DENMARK Law and Practice Contributed by: Johannes Grove Nielsen and Camilla Søgaard Hudson, Bech-Bruun
In that case, the pending arbitration proceedings may proceed, irrespective of whether the pro - ceedings are pending before the ordinary courts. If it turns out that the case is not suitable for arbi - tration, the arbitral tribunal will dismiss the case. According to the Danish Arbitration Act Section 16, a party’s objection to the validity of an arbi - tration clause must be submitted no later than the submission of the defence. If proceedings are commenced in breach of a for - eign jurisdiction clause, the remedy depends on the nationality of the jurisdiction clause in ques - tion. If the breached jurisdiction clause specifies jurisdiction within the EU, and if the Brussels I Regulation is applicable, a Danish court must decline jurisdiction if the court designated in the jurisdiction clause has already declared that it has jurisdiction; otherwise, a Danish court must stay proceedings until the designated court declares whether it has jurisdiction. If proceedings are commenced in breach of a foreign jurisdiction clause designating a court outside an EU member state, a Danish court may choose to hear the matter if jurisdiction can also be established in Denmark. 7. Ship-Owners’ Income Tax Relief 7.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies Danish ship-owners are able to choose to be subject to the Danish tonnage tax scheme as an alternative to payment of regular corporate tax. Under the Danish tonnage tax scheme, ship-owners’ income is fixed on the basis of the net tonnage at their disposal. Ship-owners pay tonnage tax irrespective of actual income, profit and loss.
The participation of ship-owners in the tonnage tax scheme is voluntary, but the choice of opt - ing in or out is binding for a period of ten years. Special vessels such as supply, construction, offshore and ice-breaking vessels are also eligi - ble for the tonnage tax scheme. 8. Implications of Non- Performance, the IMO 2020, Trade Sanctions and the War in Ukraine 8.1 Force Majeure and Frustration For a non-performing party to invoke force majeure, the party must prove that: • the possibility of performance of the contract is impossible; and • the exclusion is due to unforeseen events of extraordinary character. Force majeure under Danish law is slightly differ - ent from the English term “frustration”. The decisive time factor of whether an event is unforeseen is the signing of the contract. If the shipping contract was signed before the event of extraordinary character, such event would be considered unforeseen, and the party could potentially be able to invoke force majeure for any non-performance resulting from the effects of the event if it rendered the performance impossible. This does not mean that force majeure cannot be invoked for any non-performance of a contract agreed on after such an event has occurred. Unforeseen situations can occur after an event has already occurred due to developments in the situation – eg, if a national conflict at the place of
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