Norway: International Arbitration (4th edition)

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This country-specific Q&A provides an overview of the legal framework and key issues surrounding international arbitration law in Norway.

This Q&A is part of the global guide to International Arbitration.

For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/international-arbitration-4th-edition/

  1. What legislation applies to arbitration in your country? Are there any mandatory laws?

    The Arbitration Act 2004 governs arbitrations when the place of arbitration is Norway. The place of arbitration is determined by interpreting the arbitration agreement.

    The Arbitration Act is mandatory and can be departed from only by agreement and provided that this is explicitly stated in the relevant provision of the act.

  2. Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?

    Norway ratified the New York Convention on March 14 1961 and it entered into force June 11 1961.

    Norwegian law does not limit the scope of the convention. However, Norway has made reservations to the convention so that it applies only to the recognition and enforcement of arbitral awards made in the territory of one of the contracting states. Further, under these reservations, the convention does not apply to proceedings when the subject matter is immovable property situated in Norway or a right in or to such property.

  3. What other arbitration-related treaties and conventions is your country a party to?

    Norway is a party to several other treaties and conventions relating to arbitration. The most relevant are the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States and several bilateral investment protection agreements (eg, with Chile, China, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Madagascar, Peru, Poland, Romania, Russia, Slovakia and Sri Lanka).

  4. Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?

    The Arbitration Act is based on the UNICITRAL Model Law, but Norway has not adopted the UNICITRAL Model Law directly.

    On some points, the Act enhances more detailed regulation than the Model Law. Inter alia when it comes to Duty of confidentiality and public access, the Act states that the duty of confidentiality only apply if the parties has so agreed in the arbitration agreement.

  5. Are there any impending plans to reform the arbitration laws in your country?

    No.

  6. What arbitral institutions (if any) exist in your country? When were their rules last amended? Are any amendments being considered?

    There is only one arbitral institution in Norway. That is the Arbitration and Dispute Resolution institute of the Oslo Chamber of Commerce (OCC). The institute is a body incorporated in the Chamber, which deals with matters of arbitration and dispute resolution. The arbitration rules were last amended in 2016, and the new rules on arbitration, together with new rules on mediation, went into force January 1, 2017.

    Also worth mentioning is the The Nordic Offshore and Maritime Arbitration Association (NOMA). Although not an Institute, NOMA offers a set of arbitration rules. The rules were amended in 2017, and are based on UNCITRAL Arbitration Rules. NOMA also offers a set of Best Practice Guidelines.

  7. What are the validity requirements for an arbitration agreement under the laws of your country?

    Arbitration agreements may comprise current and potential disputes under a defined legal relationship between the parties. Only disputes at the disposal of the parties may be subject to arbitration. In addition, the ordinary rules and principles of formation and validity under Norwegian contract law apply to arbitration agreements.

    There is no particular form prescribed; agreements need not be executed in writing. However, they may be declared void if they are entered into under duress, fraud or undue influence, or if the agreement is deemed unreasonable pursuant to Section 36 of the Contract Act.

    There are some additional validity requirements, including requirements to written forms, that apply to arbitration agreements in special cases (eg, in relation to carriage of goods and consumer disputes).

    The validity requirements in relation to consumers are that:

    • agreements entered into before a dispute has arisen are not binding on the consumer; and
    • agreements must be executed in a written, separate document signed by both parties.
  8. Are arbitration clauses considered separable from the main contract?

    Yes – the doctrine of separability is codified in Section 18 of the Arbitration Act. The act states that:

    • arbitration agreements must be regarded as separate agreements, independent from the other parts of the contract; and
    • an arbitral tribunal may declare the contract void without that leading to the arbitration agreement being declared void.
  9. Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?

    The Arbitration Act contains no consolidation clauses. Accordingly, the tribunal cannot consolidate separate arbitral proceedings without the parties' consent.

    Although it is not expressly stated in the Arbitration Act, it is clear that multiparty agreements are recognised under Norwegian law (eg, in the preparatory works to the act).

  10. In what instances can third parties or non-signatories be bound by an arbitration agreement?

    A third party can be bound by an arbitration agreement if the subject matter of the agreement is transferred to such third party. Further, third parties can in some instances be bound by an arbitration agreement if they make direct claims against one of the parties to the agreement based on the agreement.

    In this respect, we also note that according to Norwegian rules on the binding force of judgments, arbitral awards are binding on third parties to the same extent as the third parties would have been bound by an equivalent agreement regarding the subject matter of the award.

  11. How is the law applicable to the substance determined? Is there a specific set of choice of law rules in your country?

