DENMARK Law and Practice Contributed by: Johannes Grove Nielsen, Jakob Lentz, Anne Buhl Bjelke and Daniel Myhre Engell, Bech-Bruun Law Firm P/S
UNCITRAL-Based Investor–State Cases Where UNCITRAL Rules are used, tribunals may grant interim measures of the kinds listed in Article 26 (sta- tus quo, prevent harm, asset and evidence preser- vation). In Denmark, such measures are not directly enforceable under the DAA; parties obtain enforceable relief from the courts (again, please see 5.2 Role of Domestic Courts ). 5.2 Role of Domestic Courts Court Powers Notwithstanding Arbitration Section 9 of the DAA provides that the courts may grant interim measures (and enforcement measures) even if there is an arbitration agreement. This applies irrespective of whether arbitration has begun or where the seat is located. It is, however, conditional on the Danish courts having jurisdiction, and the availability of such measures is further limited by the general prin- ciples of state immunity, which typically shield sover- eign and public assets from attachment or injunction. Therefore, enforceable attachments (in Danish: “arrest”), injunctions and similar relief are sought from the ordinary courts under the Danish Administration of Justice Act. No Enforcement of Tribunal-Ordered Interim Measures Danish courts do not recognise or enforce interim measures ordered by arbitral tribunals (including DIA emergency/interim arbitrators). A party must apply anew to the courts; any prior tribunal decision has persuasive value at most. ICSID Specificity In ICSID cases, Article 26 of the ICSID Convention gives arbitration an exclusive character (“to the exclu- sion of any other remedy” unless the parties agree otherwise). ICSID tribunals have protected that exclusivity – for example, by ordering parties to withdraw or refrain from parallel court measures. Accordingly, interim relief in ICSID disputes is addressed to the ICSID tri- bunal; national court intervention is generally incom- patible with Article 26 without party agreement. An example from ICSID case law showcasing this is Klesch Group Holdings Limited and Raffinerie Heide
GmbH v Federal Republic of Germany (ICSID case no ARB/23/49 – see 1.5 Major Arbitrations ). 5.3 Security for Costs The DAA does not expressly empower tribunals to order security for (adverse) party costs. However, it does expressly cover interim measures generally and the ability to require “appropriate security” in connec- tion with such measures (Section 17) and security for the tribunal’s own fees/expenses and deposits (Sec- tion 36). In litigation cases, Danish courts may order a claim- ant to put up security for adverse costs where the claimant is domiciled outside the European Economic Area. Danish case law also addresses attempts to cir- cumvent the cost rules – eg, by assigning a claim to a newly formed, thinly capitalised company – and has accepted a defendant’s claims for security for costs in such scenarios. The same anti-abuse considerations might inspire tri- bunals’ decisions when seated in Denmark, outside the specific cases where parties have empowered the tribunal to order security for costs through the DIA Rules, inter alia. Under the DIA Rules, the tribunal has several options. • Article 12 (3) expressly allows the tribunal, at a party’s request, to order another party to provide security for any costs the tribunal may impose in its final award, including ordering security for adverse costs, such as expected lawyer and expert fees. • Article 36 empowers the tribunal to order interim measures it considers necessary and to require appropriate security in connection with those measures. This covers security tied to the effec- tiveness of the interim measure itself (ie, preser- vation of assets or evidence), not security for the opposing party’s legal costs.
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