DENMARK Law and Practice Contributed by: Johannes Grove Nielsen, Jakob Lentz, Anne Buhl Bjelke and Daniel Myhre Engell, Bech-Bruun Law Firm P/S
4. The Arbitral Tribunal 4.1 Limits on Selection
investors. The leading claims relate to FET, FPS and (indirect) expropriation. NT and/or MFN tend to be pled as auxiliary theories. In Aleksandravicius v Denmark (ICSID ARB/20/30), the investor alleged FET (including the denial of justice) and FPS under the Denmark–Lithuania BIT, before the case was discontinued. Energy/ECT matters sharpen the mix. In Klesch Group Holdings Ltd, Klesch Refining Denmark A/S and Kalundborg Refinery A/S v Kingdom of Denmark (ICSID ARB/23/48), the tribunal’s public procedural record reflects claims under Articles 10 (treatment obligations including FET and non-discrimination) and 13 (expropriation) of the ECT, with the expropriation claim noted as being capable of surviving even if cer- tain objections were to succeed. FET/FPS remain the default backbone of treaty claims, often paired with NT/MFN as supportive arguments. This is consistent with Denmark’s very small set of respondent cases and general ISDS practice. Expropriation is frequently advanced alongside FET in ECT-related disputes and, in the pending ECT case, is positioned to survive certain preliminary objections, hence its practical importance. Finally, intra-EU objections (post- Achmea/Komstroy ) are routinely raised by Denmark in treaty cases and shape pleadings strategy, particularly under the ECT – see Aleksandravicius v Denmark (ICSID ARB/20/30). Contract-based disputes seated in Denmark (separate from treaty-based ISDS) largely centre on breach of contract and declarations of rights, sometimes framed alongside expropriation arguments under domestic law. In the Greenland Minerals (Energy Transition Miner- als) v Greenland & Denmar k arbitration (ad hoc, seat Copenhagen), the claimant seeks confirmation of a contractual right to an exploitation licence and argues that governmental measures would amount to an expropriation of protected property rights according to the investor’s published Statement of Claim.
The parties’ autonomy to select arbitrators is broad in Denmark, but the source of the limits depends on whether the case is conducted under the ICSID Con- vention or as a non-ICSID arbitration with the seat in Denmark. ICSID Convention Cases Party autonomy is broad but constrained by the ICSID framework, not Danish law. Under Article 39 of the ICSID Convention, the majority of arbitrators must be nationals of states other than the respond- ent state and the investor’s home state. Arbitrators must be independent and impartial, and have a con- tinuing disclosure duty (ICSID Arbitration Rules 2022). Challenges are decided under the ICSID Convention, with a high “manifest lack” standard (Article 57), and default appointments are made within the ICSID sys- tem. There is no national “seat” and no lex arbitri like the DAA. Non-ICSID Arbitrations With Danish Choice of Law If chosen as the law of the arbitration, Danish law imposes mandatory requirements of independence/ impartiality and a disclosure duty, and provides chal- lenge and court appointment mechanisms. Key provisions from the DAA expressing the parties’ autonomy to select arbitrators include that: • parties may set the number of arbitrators – the default is three if not agreed; • parties may agree the appointment procedure – failing agreement, in a three-member tribunal each party appoints one arbitrator within 30 days, and the co-arbitrators shall appoint the president within 30 days; and • arbitrators must be impartial and independent, and must disclose circumstances giving rise to justifi- able doubts as to their impartiality and independ- ence. 4.2 Default Procedures Under the DAA, default rules apply if the parties’ agreed method fails.
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