    In the absence of an agreement between the parties regarding the substantive law applicable to the dispute, the arbitral tribunal will apply the substantive law determined by Norwegian private international law.

    Norwegian private international law is influenced by the rules regarding choice of law in the European Union (ie, the Rome Convention and Rome I Regulation), and includes also mandatory rules of law to protect, for example, employees, consumers, insured parties and trade agents from entering into unfavourable (choice of law) agreements, in addition to the ordre public rule.

  12. Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?

    Yes – in addition to the general requirement that the dispute must be concerned with the legal relations between the parties, only disputes settled by agreement pursuant to Norwegian law may be referred to arbitration. For instance, parties cannot settle disputes concerning criminal acts or other disputes involving public concerns, while disputes concerning the civil law implications of competition law matters may be referred to arbitration. There has not been any specific evolution in this regard in recent years.

    The tribunal's competence may be challenged. This also includes whether the parties are entitled to refer the dispute to arbitration – a question that the tribunal considers ex officio.

    If a Norwegian court finds that the subject matter of the dispute was incapable of settlement by arbitration pursuant to Norwegian law, recognition and enforcement of the arbitral award may be refused or the award may be set aside.

  13. In your country, are there any restrictions in the appointment of arbitrators?

    Arbitrators must be impartial and independent from the parties and qualified for the task. Before undertaking the assignment, each arbitrator must inform the parties of any circumstances which may question his or her impartiality or independence. Within these requirements, the parties are free to choose and nominate arbitrators. However, the restrictions are not mandatory and can therefore be departed from in the arbitration agreement.

    There are few mandatory requirements for the tribunal in the Arbitration Act. The parties are free to stipulate specific requirements for the tribunal in the arbitration agreement (eg, imposing specific qualification requirements for the arbitrators, a different number of arbitrators or a different appointment procedure – except in relation to each party's right to seek the ordinary courts’ help in order to nominate one or more arbitrators when the parties cannot agree).

  14. Are there any default requirements as to the selection of a tribunal?

    Unless the parties agree otherwise, the tribunal will consist of three arbitrators. Arbitrators must be impartial, independent and qualified.

    If the parties fail to agree on the nomination of three arbitrators, they must each nominate one arbitrator within one month of the other party's request. The nominated arbitrators will then jointly appoint a chair. The parties may request help from the ordinary courts if they cannot agree on the nomination of one or more arbitrators. The court's nomination cannot be appealed.

  15. Can the local courts intervene in the selection of arbitrators? If so, how?

    If the appointment of an arbitral tribunal cannot be agreed on, the parties can demand that the local courts appoint the arbitrators. The courts may also play a part if the appointment of an arbitrator is challenged.

  16. Can the appointment of an arbitrator be challenged? What are the grounds for such challenge? What is the procedure for such challenge?

    The appointment of an arbitrator can be challenged, provided that there are circumstances that question his or her impartiality, independence or qualifications. In practice, the latter requires that the arbitration agreement has identified specific qualifications for arbitrators. However, if the arbitrator's qualifications are evidently inadequate, the appointment can be challenged even if the parties have not agreed on specific qualification requirements. A party cannot use circumstances that are already familiar to the party in order to challenge an appointment, provided that the party contributed to the appointment.

    Unless agreed otherwise, a party which objects must submit a written reasoned challenge before the tribunal within 15 days of the party becoming aware of the relevant circumstances. The tribunal will reach a decision on the objection unless the arbitrator withdraws from his or her assignment or the other party agrees with the objection. The tribunal’s decision can be appealed to the ordinary courts within one month from the decision is received by the parties. The ordinary court's decision cannot be appealed. Further, the same objection cannot be used as an invalidating factor or obstacle against recognition and enforcement of the award.

    Save for any agreement to the contrary, new arbitrators will be appointed pursuant to the same appointment procedure.

    We note that any objection to jurisdiction must be raised no later than in the party's statement of defence, which implies that the party's participation in the appointment of arbitrators does not prevent it from making a jurisdictional objection. However, if the party's delay is justifiable (eg, the objection was raised immediately after it became aware of the situation), the tribunal may accept the objection even though it is overdue.

    If an arbitrator becomes de jure or de facto unable to perform his or her functions, or for other reasons fails to act without undue delay, his or her assignment will be terminated if:

    • he or she withdraws from the assignment;
    • the parties agree on termination; or
    • on the request of one of the parties, the ordinary court rules that he or she should be terminated (court decisions cannot be appealed).

    Save for any agreement to the contrary, new arbitrators will be appointed pursuant to the same appointment procedure.

  17. What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?

    Save for any agreement to the contrary, new arbitrators will be appointed pursuant to the same appointment procedure.

