority does not act in its capacity of public authority but, for instance, enters into contracts regarding construction of a building.

A list of non-arbitrable subject matters is not set out in the DAA. The question of arbitrability is determined on a case-by-case basis by the arbitral tribunal. Disputes pertaining to public law are not, per se, non-arbitrable. Thus, the approach to be applied largely depends on the specific circumstances of the case and the interests of that particular legal area.

The considerations that in many other countries have led to the requirement that arbitration agreements must be in written form have traditionally been handled in Danish law by the courts imposing relatively strict requirements for the adoption of an arbitration agreement, and the courts have traditionally imposed a restrictive line when determining the disputes covered by an arbitration agreement. However, there is some debate as to whether this traditional approach is still being practised by the national courts. Regardless, the courts’ assessment and interpretation of an arbitration agreement will largely depend on the specific circumstances of the case (namely the wording and context of the agreement).

When a valid arbitration agreement is in force, the national courts are confined to specific issues explicitly mentioned in the DAA: see Section 4 of the DAA. These issues include assisting in appointing arbitrator(s) (Section 11(3)), securing and obtaining evidence (Section 27), setting aside the award (Section 37), and refusing recognition or enforcement of the award (Section 39).

Pursuant to Section 8(1) of the DAA, the courts' jurisdiction is limited if a matter submitted before the Danish national courts but subject to a valid arbitration agreement (see 5.3 Circumstances for Court Intervention). The case must, at a party’s request, be dismissed by the court, unless the arbitration agreement is invalid or the arbitration cannot be completed due to other reasons.

If the subject matter is arbitrable and the arbitration agreement is otherwise in conformity with Danish contract law, the national courts will enforce the agreement.

According to the doctrine of separability set out in Section 16(1) of the DAA, the examination of the validity of an arbitration clause is to be done separately and detached from a review of the main agreement. Thus, the arbitral tribunal may uphold the arbitration agreement’s validity even if it finds the main agreement in which the arbitration agreement is contained invalid.

The DAA does not contain provisions restricting the parties when selecting the arbitrators. Unless the parties’ agreement (or any institutional rules) provides otherwise, the parties are free to select whomever they find suitable as an arbitrator. Although there are no direct restrictions for the parties when selecting arbitrators, the individual to be appointed arbitrator must still fulfil the general requirements of impartiality and independence.

The DIA Rules contain specific rules on the appointment of arbitrators, including rules on impartiality, disclosure obligations for previous appointments by the parties or their legal advisers, country and domicile (in international arbitration cases). Article 18(2) of the DIA Rules stipulates that the president of the tribunal, or a sole arbitrator, shall hold a law degree. Further, all appointments of arbitrators are subject to confirmation by the Chair’s Committee of the DIA: see Article 19(1) of the DIA Rules.

The DAA contains provisions that regulate the selection process to be applied as default if the arbitral tribunal cannot be established in accordance with the procedure set out in the parties’ agreement or if the parties have not agreed on this issue. Following Section 11(2) of the DAA, if the arbitration agreement does not set out the procedure of constituting the arbitral tribunal, the tribunal shall consist of three arbitrators. Each party shall appoint one arbitrator within 30 days of a request to do so from the other party. The two arbitrators appointed shall engage the third arbitrator, who shall act as president of the tribunal.

If the arbitral proceedings are filed with the DIA, the dispute is to be decided by a sole arbitrator if the parties have not agreed upon the number of arbitrators; see Article 18(1) of the DIA Rules. In special circumstances, however, a panel of three arbitrators can be decided upon.

In respect of the selection of arbitrators in the case of multi-party arbitrations, there is no default procedure that applies, ie, unless otherwise agreed.

As mentioned above, it is the main rule that the selection of the arbitrators is subject to the agreement of the parties without intervention from the courts. However, the courts can become involved at the request of a party: see Section 11(3) of the DAA.

If the arbitral tribunal cannot be successfully constituted, a party may request the courts to appoint the arbitrator not appointed. Section 11(3) of the DAA applies if the arbitral tribunal cannot be constituted in accordance with the procedure agreed by the parties or (in the absence of such agreement) in accordance with the default rules mentioned in 4.2 Default Procedures.

