DENMARK Trends and Developments Contributed by: Anne Buhl Bjelke, Johannes Grove Nielsen, Camilla Hudson and Rasmus Schmidt, Bech-Bruun
lishing that the submission to the Cour d’appel de Par- is was made on the basis of “make-believe” reasons, including that it had been made to delay enforcement. However, the High Court did render its decision pursu - ant to Company A’s alternative claim and the Danish company, as a condition for the stay, was ordered to provide security for the full amount that was awarded to Company A in the arbitral award from the ICC. The decision in U 2022.923 – where the enforcement proceedings were continued In this decision, prior to the case presented above (where the High Court stayed the enforcement of the arbitral award on the condition that the defendant pro - vided adequate security), the High Court decided that the enforcement proceedings should be continued. This case pertained to a dispute between two Dan - ish companies. One of these companies (Company X) had commenced legal proceedings before one of the district courts in Denmark, claiming that an arbi - tral award should be set aside. While this proceeded, Company X claimed that the enforcement proceed - ings commenced pursuant to this arbitral award being stayed. The High Court denied staying the enforce - ment proceedings pending a decision on the valid - ity of the arbitral award. In its reasoning, the Court referred to the fact that enforcement of an arbitral award can only be refused pursuant to Section 39, subsection 2 (b) of the Danish Arbitration Act if the Court finds that the enforcement will be manifestly contrary to the public policy. Section 39, subsection 2 (b) of the Danish Arbitration Act corresponds to the provision in Section 37: see “Confirming the finality of an arbitral award” above. The High Court then pointed out that it follows from the preparatory works for the Danish Arbitration Act that such provisions are narrow exceptions to the so- called ban on the national courts reviewing the con - tents of the tribunal’s conclusions, and that it is only in exceptional cases where there are such extraordinary, serious errors on the part of the tribunal that enforce - ment of the arbitral award would be manifestly con - trary to the public policy. The High Court stated that the court’s ability to stay the enforcement proceedings must be seen in the context of this.
Overall, the High Court found that, based on the nature and content of Company X’s objections against the validity of the arbitral award, it was not proved probable that the arbitral award suffered from such extraordinary, serious errors that enforcement would be manifestly contrary to the public policy. The Court then confirmed the decision of the Danish Enforcement Court and refused staying the enforcement proceedings. Putting the decisions on enforcement of an arbitral award under appeal/review into perspective Thus, the High Court has recently delivered two deci - sions on the question of staying enforcement pro - ceedings with opposite results. However, it is notable that, in the decision in U 2023.334 (where enforce - ment proceedings were stayed) as opposed to the decision in U 2022.923 (where enforcement proceed - ings were continued), the relevant arbitral award was under review by a non-Danish judicial entity. As part of its reasoning in U 2022.923, the High Court referred largely to Danish law, from which it follows that the national courts cannot carry out a substantive review of an arbitral award. In general, and under Danish law, the national courts will be reluctant to review whether the arbitral tribunal has applied the rules incorrectly or whether the tribunal has assessed the facts of the case incorrectly. This is also in line with current Danish Supreme Court practice. In U 2023.334, the relevant arbitral award was not pending before a Danish legal entity subject to Danish law, meaning that it did not allow the High Court to consider that its ability to stay the enforcement pro - ceedings should be construed narrowly against the background of the restrictive approach that is appli - cable when the validity of an arbitral award is reviewed pursuant to Danish law. This likely explains the differ - ence in results between the decision in U 2023.334 and the decision in U 2022.923. Thus, it remains the main rule in Danish jurisdiction that arbitral awards are final and enforceable, which are often considered as being among the advantages of choosing arbitration instead of the national court system – but from the decisions, it can also be con - cluded that Danish courts are more inclined to allow a stay (on the proviso that security is provided) if the arbitral award is foreign.
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