  18. Are arbitrators immune from liability?

    No, arbitrators must perform their tasks pursuant to their appointment agreements. The agreements are subject to general contract law principles and thus arbitrators may in principle be held liable for breach of contract. However, the threshold to impose liability is likely intent or gross negligence.

  19. Is the principle of competence-competence recognised in your country?

    Yes, the tribunal decides its own jurisdiction (eg, whether the dispute may be referred to arbitration and objections over the existence or validity of the arbitration agreement).

    Provided that the tribunal finds that it has jurisdiction before making its award, the parties may appeal the decision to the ordinary courts within one month. A jurisdiction or competence objection may be raised as grounds for setting aside the award or rejecting the enforceability of the award.

    Any objection to jurisdiction must be raised no later than in the party's statement of defence. This implies that the party's participation in the appointment of arbitrators does not prevent it from making a jurisdictional objection. However, if the party's delay is justifiable (eg, the objection was raised immediately after it became aware of the situation), the tribunal may accept the objection even though it is overdue.

  20. What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?

    Arbitration agreements are enforceable in Norway. The Norwegian courts will dismiss claims or actions subject to arbitration at a party’s request, provided that the request is made before or at the latest when reviewing the merits of the claim or action. The party which asserts that the claim or action is subject to arbitration must prove the existence of the arbitration agreement.

    If one of the parties claims that the arbitration agreement is void, the court has jurisdiction to decide on its validity (and the rest of the case, provided that the agreement is actually declared void). However, if arbitral proceedings are already commenced when the action is brought before an ordinary court, the court will dismiss the action, unless it is clear that the arbitration agreement is void. If the arbitral tribunal has declared that it has jurisdiction, the decision can be appealed to the ordinary courts.

  21. How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?

    This depends on the arbitration agreement. If the agreement does not govern the initiation of proceedings, the arbitration is considered commenced when the defendant is notified that the dispute will be tried by arbitration. Under the OCC rules, however, be aware of article 5: not paying the registration fee within the time limit has the effect that the proceedings will not be deemed to have been initiated until the date the payment was actually made.

    Arbitral proceedings must be carried out as set out in the arbitration agreement and in accordance with the Arbitration Act. However, the act contains few specific procedural rules. Within the boundaries of the act and the arbitration agreement, the proceedings will be carried out as the tribunal deems appropriate. Arbitration in Norway tends to rely on the Dispute Act 2005, which governs civil procedure in Norway.

    There are no key provisions in the Arbitration Act relating to limitation periods or time barring.

  22. In what circumstances is it possible for a state or state entity to invoke state immunity in connection with the commencement of arbitration proceedings?

    The Arbitration Act does not regulate questions related to state immunity. To what extent one party to the proceedings may rely upon state immunity must be assessed by the tribunal according to international law.

  23. What happens when a respondent fails to participate in the arbitration? Can the local courts compel participation?

    If the respondent fails to submit a defence without reasonable cause, the arbitral tribunal will continue the proceedings. Failure to submit a defence will not be deemed an acceptance of the claimant's claim. If the respondent does not appear at the hearing or fails to submit evidence, the tribunal may decide the case based on the facts at hand. The arbitral tribunal and local courts cannot compel the parties to cooperate.

  24. Can local courts order third parties to participate in arbitration proceedings in your country?

    Neither the Tribunal nor the local courts can order third parties to participate in the arbitration proceedings. The arbitral tribunal or a party with the consent of the arbitral tribunal may ask the court to take testimony from parties and witnesses and take other evidence.

  25. What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?

    Provided that the parties have not agreed otherwise and on the request of one of the parties, the tribunal may grant interim measures necessary due to the subject matter of the dispute (eg, preserve evidence substantial to the case). However, interim measures are not subject to enforcement by the ordinary courts.

    The parties may request interim measures from the courts before or during arbitral proceedings (ie, security attachments and preliminary injunctions), pursuant to Chapters 32 to 34 of the Dispute Act.

  26. Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence? Can local courts compel witnesses to participate in arbitration proceedings?

    The parties submit relevant evidence to the arbitral tribunal. The arbitral tribunal (or the parties with the tribunal's acceptance) can request the local court's assistance in taking or hearing evidence.

    All kinds of evidence are acceptable. The arbitral tribunal can refuse evidence that obviously has no significance to the case, and it can limit the production of evidence so that there is a reasonable relationship between the amount of evidence and the significance that the dispute has for the parties.

  27. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country?

    No specific ethical codes apply to arbitrators in Norway. Counsel is usually an attorney, who is bound by the applicable codes of ethics.