In appointing an arbitrator, the courts shall have regard to any qualifications required of the arbitrator by the agreement of the parties. The courts must also ensure that the arbitrator to be appointed is impartial and independent of the parties. This provision establishing the constitutive competence of the national courts cannot be derogated from by agreement between the parties: see Section 2(2) of the DAA.

According to Section 13(1) of the DAA, it is the principal rule that the procedure for challenging an arbitrator is to be decided freely by the parties. The DIA Rules contain provisions establishing that a challenge of a selected arbitrator is to be decided by the DIA.

If the parties’ agreement does not regulate the procedure for challenging an arbitrator, Section 13(2) of the DAA applies as a default. According to this provision, a party that intends to challenge an arbitrator must send a written statement of the reasons for the challenge to the arbitral tribunal within 15 days after becoming aware of the constitution of the arbitral tribunal and of the circumstances on which the challenge is based. The grounds for a challenge can be that the challenged arbitrator is not impartial or independent, or does not possess the qualifications or characteristics specified in the parties’ agreement. The arbitral tribunal shall decide on the challenge, unless the challenged arbitrator voluntarily resigns from the position or the other party agrees with the challenge. If the arbitral tribunal rules that the challenge is unfounded, the challenging party may, within 30 days, request the national courts to decide on the challenge: see Section 13(3) of the DAA.

Filing a challenge against an arbitrator will extend the overall timeframe of the proceedings in most cases, since such challenges often suspend the proceedings until the challenge has been settled.

If the arbitral proceedings are filed with the DIA, a challenge of arbitrators must be submitted to the secretariat of the DIA within 15 days after having become aware of the appointment and the circumstances on which the challenge is based: see Article 21(1) of the DIA Rules. The Chair’s Committee of the DIA decides on the challenge: see Article 21(3) of the DIA Rules.

Following Section 12 of the DAA, arbitrators must be impartial and independent. An individual approached to be appointed as an arbitrator as well as acting arbitrators shall disclose any circumstances likely to give rise to justifiable doubts as to their impartiality or independence. This includes personal or economic relations with either party or previous appointments by either of the parties.

With inspiration from Sections 60–61 of the AJA, which concern the disqualification of judges at the national courts, the approach applied is a case-by-case assessment. For international arbitration in particular, the Guidelines on Conflicts of Interest in International Arbitration from the International Bar Association have had some importance in determining the requirements of impartiality and independence.

For proceedings filed at the DIA, it follows from Article 20 of the DIA Rules that any individual appointed as an arbitrator must be available, impartial and independent. Similarly to the DAA, the individual must inform of any matters that may give rise to legitimate doubts as to their accessibility, impartiality or independence.

For proceedings carried out by the Arbitration Board, arbitrators must disclose any matters that may cast doubt over their impartiality or independence: see Section 6(3) of the Arbitration Board’s Rules on arbitration.

As stated in 3.2 Arbitrability, there is no list of non-arbitral subject matters and the assessment of arbitrability is done on a case-by-case basis (see also 3.3 National Courts’ Approach).

As a general rule, fields of law traditionally concerned with public policy - such as family law and criminal law, the grant of patents and other IP rights, and the grant of citizenship - are jurisdiction-exclusive to the national courts.

Arbitration clauses in a consumer contract are not, per se, invalid. However, an arbitration agreement concluded before the dispute arose is not binding on the consumer: see Section 7(2) of the DAA. A consumer has only waived the right to plead that the arbitration agreement is non-binding if they proceed with the arbitration after being informed that the arbitration agreement is non-binding.

In the first instance, the arbitral tribunal will rule on its own competence. The arbitral tribunal will, in particular, consider whether a binding arbitration agreement covering the dispute is in place between the parties. It is also a prerequisite for the arbitral tribunal’s competence that the subject matter of the dispute is arbitrable. This principle of competence-competence follows from Section 16(1) of the DAA, or Article 25(1) of the DIA Rules (see 3.4 Validity).

