DENMARK Trends and Developments Contributed by: Johannes Grove Nielsen, Jakob Lentz, Anne Buhl Bjelke and Daniel Myhre Engell, Bech-Bruun Law Firm P/S
sive Economic and Trade Agreement between Canada and the EU is compatible with EU law. Other arbitration covered by the Danish Arbitration Act When arbitration is otherwise set in Denmark, the framework is anchored by the DAA – a modern, UNCI- TRAL-inspired lex arbitri ensuring investors the same procedural securities as with any UNCITRAL-based arbitration regulation (albeit without the arbitral tribu- nal being able to issue orders on interim measures that are enforceable in Denmark – a topic that is under debate in the arbitration forum in Denmark and is likely to result in an amendment of the DAA to allow such measures). Furthermore, pursuant to the DAA, arbitral awards are binding and enforceable as Danish judgments, “irre- spective of the country in which [they were] made”, subject to (limited) refusal grounds that mirror those found in Article V of the New York Convention (Sec- tions 38–39 of the DAA). Courts may grant interim measures notwithstand- ing an arbitration agreement (Section 9 of the DAA), whereas tribunal-ordered interim measures are not directly enforceable. In the pending mining-related arbitration of Green- land Minerals (GMAS) v Greenland & Denmark , GMAS brought claims against the governments of Greenland and Denmark. The case arose as a consequence of the government of Greenland having informed GMAS in December 2021 that, because of the then- new Uranium Act, the government of Greenland did not recognise any right of GMAS to an exploitation licence for the Kvanefjeld Project earlier granted. The exploitation licence included an arbitration clause, and therefore GMAS brought a claim conducted as an ad hoc arbitration seated in Denmark. Although it is a contract claim rather than a formal treaty claim based on investment protection, the case illustrates how investors sometimes have other tools to protect their investments in Denmark. GMAS also brought litigation proceedings in both Greenland and Denmark as another route.
Alternative to international arbitration: national courts offering investment protection under Danish law Where no treaty route exists (eg, in an intra-EU setting) and international arbitration under the DAA is not an option, investors might have the option of litigating in Danish courts. The Danish courts operate under a highly regarded rule-of-law framework, and the judges are renowned for their high skills. The Danish Constitution ensures extensive protection of private property, meaning that expropriation is only permissible if it is in the public interest and with full compensation – and it guarantees broad access to judicial review of administrative action with the regu- lar court. In addition, the European Convention on Human Rights is incorporated into Danish law, sup- plying additional protection for investors. Finally, Denmark ranks first worldwide on Transpar- ency International’s so-called Corruption Percep- tions Index in 2024, with a score of 90/100, reflecting exceptionally low perceived public sector corruption – an important baseline for investors assessing forum risk. However, the risk of (perceived or real) bias within the domestic courts of Denmark when faced with an investor–state claim remains an inevitable chal- lenge to the appetite for using this alternative forum, along with other important considerations regarding enforcement possibilities of court judgments versus arbitral awards, the protection actually offered under Danish law compared with the relevant treaty and also procedural differences in the litigation system versus international arbitration. Investors have utilised this alternative resolution route from time to time, though, as is apparent from the GMAS v Greenland and Denmark case. Another entity that used this alternative approach instead of international arbitration within the energy sector is Irish company Vermilion Energy Ireland Ltd, which chose to bring its challenge to the temporary solidarity contribution under which it was subject to a large multimillion-euro payment during 2022–2023 before the Irish domestic courts, with a current refer- ence for a preliminary ruling from the ECJ.
44 CHAMBERS.COM
Powered by FlippingBook