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National arbitration laws
What legislation applies to arbitration in your jurisdiction?
The Arbitration Act 2004 governs arbitrations when the place of arbitration is Norway. The place of arbitration is determined by interpreting the arbitration agreement.
Are there any mandatory laws?
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.
New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?
Norway ratified the New York Convention on March 14 1961 and it entered into force June 11 1961.
Are there any reservations to the general obligations of the convention?
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.
Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction 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).
Has your jurisdiction adopted the UNCITRAL Model Law?
The Arbitration Act is largely based on the UNICITRAL Model Law, but Norway has not adopted the UNICITRAL Model Law directly.
Are there any impending plans to reform the arbitration laws in your jurisdiction?
What are the validity requirements for an arbitration agreement?
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 that apply to arbitration agreements with consumers:
- 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.
Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?
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.
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?
The Arbitration Act contains no consolidation clauses. Accordingly, the tribunal cannot consolidate separate arbitral proceedings without the parties' consent.
Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
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.
Are there any provisions on the separability of arbitration agreements?
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.
Are multiparty agreements recognised?
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).
Criteria for arbitrators
Are there any restrictions?
Pursuant to Section 13 of the Arbitration Act, 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.
What can be stipulated about the tribunal in the agreement?
The parties are free to depart from the abovementioned restrictions in the arbitration agreement (eg, imposing specific qualification requirements). This also includes other stipulations – for example, the number of arbitrators and the 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).
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?
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.
Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?
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.
How should an objection to jurisdiction be raised?
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.
Replacement of an arbitrator
Why and how can an arbitrator be replaced?
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.
Powers and obligations
What powers and obligations do arbitrators have?
Arbitrators derive their authority from the parties (ie, the arbitration agreement). As such, they must treat parties equally and allow them an opportunity to present their respective cases. However, save for any agreement to the contrary, the arbitral tribunal will conduct the arbitration as it considers appropriate (of course, subject to the Arbitration Act).
The tribunal's powers include:
- setting deadlines for writ and defence;
- determining the admissibility, relevance, materiality and weight of evidence;
- requesting assistance from the ordinary courts in taking evidence;
- appointing experts to report on specific issues (unless otherwise agreed by the parties);
- determining the language and place of arbitration (unless otherwise agreed by the parties);
- determining the applicable law (including requesting the ordinary courts to refer a question of interpretation of the European Economic Community agreement to the European Free Trade Association Court); and
- determining whether to hear the case orally or on the basis of the parties' written pleadings only (each party may in any case require an oral hearing).
Finally, the tribunal must decide the dispute based on the factual and legal arguments and evidence presented by the parties.
Liability of arbitrators
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 be held liable for breach of contract.
Communicating with the tribunal
How do the parties communicate with the tribunal?
Arbitral tribunals are free to decide on any means of communication deemed appropriate (eg, by email). However, the tribunal must discuss with the parties before making a decision. Unless otherwise agreed by the parties, the tribunal may also decide on the language to be used in the proceedings. If the tribunal decides that Norwegian will be the applicable language, the parties are free to use Danish or Swedish as well.
Unless otherwise agreed, any written communication is deemed to have been received if it is delivered to the addressee personally or to his or her place of business, habitual residence or mailing address. The communication is deemed to have been received on the day that it was delivered.
The tribunal must communicate all statements, documents and information supplied to it by one party to the other, and give the parties sufficient advance notice of any hearings or meetings of which the parties are entitled to be present.
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?
Except for any deviating agreement between the parties, the arbitrator’s majority decision will prevail. In case of equality of the votes, the chair's vote will decide the outcome. The majority may also make a decision even if the minority refuses to vote. Accordingly, the minority arbitrators need not be disqualified or replaced.
Questions of procedure may be decided by the chair or presiding arbitrator, provided that he or she is authorised to do so by the parties or other arbitrators.
Are there any disputes incapable of being referred to arbitration?
Yes – in addition to the general requirement that the dispute must be concerned with the legal relations between the parties, only disputes which the parties are entitled to settle by agreement pursuant to Norwegian law may be referred to arbitration. For instance, parties cannot settle disputes concerning criminal acts, while disputes concerning the civil law implications of competition law matters may be referred to arbitration.
Can the arbitrability of a dispute be challenged?
Yes – 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.
Jurisdiction and competence-competence
Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
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.
Starting an arbitration proceeding
What is needed to commence arbitration?
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.
Are there any limitation periods for the commencement of arbitration?
Are there any procedural rules that arbitrators must follow?
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.
Are dissenting opinions permitted under the law of your jurisdiction?
The arbitral award is decided by majority rule. If the decision is not unanimous, it must state who is dissenting and on which issues. This does not apply if the arbitration agreement states otherwise.
Can local courts intervene in proceedings?
Arbitral tribunals or the parties can ask the local courts to intervene in proceedings on specific issues set out the Arbitration Act.
Can the local courts assist in choosing arbitrators?
If the appointment of an arbitral tribunal cannot be agreed on, the parties can demand that the local courts appoint the arbitrators.
What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?
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.
In what instances can third parties be bound by an arbitration agreement or 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, because of their relationship with the parties, would have been bound by an equivalent agreement regarding the subject matter of the award.
Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?
The arbitral tribunal decides the language and location of the arbitration, unless otherwise agreed by the parties.
How is evidence obtained by the tribunal?
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.
What kinds of evidence are acceptable?
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.
Is confidentiality ensured?
Arbitral proceedings and awards are not subject to confidentiality, unless the parties agree otherwise.
Can information in arbitral proceedings be disclosed in subsequent proceedings?
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
No specific ethical codes apply to arbitrators in Norway. Counsel is usually an attorney, who is bound by the applicable codes of ethics.
Estimation & allocation
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.
Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?
The arbitral tribunal can order security for its own costs, but not for the parties' costs.
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
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.
Timeframe for delivery
Are there any time limits on delivery of the award?
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
No, but the award may be unenforceable in certain instances.
What interim measures are available? Will local courts issue interim measures pending 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.
Can interest be awarded?
Yes, the tribunal may award interest in accordance with the law applicable to the dispute.
At what rate?
The penalty interest rate pursuant to Norwegian law per January 1 2016 is 8.75% a year, and is subject to adjustment twice a year.
Is the award final and binding?
Awards are final and binding on the parties.
What if there are any mistakes?
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.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
What is the procedure for challenging awards?
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.
On what grounds can parties appeal an award?
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
- 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.
What steps can be taken to enforce the award if there is a failure to comply?
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.
Can awards be enforced in local courts?
How enforceable is the award internationally?
A Norwegian award should be enforceable in all member states of the New York Convention.
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.
Are there any other bases on which an award may be challenged, and if so, by what?
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.
How enforceable are foreign arbitral awards in your jurisdiction?
Both Norwegian and foreign arbitral awards are recognised and enforceable in Norway.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
Rules and restrictions
Are there rules or restrictions on third-party funders?
Class-action or group arbitration
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?
Are there any hot topics or trends emerging in arbitration in your jurisdiction?
There is a Nordic initiative to establish a Nordic Maritime and Offshore Arbitration institution as an alternative to London and New York.