If the action addressing issues of jurisdiction is filed with the national court before arbitration is commenced and the dispute is subject to an arbitration agreement, the courts can only assess whether the arbitration agreement is null and void, inoperative or incapable of being performed. This limitation for the courts follows from Section 8(1) of the DAA. If the action is brought before a national court after the commencement of arbitral proceedings, the court is further limited to ruling on the jurisdiction of the arbitral tribunal only in respect of whether the subject matter of the dispute is capable of settlement by arbitration: see Section 8(1).

The national courts can also become involved when the arbitral tribunal has ruled on its own jurisdiction in a decision separate from the final award. If it is preliminarily ruled by the arbitral tribunal that it has jurisdiction, any party may, within 30 days after having received notice of that ruling, request the national courts to review the decision of the arbitral tribunal upholding its own jurisdiction: see Section 16(3) of the DAA.

Ultimately, the national courts can invalidate an arbitral award containing decisions on matters beyond the scope of the arbitration agreement since this is one of the explicit grounds on which an award may be set aside: see Section 37(2), No 1(c) of the DAA.

Under Section 8(2) of the DAA, if an action is brought at the court after the commencement of the arbitral proceedings, the court can rule on the jurisdiction of the arbitral tribunal only in respect of whether the subject matter of the dispute is arbitrable.

According to Section 16(2) of the DAA, it is the principal rule that a submission regarding the arbitral tribunal not having jurisdiction must be submitted no later than the submission of the statement of defence. A submission that the arbitral tribunal is exceeding the scope of its authority shall be submitted as soon as possible after the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. Similarly, it also follows from Article 25(2) of the DIA Rules that objections to the jurisdiction of the tribunal must be raised no later than the statement of defence.

A submission concerning the arbitral tribunal not having jurisdiction cannot be invoked in the enforcement process of the arbitral award, unless the subject matter of arbitration was non-arbitrable in the first place, as set forth in Section 6 of the DAA: see Section 16(4).

As mentioned in 3.3 National Courts' Approach, the DAA includes limitations as to the national courts' availability to review disputes subject to an (valid) arbitration agreement: see Section 8(1) of the DAA. The standard of judicial review for jurisdiction to be employed is not specified in the statutory provisions of Danish law. There is no conclusive case law on the standard to be applied. Thus, it is a case-by-case assessment to be performed dependent on the specific circumstances of the case.

Traditionally, the Danish courts have been reluctant to set aside decisions from an arbitral tribunal. A national court will most likely be reluctant to set aside a decision from the tribunal ruling on its own jurisdiction.

As mentioned in 3.3 National Courts’ Approach, the national courts must dismiss the case if a dispute covered by an arbitration agreement is filed with the national courts and impose costs on the losing party. Naturally, this does not apply if an arbitration agreement is found null and void, inoperable or incapable of being performed.

As the parties can agree to enter into an arbitration agreement, the same parties can also agree to waive the agreement and proceed at national courts or through other means of dispute resolution. If a dispute is filed with the national courts regardless of whether the dispute is subject to an arbitration agreement, the national court will generally not raise the question of breach when the parties do not raise any objection against the jurisdiction of the court.

The arbitral tribunal generally does not have competency to assume jurisdiction over third parties that have not signed or entered into the arbitration agreement. However, third parties may sometimes be assimilated to a party bound by the arbitration agreement, such as in cases of universal succession (see 13.5 Binding of Third Parties).

It has been debated whether this principal rule - ie, that only signatories of the agreement are bound by the agreement - is modified by a decision from 2014 issued by the Danish Supreme Court. In this case (U 2014.2042 H), the court ruled that the claim between two parties with no direct contractual relationship (and thus no arbitration agreement between them either) was to be resolved through arbitration, since the agreements of each party contained an arbitration clause that allowed such interpretation. The agreements of each link contained reference to the same agreed document and, hence, the same arbitration clause.

In relation to disputes governed by the Arbitration Board, Section 69(7) of AB 18 provides that when AB 18 (or its predecessor, AB 92) applies to the relationship between the employer and several parties (contractors, suppliers), the arbitration agreement shall apply to the inter-relations between such parties.

