DENMARK Law and Practice Contributed by: Johannes Grove Nielsen, Jakob Lentz, Anne Buhl Bjelke and Daniel Myhre Engell, Bech-Bruun Law Firm P/S
Bech-Bruun Law Firm P/S Gdanskgade 18 2150 Nordhavn Denmark
Tel: +45 7227 0000 Fax: +45 7227 0027
Email: info@bechbruun.com Web: www.bechbruun.com
1. Overview 1.1 National Position
1.2 Arbitration Conventions Denmark is a party to a number of major arbitration conventions, the most notable of which include the ICSID Convention of 1965 and the Convention on the Recognition and Enforcement of Foreign Arbi- tral Award of 1958 (“the New York Convention”). The ICSID Convention entered into force for Denmark in May 1968, and the New York Convention first entered into force in March 1973. In February 1976, the New York Convention’s applica- tion was extended to Greenland and the Fareo Islands as well (which are a part of the Kingdom of Denmark). However, Denmark has made use of both the reci- procity and commercial reservations in connection with the Convention. 1.3 Prevalence of Investor–State Arbitration Treaty-based investor–state arbitration is rather rare in Denmark. The public register of the UN’s Conference on Trade and Development shows only two known investor–state arbitration cases commenced against Denmark to date – one discontinued and one currently pending. Denmark’s first known treaty-based investor–state arbitration case first started in 2020, underscoring his- torically low prevalence. The case – Aleksandravicius v Denmark (ICSID case no ARB/20/30) – was initiated in accordance with a Denmark–Lithuania BIT, but was discontinued in November 2021. The second, now-pending investor–state arbitration case – Klesch Group Holdings Ltd, Klesch Refining Denmark A/S and Kalundborg Refinery A/S v King - dom of Denmark (ICSID case no ARB/23/48) – has
Denmark has not expressed general reluctance towards investor–state arbitration or investor–state dispute settlement (ISDS), nor does Denmark oppose it in principle. Denmark continues to maintain a net- work of extra-EU bilateral investment treaties (BITs) with nations outside the EU that typically provide con- sent to arbitration. However, in 2020 Denmark agreed – alongside 22 oth- er EU member states – to terminate all intra-EU BITs with each other, as such treaties were deemed incon- sistent with general EU law by the European Court of Justice. Foreign investments within the EU are, as a general rule, protected by EU law. Going forward, Denmark supports the EU’s general shift from tradi- tional investor–state arbitration to a reformed Multilat- eral Investment Court System, in line with the regime set forth by UNCITRAL. In April 2023, Denmark further announced its intention to withdraw from the Energy Charter Treaty (ECT), due to the treaty creating uncertainties for investments and for the green transition; the withdrawal took effect on 4 September 2025 under Article 47 of the ECT. Impor- tantly, the so-called “sunset clause” under Article 47 of the ECT ensures continued investment protection for existing investments for 20 years after withdrawal (ie, potentially until 2045). This extended timeline post- withdrawal and the subsequent implications remain central to investment arbitration in Denmark.
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