NORWAY Trends and Developments Contributed by: Kristine Hyldmo Bjørnvik, Andreas Meidell, Henrik Møinichen and Nanette Arvesen, Advokatfirmaet Thommessen AS
settlement differently, feel pressure to accept settle - ment proposals, and have concerns about fairness and enforcement if arbitrators push too hard for set - tlement. Mediation and settlement discussions thus raise several issues, and for some, it may seem strange that parties who opt for arbitration instead of litiga - tion would choose to mediate once arbitration is initi - ated. A recent survey among Norwegian practitioners revealed varied opinions on the extent to which arbi - tral tribunals should influence parties to discuss set - tlement. Nonetheless, there is a growing consensus that mediation can play a beneficial role in arbitration, depending on the case. Determining when and how to facilitate settlement discussions during an ongoing arbitration can be challenging. While the Arbitration Act does not pro - vide guidance, NOMA’s best practice guidelines have included a “mediation window” principle since 2017 – a tool also explored in the International Chamber of Commerce or ICC’s publication “Effective Conflict Management” (July 2023). Essentially, the idea is that the parties, preferably during the first case manage - ment meeting, agree to reserve a “time window” in the procedural timetable for possible settlement dis - cussions or mediation, such as shortly after the initial exchange of statements of claim and defence. The aim is to encourage the parties to agree to at least explore negotiated solutions, thereby boosting the chances of settlement. Parties may further consider using a “sealed offer” mechanism to encourage constructive settlement offers during arbitration. This is included as a topic for discussion in the latest revision of NOMA’s CMC Matrix. A sealed offer is a settlement proposal which, if not accepted by the opposing party, is disclosed to the arbitral tribunal only after the award on the merits has been issued and it is time to determine the alloca - tion of costs. While the Norwegian Dispute Act includes a rule that the losing party may be relieved of its obligation to cover the winning party’s reasonable litigation costs if the winner has rejected “a reasonable settlement offer”, the Arbitration Act does not contain any such
rule. Section 40 of the Norwegian Arbitration Act merely states that the arbitral tribunal may allocate case costs if requested by a party and can order a par - ty to pay all or part of another party’s costs if deemed appropriate, in practice adhering to the “loser pays” principle. However, under the NOMA rules, arbitrators must consider whether the successful party rejected a reasonable settlement offer when determining the allocation of costs. This aims to protect parties from unnecessary financial burdens and ensure fairness, potentially enhancing their willingness to exchange settlement offers. If the parties reach a settlement, the arbitral tribunal is required, pursuant to Section 35 of the Norwegian Arbitration Act, to confirm the settlement in an arbitral award upon request, unless it has valid reasons to object. A ratified settlement has the same legal effect as other arbitral awards. Challenge of Arbitral Awards – Clarifications on Impartiality and Independence Arbitral awards in Norway are occasionally contested in ordinary courts, although there is no clear trend in the frequency of these challenges. The bar for suc - cessfully claiming invalidity is high, as demonstrated by the fact that, to date, no challenges have led to an arbitral award being declared entirely invalid, although partial invalidity has been declared. In May 2025, the Norwegian Supreme Court issued its first-ever judgment concerning an arbitrator’s independence and impartiality under the Arbitration Act. The validity of the award was contested after it was discovered that one arbitrator’s law firm had represented a party involved in the proceedings. The challenge was dismissed, and the landmark judg - ment offers valuable guidance on the application of the Arbitration Act’s standards of independence and impartiality, drawing on international soft law sources. The Arbitration Act is based on the UNCITRAL Model Law (1985) and aims to facilitate international arbi - tration in Norway by incorporating widely recog - nised rules. The Supreme Court reasoned that the act’s standards should therefore be interpreted with due regard to international harmonisation and legal sources, such as the IBA Guidelines on Conflicts of
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