If a party so requests, the arbitral tribunal can order any party to take such interim measures of protection as the arbitral tribunal deems necessary in respect of the circumstances of the dispute: see Section 17 of the DAA. However, if a party does not comply with such order from the arbitral tribunal, there is no legal basis providing for the enforceability of the interim measures of protection ordered by the tribunal. To ensure enforceability, the party must engage the national courts (see 6.2 Role of Courts).

In the majority of the arbitration cases taking place in Denmark, the types of interim relief that the tribunal considers are typically injunctions and actions preserving assets and evidence corresponding to those employed by the national courts (ie, the types found in the AJA).

In arbitral proceedings with the DIA, the tribunal can, upon a request from a party, order another party to take such interim measures as the tribunal considers necessary: see Article 36 of the DIA Rules.

The Role of Courts

Pursuant to Section 9 of the DAA, an arbitration agreement does not prejudice a party from petitioning the national courts for preliminary or interim measures in accordance with the provisions found in the AJA.

The courts may order an injunction if the following circumstances are shown to be sufficiently probable or proven by clear and convincing evidence:

• that the party holds the right for which protection by way of an injunction is sought;
• that the conduct of the opposing party requires the granting of the injunction; and
• that the ability of the party to enforce its right will be lost if the party has to await a full trial.

Further, the courts can deny the grant of an injunction if the damage or inconvenience caused to the counterparty is manifestly disproportionate to the interests supporting such injunction.

Section 9 does not only apply when the seat of the arbitration is in Denmark but also if the place of arbitration is in a foreign country or if it has not yet been determined where the arbitration is taking place: see Section 1(2) of the DAA. Where the parties cannot agree that Section 9 is not applicable, see Section 2(1) of the DAA.

Types of Relief

Subject to the provisions in the AJA, the types of reliefs that the national courts can grant are, eg, injunctions and actions preserving assets and evidence, for instance, in the case of infringement of IP rights.

Danish statutory law does not contain provisions specifically relating to the use of emergency arbitrators. However, as no statutory provisions preclude the use of emergency arbitrators, the parties can, in their arbitration agreement, decide to explicitly allow the use of emergency arbitrators.

Article 48 of the DIA Rules allows for the appointment of an emergency arbitrator where the taking of evidence or interim measures cannot await the confirmation of the “permanent” arbitrator(s). Such procedures are further regulated in Appendix 3 to the DIA Rules.

Pursuant to Section 36(1) of the DAA, an arbitral tribunal can order the parties to provide security for the fees and expenses of the tribunal. In most cases, such security will be ordered by the tribunal or the institution at which the arbitration is being conducted. It is the discretion of the arbitral tribunal to determine the nature and extent of the security. Unless agreed otherwise, the arbitral tribunal cannot order security for a party’s costs to the other party. If the parties have agreed to use, eg, the DIA Rules, the arbitral tribunal can order a party upon request to provide security for the other party’s costs: see Article 12(3) of the DIA Rules.

Specifically in relation to instances where the arbitral tribunal requires a party to take interim measures (see 6.1 Types of Relief), it further follows from Section 17 of the DAA that the arbitral tribunal can require any party to provide appropriate security in connection with such measures. The arbitral tribunal can decide that such security is a condition for employing the requested interim measure.

In proceedings at the national courts filed by a plaintiff not domiciled in the EU/European Economic Area, the courts may order a party to provide security for costs. However, security cannot be ordered by the courts when the plaintiff is domiciled in a country where such security will not be ordered for plaintiffs from Denmark.

Specifically in procedures of interim measures before the national courts, the court may provide the interim relief conditional on the party establishing security for any detriment and disadvantage inflicted on the opposing party.

Rules and Provisions Governing Arbitration

Chapter 5 (Sections 18–27) of the DAA contains provisions governing the procedure of arbitration. Save for those specified in 7.2 Procedural Steps, the provisions in this chapter apply as default if the parties have not agreed otherwise. In the absence of agreement between the parties, it follows from Section 19(2) that the arbitral tribunal is vested with a wide discretion to conduct the proceedings in the manner it considers appropriate.

Section 20 of the DAA relates to the place of arbitration. If the place is not determined by the parties’ agreement, the arbitral tribunal decides the place having regard to the circumstances of the case.

