DENMARK Trends and Developments Contributed by: Jakob Lentz, Johannes Grove Nielsen, Camilla Hudson and Rasmus Schmidt, Bech-Bruun
Recent Danish case law has addressed the scope and limits of arbitration agreements in a number of differ - ent contexts. The decisions below show that Dan - ish courts will generally give effect to valid arbitration agreements, including in a post-bankruptcy setting, but that arbitration clauses must have a clear con - tractual basis, remain subject to statutory limitations and comply with fundamental procedural safeguards. Arbitration Clauses in Board Member Agreements and Claims Brought by Bankruptcy Estates In April 2026, the Danish Supreme Court rendered an important decision on the binding effect and scope of arbitration clauses in board member agreements. The case concerned two board members, A and B, who joined the board of X A/S in the spring of 2017 and entered into separate non-executive board mem - ber Agreements with the company in June 2017. The agreements contained arbitration clauses providing that any dispute arising out of or in connection with the agreements, including disputes regarding their existence, validity or termination, was to be resolved by arbitration. X A/S was declared bankrupt in December 2018. In November 2021, the bankruptcy estate commenced proceedings before the Copenhagen City Court against A and B, claiming damages for a loss alleg - edly suffered as a result of A and B having acted in a manner giving rise to liability in the performance of their duties as board members, pursuant to Section 361 (1) of the Danish Companies Act. A and B argued that the Danish courts should dismiss the proceedings because the arbitration clauses in the board member agreements governed the claims. The main issue before the Supreme Court was wheth - er the bankruptcy estate was bound by the arbitra - tion clauses and whether the dispute fell within their scope. The bankruptcy estate argued, among other things, that the claims were insolvency-related and that the estate had not consented to arbitration. The estate further argued that the arbitration clauses were invalid because Section 364 (1) of the Danish Com - panies Act reserves the decision to bring proceed - ings against members of management to the general meeting.
The Supreme Court first held that neither the Danish Companies Act nor the Danish Arbitration Act pre - cludes a company and a board member from agreeing that any claims for damages brought by the company against the board member under Section 361 (1) of the Danish Companies Act must be resolved by arbi - tration rather than by the Danish courts. The Court further held that such claims may be made subject to arbitration unless specific circumstances or consid - erations render arbitration inappropriate. In the case at hand, Danish law applied; the arbitration was to be conducted under the rules of the Danish Institute of Arbitration, which provided sufficient safeguards to ensure proper proceedings. As there were no other circumstances making arbitration inappropriate, the Supreme Court found that X A/S had not been pre - cluded from entering into the arbitration agreements. The Supreme Court also rejected the estate’s argu - ment based on Section 364 (1) of the Danish Com - panies Act. In the Court’s view, neither the wording of Section 364 (1), which concerns decisions by the gen - eral meeting to bring proceedings against members of management, nor the preparatory works provided any basis for concluding that an arbitration agreement with a board member must be approved by the gen - eral meeting. The Supreme Court expressly noted, however, that it did not decide whether the arbitra - tion clauses, which the chairman of the board had entered into on behalf of the company and the indi - vidual board members, required approval by the gen - eral meeting on any basis other than Section 364 (1). Having rejected the estate’s argument under Section 364 (1), the Supreme Court proceeded on the basis that the board member agreements contained binding arbitration agreements covering any damages claims brought by the company against A and B. The Supreme Court then considered whether the bankruptcy estate’s specific claim against A and B fell within the scope of the arbitration clauses. The estate claimed that A and B had incurred liability towards the company under Section 361 of the Danish Com - panies Act. The Supreme Court therefore found that the estate was pursuing a claim to which it had suc - ceeded from the company, rather than a claim aris - ing by virtue of the bankruptcy. The Supreme Court emphasised that the claim was not based on rights or
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