  28. In your country, are there any rules with respect to the confidentiality of arbitration proceedings?

    Arbitral proceedings and awards are not subject to confidentiality, unless the parties agree otherwise.

  29. How are the costs of arbitration proceedings estimated and allocated?

    Save for any agreement with the parties to the contrary, the arbitral tribunal determines its own remuneration. The parties are jointly liable for the tribunal’s costs. The arbitral tribunal may order a party to pay the other party's costs to the extent it deems appropriate.

    The arbitral tribunal can order security for its own costs, but not for the parties' costs.

  30. Can pre- and post-award interest be included on the principal claim and costs incurred?

    The tribunal may award interest in accordance with the law applicable to the dispute. The penalty interest rate pursuant to Norwegian law per 1 July 2019 is 9.25% a year, and is subject to adjustment twice a year. Such penalty interest will apply for the principal claim when the claim is due (damages claims are due 30 days after notice requiring payment has been given) and for the costs incurred when the time limit for paying the award has expired.

  31. What legal requirements are there in your country for the recognition and enforcement of an award? Is there a requirement that the award be reasoned, i.e. substantiated and motivated?

    Arbitral awards must be made in writing and signed by all the arbitrators. It is sufficient that the majority of the arbitrators have signed the award, provided that the reason for the minority’s refusal is stated in the award.

    Unless otherwise agreed by the parties, the award must state:

    • the reasons on which it is based;
    • whether it is unanimous and, if it is not, which of the arbitrators that are dissenting and on what grounds; and
    • the time and place of the award.

    Further, a signed duplicate of the award must be sent to the district court to be kept in its records.

    Both Norwegian and foreign arbitral awards are considered enforceable in Norway. The enforcement request must be sent to the local enforcement authorities or the local district court, depending on whether the award is Norwegian or foreign.

    The recognition or enforcement of an arbitral award may be refused if:

    • one of the parties to the arbitration agreement lacks legal capacity, or the arbitration agreement is invalid under the laws agreed by the parties or, failing such agreement, under the law of the jurisdiction in which the arbitral award was made;
    • the party against which the arbitral award is being invoked was not given sufficient notice of the appointment of an arbitrator or the arbitration, or was not given an opportunity to present its case;
    • the arbitral award falls outside the scope of the tribunal’s jurisdiction;
    • the composition of the arbitral tribunal was incorrect;
    • the arbitral procedure was contrary to the law of the place of arbitration or the parties’ agreement, and it is obvious that this may have affected the decision; or
    • the arbitral award is not yet binding on the parties or it has been set aside (permanently or temporarily) by a court at the place of arbitration or by a court in the jurisdiction of the law which has been applied to the dispute.

    The courts will ex officio refuse recognition and enforcement of an arbitral award if:

    • the dispute cannot be determined by arbitration under Norwegian law; or
    • recognition or enforcement of the arbitral award would be contrary to public policy (ordre public).

    If the reason for refusing recognition or enforcement affects only part of the award, only that part will be refused.

  32. What is the estimated timeframe for the recognition and enforcement of an award? May a party bring a motion for the recognition and enforcement of an award on an ex parte basis?

    The estimated timeframe for the recognition of an award can be a few weeks, however, substantive objections to the validity of the award may delay the process. The timeframe for enforcement can be similar, but the enforcement procedure may vary depending on what kind of goods the enforcement is related to. Foreclosures related to real property will take longer. Normally, we estimate 2-3 months from the request is sent to the court until security is established in the defendant's assets.

  33. Does the arbitration law of your country provide a different standard of review for recognition and enforcement of a foreign award compared with a domestic award?

    No, the same standard apply to a foreign award and a domestic award.

  34. Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?

    No, but the award may be unenforceable in certain instances.

  35. Can arbitration awards be appealed or challenged in local courts? What are the grounds and procedure?

    Mistakes in computation or any clerical or typographical errors may be corrected by the tribunal ex officio within one month of the issue of the award. The tribunal will hear the parties before making a correction. If the tribunal finds that the request is justified, it must make the correction within one month of the receipt of the request.

    Save for any deviating agreement between the parties, the tribunal may also make an additional award on claims brought before it under the arbitral proceedings which should have been included in the original award. Any additional awards must be requested by one of the parties within one month of the receipt of the original award. The additional award must be made within two months of receipt of the request.