If it follows from the arbitration agreement that arbitral proceedings are to be filed at a specific institution, the rules of the institution will govern the procedure of the arbitration. Eg, if the proceedings are filed with the DIA, the place of arbitration is Copenhagen, unless otherwise agreed between the parties: see Article 27 of the DIA Rules.

Commencing Arbitration

If the parties have not agreed otherwise, it follows from Section 21 of the DAA that the arbitration commences when a written request for arbitration is received by the respondent.

If the proceedings are filed with the DIA, it follows from Articles 4(1) and 4(2) that a statement of claim must be submitted to the DIA and the date on which the DIA receives this statement of claim is the date on which the arbitration case is considered commenced. The statement of claim shall be submitted to the DIA in the language which the parties have agreed, and in the absence of such agreement, or if there is otherwise disagreement between the parties regarding the language, the statement of claim shall be submitted in the language that is used in the parties’ arbitration agreement: see Article 5 of the DIA Rules.

Language

If the language of the arbitration is not agreed by the parties, the language of the arbitration is to be decided by the arbitral tribunal: see Section 22 of the DAA.

Filing of Statement of Claim/Defence

Section 23 of the DAA relates to the filing of a statement of claim and statement of defence, while Section 25 of the DAA concerns instances where the claimant or defendant (without showing sufficient cause) fails to submit a statement of claim/defence, does not attend hearings or fails to produce documentary evidence.

Oral Hearings

Section 24 of the DAA relates to the question of oral hearings. If requested by a party, the tribunal must hold such hearings. Otherwise, the proceedings can be decided conducted on a written basis.

With the exception of Sections 18 and 27, the provisions in Chapter 5 of the DAA only apply when the parties have not agreed otherwise. See also 7.1 Governing Rules.

Section 18 of the DAA sets out the basic principles of equal treatment of the parties and the right for each party to fully present its case. These principles must be respected by the arbitrators.

Furthermore, pursuant to Section 27(1), which the parties cannot derogate from, the arbitral tribunal or a party with the approval of the arbitral tribunal can request the national courts’ assistance in taking evidence in accordance with the provisions of the AJA. This can, inter alia, be relevant if a witness is unwilling to give testimony before the tribunal (see 8.3 Powers of Compulsion). Section 27(2) allows the arbitral tribunal to request the national courts for a referral to the Court of Justice of the European Union (CJEU) if such ruling from the CJEU is necessary to enable the arbitral tribunal to issue the award.

Under Section 19 of the DAA, the arbitrators enjoy a wide discretion to conduct the proceedings in the way they see fit. According to Section 19(2) of the DAA, it is explicitly stated that the power vested in the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

It follows from Section 18 of the DAA that it is the duty of the arbitrators to ensure equal treatment of the parties as well as to ensure that each party is given a fair opportunity to present its case. In accordance with Section 12, arbitrators must also be impartial and independent. Both prospective and acting arbitrators are under a duty to remain impartial and independent of the parties and must disclose any circumstances likely to give rise to justifiable doubts as to their impartiality or independence.

In arbitral proceedings, there are no statutory provisions outlining particular qualifications or other requirements for legal representatives for arbitration cases. A party can (although this is not recommended in most cases) decide not to assume legal counsel at all.

However, there are legal requirements for representatives acting on behalf of their clients before the regular courts in Denmark. As a main rule, a legal representative must be a Danish Bar-qualified lawyer (or EU lawyer admitted to practice in Denmark) in order to appear before the national courts.

While it is to a large extent possible for the parties to customise the proceedings in the way they would like, arbitration in Denmark is often conducted in a uniform manner. It is the principal rule that the parties themselves are responsible for collecting and submitting the evidence they consider relevant and necessary for the case. If relevant, the parties can also agree on the factual circumstances to be assumed by the arbitral tribunal in considering its award.

In terms of collecting evidence, a party can request disclosure of documents from the other party. If the disclosure order by the tribunal is not complied with, the tribunal can choose to apply adverse inference to the disadvantage of the non-complying party. The courts cannot force disclosure upon a party to the case. It is, however, possible to request assistance from the courts to force disclosure upon a third party.

