DENMARK Law and Practice Contributed by: Jakob Lentz, Johannes Grove Nielsen, Camilla Hudson and Rasmus Schmidt, Bech-Bruun
3. The Arbitration Agreement 3.1 Enforceability
It is possible for public authorities to enter into arbitra - tion agreements when the authority does not act in its capacity as a public authority but, for example, enters into contracts regarding the 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. The approach to be applied therefore largely depends on the specific circumstances of the case and the Considerations that, in many other countries, have led to the requirement that arbitration agreements be in writing have traditionally been addressed in Danish law by the courts imposing relatively strict require - ments for the adoption of an arbitration agreement. The courts have traditionally adopted a restrictive approach to determining which disputes are 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 arbi - tration agreement will largely depend on the specific circumstances of the case (namely the wording and context of the agreement). interests of that particular legal area. 3.3 National Courts’ Approach When a valid arbitration agreement is in force, national courts are confined to the 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 (Sec - tion 37) and refusing recognition or enforcement of the award (Section 39). Under Section 8 (1) of the DAA, the courts’ jurisdiction is limited if a matter is submitted before the Danish national courts but subject to a valid arbitration agree - ment (see 5.2 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 for other reasons.
Neither the DAA nor Danish contract law generally stipulates that an arbitration agreement must meet certain formal requirements. There are, therefore, no formal legal requirements for an arbitration agreement to be enforceable. An oral agreement may also suf - fice, although it may be difficult to prove and thereby uphold. An arbitration agreement based on the par - ties’ unequivocal behaviour, such as failure to object throughout the proceedings, can also be considered binding for the parties. However, under Section 7 of the DAA, arbitration agreements regarding disputes that have 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 con - cluded prior to the dispute. Thus, arbitration clauses in a consumer contract are not, per se, invalid. How - ever, an arbitration agreement concluded before the dispute arose is not binding on the consumer under Section 7 (2) of the DAA. A consumer has waived the right to plead that the arbitration agreement is non- binding only if they proceed with the arbitration after being informed that it is non-binding. 3.2 Arbitrability Under Section 6 of the DAA, it is a principal rule that arbitration may be agreed for disputes relating to subject matter over which the parties have an unre - stricted right to dispose. For some matters, specific statutory provisions establish that these cannot be subject to arbitral agreements – eg, disputes regard - ing a residential lease cannot be subject to an arbitra - tion agreement. Also, as a general rule, fields of law traditionally con - cerned 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. Thus, disputes pertaining to matters of law protecting interests of public policy are generally non-arbitrable. In these cases, the public interest outweighs the parties’ contractual autonomy.
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