    An arbitral award cannot be appealed unless agreed by the parties. However, awards may be set aside by a nullity procedure before the ordinary courts if:

    • one of the parties to the arbitration agreement lacks legal capacity, or the agreement is invalid under the laws to which the parties have agreed or, failing such agreement, under Norwegian law;
    • the party bringing the action for setting aside the award was not given sufficient notice of the appointment of an arbitrator or of the arbitration, or was not given an opportunity to present its case;
    • the arbitral award falls outside the scope of the arbitral tribunal’s jurisdiction;
    • the composition of the arbitral tribunal was incorrect; or
    • the arbitral procedure was contrary to law or the parties’ agreement and it is obvious that this may have affected the decision.

    When the issue of an arbitral award’s validity is brought before the courts, the court will set aside the award if:

    • the dispute was not capable of being determined by arbitration under Norwegian law; or
    • enforcement or recognition of the arbitral award is contrary to public policy.

    If the grounds for invalidity affect only part of the award, only that part will be considered invalid.

    The nullity procedure, by way of issuing a writ before the ordinary courts, must be initiated within three months of receipt of the award. However, if the tribunal corrects mistakes in the award, makes an additional award or handles any request for any corrections or additional awards, the deadline for initiating a nullity procedure before the courts is three months of receipt of the decision.

    If the court finds grounds to set aside the award it may, at the request of a party, adjourn the action for setting aside the award and refer the case back to the tribunal for further processing and a new decision if the court finds that this may result in the reversal of the grounds for setting aside the award.

    Setting aside an arbitral award implies that the arbitration agreement again becomes effective, unless otherwise agreed by the parties or implied in the judgment.

  36. Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?

    No.

  37. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

    In principle, enforcement cannot be carried out against assets owned by a state, except if the assets are related to the state's regular commercial business.

  38. In what instances can third parties or non-signatories be bound by an award? To what extent might a third party challenge the recognition of an award?

    A third party can be bound by an arbitration agreement if the subject matter of the agreement is transferred to such third party. Further, third parties can in some instances be bound by an arbitration agreement if they make direct claims against one of the parties to the agreement based on the agreement.

    According to Norwegian rules on the binding force of judgments, arbitral awards are binding on third parties to the same extent as the third parties would have been bound by an equivalent agreement regarding the subject matter of the award.

    The Arbitration Act has no specific regulation regarding to what extent a third party may challenge the recognition of an award.

  39. Have courts in your jurisdiction considered third party funding in connection with arbitration proceedings recently?

    No, we are not aware of third party funding having been raised as in issue in Norwegian arbitration proceedings recently. However, third party funding is a hot topic in Norway in general – irrespective of the dispute being subject to arbitration or not.

  40. Is emergency arbitrator relief available in your country? Is this frequently used?

    This is not available under the Arbitration Act, and thus it will depend on the arbitration agreement. It is not commonly used in Norway. The parties will have recourse to request interim measures before the ordinary courts even though the dispute itself is subject to arbitration.

  41. Are there arbitral laws or arbitration institutional rules in your country providing for simplified or expedited procedures for claims under a certain value? Are they often used?

    The Arbitration Act has no special regulations for small claims. The rules of Oslo Chamber of Commerce offers a simplified, fast track procedure. This procedure is not related to claims under a certain value. The precondition for the simplified fast track-procedure is that the parties agree to it.

  42. Have measures been taken by arbitral institutions in your country to promote transparency in arbitration?

    The Arbitration Act itself, as in force from 2004, has to provisions to provide transparency in arbitration. Firstly, the duty of confidentiality will only apply when the parties have so agreed. Secondly, to ensure availability at a later stage, a signed copy of the award shall be sent to the local court and archived there. However, this is a rule commonly ignored.

  43. Is diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) actively promoted in your country? If so, how?

    There is a growing recognition in the Norwegian arbitration community that one should seek more diversity, however, we are not aware of any statistics evidencing any specific results.

  44. Have there been any recent court decisions in your country considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?

    Not to our knowledge.

  45. Is corruption an issue that is regularly raised in your jurisdiction? What standard do local courts apply for proving of corruption?

    Corruption is very rarely an issue. Norway ranks among the top ten nations with the least corruption in Transparency Internationals Corruption Index.

  46. Have there been any recent court decisions in your country considering the definition and application of “public policy” in the context of enforcing or setting aside an arbitral award?

    Not to our knowledge.

  47. Have there been any recent court decisions in your country considering the judgment of the Court of Justice of the European Union in Slovak Republic v Achmea BV (Case C-284/16) with respect to intra-European Union bilateral investment treaties or the Energy Charter Treaty? Are there any pending decisions?

    Not to our knowledge.

  48. Have there are been any recent decisions in your country considering the General Court of the European Union’s decision Micula & ors (Joined Cases T-624/15, T-694/15 and T-694.15), ECLI:EU:T:2019:423, dated 18 June 2019? Are there any pending decisions?

    Not to our knowledge.