The use of written witness statements in arbitration cases has become widely prevalent, particularly in international arbitration cases, through the influence from the procedures used in international arbitration cases, including the International Bar Association rules. This is, in particular, applicable for cases before the DIA. The parties also commonly submit separate reports from experts. The tribunal can also instigate a process involving a neutral expert not engaged directly by either of the parties, much like the process usually followed by the national courts when obtaining expert appraisal: see, for example, the DIA Rules, Article 35.

Section 19(2) of the DAA establishes the arbitral tribunal’s free discretion when assessing and weighing the evidence presented to it. Hence, the arbitral tribunal can, inter alia, decide which documents or other pieces of evidence are to be included and which are to be excluded as irrelevant. This principle can, however, be derogated from by agreement between the parties.

Arbitrators are, under Danish law, not vested with powers of compulsion to order the production of documents or require the attendance of witnesses.

The provisions found in the AJA stating the duty to give evidence and the powers of compulsion if a witness refuses to testify are not applicable for an arbitral tribunal. Further, a false testimony given by a witness (or a party) under arbitration is not punishable pursuant to Section 158 of the Criminal Code, but instead as lawsuit fraud. If coercive powers are necessary in order to make a witness testify or if it is found desirable that the testimony is subject to criminal liability, the arbitral tribunal can, pursuant to Section 27 of the DAA, request the national courts’ assistance in taking evidence. While it is the principal rule that everyone has the duty to give testimony before the national courts, this rule is not without exceptions. For instance, individuals closely related to a party do not have such duty.

Additionally, the arbitral tribunal can order any party or third party to produce certain documents that are (or are believed to be) under its disposal. However, the arbitral tribunal does not have any coercive powers in the event of non-compliance. In such cases, the arbitral tribunal can refer to the national courts and request assistance in securing the evidence. In accordance with the provisions found in the AJA, the national courts only have coercive powers if the unwilling subject is a third party.

It is the most common view that there are no general rules in Danish law asserting that arbitral proceedings or materials from arbitral proceedings are confidential. Following this view, the parties are not necessarily obliged to keep confidentiality regarding the case. In practice, hearings are mostly not held with free access for the public. Further, the parties are free to enter into an agreement according to which they undertake a duty of confidentiality. The extent of the confidentiality will then depend on the terms of the parties’ agreement.

If the arbitral proceedings are filed with the DIA, it follows from Article 28(4) of the DIA Rules that the arbitral tribunal can (if requested by a party) decide that the proceedings be kept confidential. Additionally, the tribunal can take measures to protect trade secrets and confidential information.

Proceedings at the Arbitration Board are confidential except for the award, which the Arbitration Board can choose to publish in anonymous form if the parties do not object thereto: see Section 43 of the Rules of the Arbitration Board.

Section 31 of the DAA establishes that the award must be in written form and signed by the arbitrators (or by the majority of the arbitrators). The award must be provided with the date and place as well. In addition, the award must state the reasons on which it is based, unless the parties have agreed otherwise or the parties have asked for a consent award; for example, in cases where a settlement agreement has been reached.

Article 39 of the DIA Rules outlines similar requirements for the form and content of the award.

The DAA contains no explicit time limits on the delivery of the award. If the arbitration takes place at the DIA, it is a fundamental principle that the arbitral tribunal ensures that the arbitration is conducted within reasonable time and in an efficient and cost-conscious manner: see Article 28(1) of the DIA Rules. Further, it follows from Article 39 of the Rules that the award must be submitted by the arbitral tribunal as soon as possible after the conclusion of the oral hearings and, if possible, no later than six months from when the case was referred to the tribunal by the secretariat of the DIA.

It follows from Section 25(2) of the Rules of the Arbitration Board that the arbitral tribunal must deliver the award as early as possible and, in so far as possible, no later than four weeks after the hearing is concluded.

There are no general limitations in Danish law as to the types of remedies that an arbitral tribunal can award. Unless the parties have agreed otherwise, the arbitral tribunal may award any remedy it finds appropriate. However, the legitimacy of remedies contrary to public policy may be questionable.

In order for the award to be enforceable at the national courts, the conclusion of the award must be clear.

The parties are, under Danish law, entitled to recover interest and legal costs.

