DENMARK Trends and Developments Contributed by: Anne Buhl Bjelke, Johannes Grove Nielsen, Camilla Hudson and Rasmus Schmidt, Bech-Bruun
Recent Decisions From the Danish Supreme Court and the Danish High Court One of the often-mentioned advantages of choosing arbitration as the mechanism for dispute resolution instead of the national court system is that the award will be final and enforceable. In recent decisions from the Supreme Court and the Eastern High Court, this has been a topic for the Supreme Court’s considera - tion. Enforcement of a foreign arbitral award In March 2025, the Danish Supreme Court issued a landmark ruling on the enforcement of foreign arbitral awards; see the decision in U 2025.1922 H. The case concerned two parties, A and B, who entered into an agreement in 2017. The agreement included a clause for arbitration before the Shanghai Arbitration Com - mission (SHAC). B initiated arbitration in June 2020, seeking inter alia cancellation of the agreement and repayment of its investment. A did not participate in the arbitration, leading to a default award in favour of B in November 2020. B subsequently attempted to enforce this award in Denmark, where A was domi - ciled. The Supreme Court was tasked with determin - ing whether the arbitral award could be enforced in Denmark, including whether the defendant, A, had received proper notice of the arbitration proceedings as required under Article V(1)(b) of the 1958 New York Convention and Section 39 (1)(1)(b) of the Danish Arbi - tration Act. A claimed that he had not been notified, while B, on the other hand, claimed that the notice was served according to the applicable SHAC rules. In its ruling, the Supreme Court emphasised the necessity of notifying a party about arbitration pro - ceedings to allow it to present its case. Without such notice, enforcement of the arbitral award is not justi - fied. According to Section 39 (1)(1)(b) of the Arbitration Act, the burden of proof lies with the party oppos - ing enforcement. In continuation of this, the Supreme Court stated that this evidentiary assessment must take into account that it can be difficult to prove that a party has not been notified. According to the Supreme Court, there will therefore be grounds for refusing to recognise and enforce an arbitral award if there is
reasonable doubt as to whether the party has been notified of the arbitration proceedings. In this case, the SHAC sent notification letters to two different Chinese addresses linked to A. The Supreme Court found that, despite the SHAC considering the notice served to A according to the applicable rules, A was not duly notified, rendering the arbitral award unenforceable in Denmark. With this decision, the Supreme Court sets a prec - edent with international implications, highlighting the importance of due process and the readiness of Dan - ish courts to independently review whether a party has received proper notice of the arbitration proceedings. This underscores the risk of pursuing default judg - ments without ensuring proper notice, as enforce - ment efforts may prove futile without adherence to due process. Confirming the finality of an arbitral award In May 2022, the Eastern High Court ruled on the question of whether an arbitration award should be set aside; see the decision in U 2022.3012. The dispute was between two companies and related to wheth - er two non-compete clauses that had been agreed upon in a shareholders’ agreement and a manage - ment shareholders’ agreement were invalid and inap - plicable, as they violated the regulation against anti- competition agreements found in Danish national law and EU law. In its award, the tribunal concluded that the two non- compete clauses were valid and applicable. The tribu - nal found that the agreements with the non-compete clauses had been signed by the claimant in the capac - ity of a professional investor, and not in the capacity of an employee, and the Danish Act on Contracts section 38 (2) was thus not applicable to the agreements. The losing party of the arbitration case (ie, the claim - ant) then commenced proceedings before the Danish national courts, claiming that the arbitral award was contrary to Danish national competition law, as well as EU law, and that the award should be set aside pursuant to Section 37, subsections 2 (a) and 2 (b) of the Danish Arbitration Act.
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