FINLAND Law and Practice Contributed by: Julia Pekkala, Mikko Leppä, Risto Sandvik and Nuutti Kortelainen, HPP Attorneys Ltd
If the appointment of an arbitrator is challenged, it will be decided by the arbitral tribunal. Courts are only competent to examine an arbitrator’s impartiality or independence during set-aside proceedings. Note that this area of law is subject to pending legisla - tive reform; see 2.2 Changes to National Law . 4.5 Arbitrator Requirements Under the Arbitration Act, arbitrators must be impartial and independent in their duties. Before accepting an appointment, the prospective arbitrator shall disclose any circumstances likely to endanger or give rise to justifiable doubts as to their impartiality and independ - ence as an arbitrator. The FAI Rules have similar requirements of impartiality, independency and disclosure. An arbitral tribunal is obliged to rule on a party’s chal - lenge to the tribunal’s own jurisdiction. Under the FAI Rules, the arbitral tribunal has the power to rule on its own jurisdiction, including any objections concerning the existence, validity or applicability of the arbitration agreement. However, the arbitral tribunal’s decision on compe - tence is ultimately not binding on the courts, as a party has the right to request a court to rule on the issue by bringing a declaratory action claim regarding the valid - ity or scope of the arbitration agreement. Even if the arbitral tribunal’s jurisdiction is challenged in court, the arbitrators may commence or continue the arbitration proceedings, except in situations where a court finds the arbitral tribunal lacks jurisdiction on the issue and the decision has become final. 5. Jurisdiction 5.1 Challenges to Jurisdiction 5.2 Circumstances for Court Intervention Court Review of Arbitral Tribunal Jurisdiction in Finland As described in 5.1 Challenges to Jurisdiction , Finn- ish courts have jurisdiction to review claims regarding the validity or scope of an arbitration agreement. The jurisdiction of an arbitral tribunal may also be tried
in court where a party to court proceedings in a civil dispute objects to the court’s jurisdiction and invokes an arbitration agreement before addressing the merits of the matter. As described in 3.3 National Courts’ Approach , Finn- ish courts are generally regarded as being friendly towards arbitration, and arbitration is a common way of settling business disputes in Finland. Provided that an arbitration agreement is invoked in time, courts will not take a matter that falls within the scope of the agreement into further consideration but will refer the matter to arbitration. In addition, a court can set aside an arbitration award upon the request of a party, if the arbitrators have exceeded their authority. Review of Negative Rulings on Jurisdiction Finnish courts are not bound by either positive or neg - ative jurisdictional rulings made by arbitral tribunals. However, a negative ruling on jurisdiction by an arbi - tral tribunal cannot, in itself, be directly challenged in court. The Arbitration Act is silent on the treatment of negative jurisdictional rulings, but a party to the arbi - tration may bring a declaratory action before a court to confirm that the matter is subject to arbitration. If the court finds that the tribunal did have jurisdiction, the arbitration proceedings must be commenced anew. Please note that the legislation governing this mat - ter is about to change, see question 2.2 Changes to National Law . 5.3 Timing of Challenge A party may challenge the arbitral tribunal’s compe - tence in court as soon as a case has been filed for arbitration, during the arbitral proceedings and after an arbitral award has been rendered. Despite this, an arbitral tribunal may proceed with the case while a challenge concerning its jurisdiction is pending in court. As regards an arbitral award that has already been rendered, the Arbitration Act provides that an action for setting aside an arbitration award (based on lack of jurisdiction, for example) shall be brought within three months of the date on which a party to the arbitration received a copy of the award.
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