Following Section 34 of the DAA, the arbitral tribunal determines its own fees and the settlement of its expenses unless the parties and arbitrators have agreed otherwise. The parties are jointly and severally liable for the costs of the arbitral tribunal (see also Article 42 of the DIA Rules). With reference to Section 35 of the DAA, the arbitral tribunal can allocate which proportion of its costs each party shall bear. Within 30 days after having received notice of the costs, any party may request the national courts to review the determination of the costs of the arbitral tribunal: see Section 34(3) of the DAA. This possibility for a party to petition the national courts to review the determination of the costs cannot be derogated from by agreement: see Section 2(2) of the DAA.

In most cases, the losing party will, in the award, be required to bear (some of if not all) the legal costs of the winning party. However, the exact amount of legal costs recoverable for the winning party from its counterparty is at the discretion of the arbitral tribunal. There has in recent years been a growing tendency towards awarding legal costs closer to the actual amounts paid by the parties.

When arbitral proceedings are filed with the DIA, Article 40(1) of the DIA Rules stipulates that the award shall state the costs of the arbitration and the proportion in which the costs are to be borne by the parties. The costs of the arbitrators are determined on the basis of an appendix to the Rules: see Article 41 and Appendix 2 to the DIA Rules. Furthermore, the award shall determine whether a party shall compensate the other party for reasonable costs, including legal costs: see Article 40(3) of the DIA Rules.

It is the principal rule in Denmark that arbitral awards are unappealable. However, the national courts can, pursuant to Section 37 of the DAA, set aside an arbitral award or, with reference to Section 39, refuse recognition or enforcement of an award. Contest of the validity of an award or refusal of its enforcement can only be done in accordance with the grounds specified in each section (see 12.2 Enforcement Procedure). The specific grounds listed in Sections 37 and 39 largely overlap.

The parties can agree that an arbitral award is appealable. Such agreement will derogate from the principal rule (see 11.1 Grounds for Appeal). The parties cannot agree that Section 37 (grounds for setting aside the award) or Section 39 (refusing recognition or enforcement of the award) is not applicable: see Section 2(1) of the DAA.

As mentioned in 11.1 Grounds for Appeal, the national courts can, under specific circumstances, contest the validity of an arbitral award or refuse recognition or enforcement of the award. The grounds on which an arbitral award according to Sections 37 and 39 of the DAA may be contested or recognition/enforcement refused are very narrow.

Denmark adopted the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) by ratifying the Convention in 1972. Previously, the Danish implementing act set out a reservation to the applicability of the Convention. Today, however, the domestic law fully incorporates the Convention.

Enforcement Procedure

The matters of recognition and enforcement of awards are governed by Chapter 9 (Sections 38 and 39) of the DAA, which does not deviate substantively from Articles 35 and 36 of the UNCITRAL Model Law. The parties cannot agree to derogate from the applicability of these rules: see Section 2(1) of the DAA.

Subject to Section 39, an arbitral award is recognised as binding and is enforceable in accordance with the provisions regarding enforcement of judgments of the AJA irrespective of the country in which it was made. This applies regardless of whether the award is made in a country that has acceded to the New York Convention.

According to Section 39 of the DAA, enforcement of an arbitral award may, at the request of a party, be refused if that party provides sufficient evidence that:

• a party to the arbitration agreement was under some form of incapacity, or the said agreement is not valid;
• the party against which the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case;
• the award deals with a dispute not contemplated by or not falling within the terms of the arbitration agreement, or it contains decisions on matters beyond the scope of the submission to arbitration;
• the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or with the law of the country where the arbitration took place; or
• the award has not yet become binding on the parties or has been set aside or suspended.

Furthermore, the court can refuse the enforcement of the arbitral award if the court finds that the subject matter of the dispute is not capable of settlement by arbitration under Danish law, or the recognition or enforcement of the award would be manifestly contrary to the public policy of this country.

Commencing Enforcement Proceedings

Enforcement proceedings can be commenced by filing at the competent enforcement court (in Danish: Fogedretten) in accordance with Chapter 46 of the AJA. The competent enforcement court will generally be where the losing party is domiciled or has its usual place of business.

