DENMARK Law and Practice Contributed by: Johannes Grove Nielsen, Jakob Lentz, Anne Buhl Bjelke and Daniel Myhre Engell, Bech-Bruun Law Firm P/S
been initiated under the ECT and is currently pending before ICSID. Investors often tend to pursue contract-based arbi- tration or domestic litigation with the national courts instead of treaty-based investor–state arbitration. Danish law provides for judicial review of administra- tive actions through its Constitution, enabling court litigation as an alternative path in some cases. An example of this is seen in Greenland Minerals (GMAS) v Greenland & Denmark , where an investor commenced contract-based ad hoc arbitration with the seat in Copenhagen and, parallel to this, initiated court cases in the Greenlandic and Danish national courts over the same measures, illustrating that inves- tors do not rely on arbitration alone. In addition, following a March 2018 ruling from the Court of Justice of the European Union and the agreement for the termination of intra-EU BITs (see 1.1 National Position ), EU investors can no longer commence intra-EU BIT-based arbitration against Denmark. As such, EU investors must rely on national and/or EU law remedies (ie, litigation at the national court), further lowering the use of treaty-based inves- tor–state arbitration in Denmark. From an outbound perspective, Danish investors abroad have used treaty-based investor–state arbi- tration when available; the register of the UN’s Con- ference on Trade and Develop shows a total of nine cases initiated (solely or partially) by an investor from Denmark – eg, Mærsk v Algeria (ICSID case no ARB/09/14) commenced in accordance with the Den- mark–Algeria BIT. The higher frequency of investor–state arbitration commenced by Danish investors showcases such arbitration as a familiar tool, albeit not universal. 1.4 Key Industries Investor–state arbitration activity in Denmark has been very limited and concentrated in two industry sectors, as seen in the cases mentioned in 1.3 Prevalence of Investor–State Arbitration .
In the energy sector, the pending ICSID case of Klesch Group Holdings Ltd, Klesch Refining Denmark A/S and Kalundborg Refinery A/S v Kingdom of Denmark (ICSID case no ARB/23/48) challenges Denmark’s implementation of the EU “solidarity contribution” for fossil fuel companies. If the case commenced by Klesch Group et al proves successful, it is plausible that other investors in similar situations will embrace the opportunity to commence investor–state arbitra- tion. This is all the more apparent as Denmark’s withdrawal from the ECT (effective September 2025) still secures protection for investments existing prior to Denmark’s withdrawal, pursuant to the 20-year “sunset clause” in Article 47 of the ECT. The other relevant industry that has experienced sig- nificant investor–state arbitration is the mining sector, with the Greenland Minerals v Greenland & Denmark arbitration (ad hoc, Copenhagen) arising from Green- land’s uranium ban (Act No 20/2021) and the refusal of an exploitation licence for the Kvanefjeld rare earths project as the prominent (and only) example. As such, from a broader perspective, the energy sec- tor seems to be the most prone to disputes and, by extension, investor–state arbitration due to the climate transition regulation and emergency measures, as shown by the ICSID cases referred to above. 1.5 Major Arbitrations The following three cases are the most legally sig- nificant investor–state arbitrations involving Denmark, although one of them is not formally an investor–state arbitration, but rather contract-based ad hoc arbitra- tion brought by an investor against Denmark and Greenland. Klesch Group Holdings Ltd, Klesch Refining Denmark A/S and Kalundborg Refinery A/S v Kingdom of Denmark (ICSID Case No ARB/23/48) – Pending The facts of the case This case challenges Denmark’s implementation of the EU-wide “solidarity contribution” for certain fos- sil fuel sector profits adopted by Council Regulation (EU) 2022/1854 and implemented in Denmark by
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