A party applying for enforcement of an arbitral award must supply the court with a duly certified copy of the award and of the arbitration agreement if the agreement is in writing. The documents shall, if necessary, be accompanied by a duly certified translation into Danish.

A proceeding for setting aside an arbitration award will most likely not suspend enforcement. Enforcement may, however, be suspended if well-supported reasons can be provided, eg, if it is assessed that there is a certain probability that the proceeding will lead to setting aside the arbitration award.

The list of grounds for the courts to refuse enforcement in Section 39 is exhaustive, and the grounds are generally construed narrowly by the courts. It is the primary rule that it is without relevance whether the court responsible for the enforcement agrees with the assessment of the arbitrators.

The DAA does not contain provisions that allow for class-action arbitration or group arbitration.

Articles 15–16 of the DIA Rules allow for consolidating various claims between the same parties under the same arbitration case or joinder of third parties (see 13.4 Consolidation). Arbitration cases before the Arbitration Board very often have several parties (see 5.7 Jurisdiction Over Third Parties).

Danish Bar-qualified lawyers acting as legal counsels in arbitration must act in accordance with the ethical codes generally applicable for lawyers. For instance, it follows from Section 12.3 (from September 2022, Section 9) of the Code of Conduct for the Danish Bar and Law Society that a lawyer may not act as an arbitrator if they have previously acted for or advised any parties as their representative in matters connected with the dispute at issue. Similarly, after having acted as an arbitrator, the lawyer may not act for or advise any of the parties as their representative in matters pertaining to the dispute at issue.

It is still a relatively rare phenomenon in Denmark that equity funds, investment banks or other third parties fund litigation against a share of the possible outcome of the case but the trend is certainly on the rise. There are no general rules or restrictions on third-party funding in arbitration, but there is a duty of disclosure of the funder (see 2.2 Changes to National Law).

Whether an arbitral tribunal can consolidate separate arbitral proceedings will depend on the arbitration agreement between the parties. Consolidation can only happen if the arbitration agreement covers all of the parties’ claims. Thus, the defendant can only file a counterclaim to be consolidated under the same arbitral proceedings if the counterclaim is covered by the same arbitration agreement. Provided the newly made claim is covered by the arbitration agreement, it follows from Section 23(3) of the DAA that such claim can be made during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate having regard to the delay in making it.

If the arbitration is agreed to take place at the DIA, consolidation is regulated by Article 15 of the DIA Rules. Upon the request of a party, the DIA’s Chair’s Committee can decide that the separate cases should be consolidated. If the counterparty does not agree to the consolidation, the chair decides after consulting the parties and confirmed arbitrators in the other proceedings (if any). Pursuant to Article 15(3) of the DIA Rules, the Chair’s Committee must - in addition to taking the aforementioned hearings into account - consider all relevant circumstances, including the mutual connection between the cases and/or the parties, and the progress already made in the pending case.

The courts cannot decide to consolidate separate arbitral proceedings: see Section 4 of the DAA.

The principal rule of privity of contracts applies in Denmark, meaning that a third party is not bound by an arbitration agreement or an award issued pursuant to this agreement when this third party has not signed the agreement or otherwise accepted to be bound by the agreement.

However, in the case of succession (both universal and singular) where the agreement into which the third party is succeeded contains an arbitration clause, this clause will generally be binding upon the third party.

If relevant in a case filed with the national courts, the national courts will interpret the arbitration agreement in order to, inter alia, determine the scope of the agreement. If the national courts find that a foreign third party is subject to or bound by the arbitration agreement to the same extent as elaborated above (see 5. Jurisdiction), the court will bind said third party to the arbitration agreement.

Under Article 16 of the DIA Rules, a party in an arbitration pending under the Rules may request that a third party join as an additional party in the arbitration and, likewise, a third party may request to join as an additional party in an arbitration pending under the Rules. If the third party and/or a party objects to the request to join the additional party, the tribunal shall decide on the objection, after consultation of the third party and the parties: see Article 16(3) of the DIA Rules.

Similarly, the DIA Rules also allow for consolidation of arbitration cases pending before this institute: see Article 15 of the DIA Rules.