Background

Concept of sovereign immunity

What is the general approach to the concept of sovereign immunity in your state?

Denmark applies the restrictive theory on sovereign immunity. The restrictive theory on sovereign immunity entails that state actions are qualified either as actions pertaining to the sovereign capacity of a state (acta de jure imperii) or as actions pertaining to the private capacity of a state (acta de jure gestionis).

Actions that are a reflection of the sovereign capacity of a given state (acta de jure imperii), such as exercising sovereign power, are covered by immunity. Consequently, the state cannot be party to court proceedings for actions reflecting acta de jure imperii, nor can state assets be subject to enforcement proceedings.

Actions that concerns a private or economic transaction (acta de jure gestionis) of the state, such as entering into lease agreements, are generally not covered by state immunity.

Legal basis

What is the legal basis for the doctrine of sovereign immunity in your state?

Denmark does not have specific law governing sovereign immunity. The legal basis for sovereign immunity is found in customary international law, which forms part of Danish law by means of case law.

Although there is no specific law governing sovereign immunity, the principles of sovereign immunity are clearly reflected in the Act on Foreign State Ships from 1938. Pursuant to section 2 of the act, foreign state ships that carry out non-commercial acts enjoy jurisdictional immunity, while ships that carry out commercial acts do not. This provision clearly reflects the restrictive theory on sovereign immunity.

Further, Danish law on sovereign immunity is in line with The United Nations Convention on Jurisdictional Immunities of States and Their Property (UNCSI), which has been signed but not ratified by Denmark. The principles in the provisions laid down in the UNCSI are, however, generally accepted to articulate Danish law on sovereign immunity.

In respect of diplomatic immunity, Denmark is party to the Vienna Convention on Diplomatic Relations as well as the Vienna Convention on Consular Relations.

Multilateral treaties

Is your state a party to any multilateral treaties on sovereign immunity? Has the state made any reservations or declarations regarding the treaties?

Denmark is party to the Vienna Convention on Diplomatic Relations from 1961 and to the Vienna Convention on Consular Relations from 1963. Denmark has not made any reservations or declarations regarding the two conventions.

Denmark has also signed, but not ratified, the UNCSI from 2004. Denmark has made no declarations or reservations concerning the UNCSI. Although the UNCSI is not (yet) in force, it is deemed to reflect customary international law. Therefore, as mentioned above, the provisions in the UNCSI are generally accepted to reflect Danish law.

Denmark has not signed the 1972 European Convention on State Immunity.

Jurisdictional immunity

Domestic law

Describe domestic law governing the scope of jurisdictional immunity.

Denmark does not have a specific law governing sovereign immunity, but the legal basis for sovereign immunity is found in customary international law and national case law, see question 2. In principle, all organs and instrumentalities could be subject to jurisdictional immunity; however, it is not the nature of the specific organ, which dictates whether jurisdictional immunity applies. Rather it is the qualification of the specific action that decides whether jurisdictional immunity applies (ie, whether the action can be qualified as acta de jure imperii or as acta de jure gestionis).

While Danish law does not contain specific law governing state sovereign immunity, Danish law does contain a few specific provisions prohibiting enforcement of interim relief against foreign state property.

Danish case law on state immunity is limited, but there have been a few cases over the years concerning immunity of foreign embassies. These cases confirm the application of the restrictive theory. When deciding whether an act should be considered de acta de jure imperii or acta de jure gestionis, Danish will look at the nature of the action.

In a case from 1982 (UfR.1982.1128.H) concerning a dispute between the Embassy of Czechoslovakia and a Danish contractor regarding payment for additional work under a construction contract, the Embassy of Czechoslovakia claimed that it enjoyed jurisdictional immunity. The Danish Supreme Court concluded that the embassy did not enjoy jurisdictional immunity, as the Embassy of Czechoslovakia had entered into a construction contract governed by private law (acta de jure gestionis). Consequently, the Supreme Court had jurisdiction and was able to decide on the matter.

In another similar case from 1992 (UfR.1992.453.H) pertaining to a tenancy agreement, signed by the French ambassador to Denmark, the French ambassador claimed immunity. However, in accordance with the 1982 case cited above, the Supreme Court decided that the ambassador did not enjoy immunity as the dispute was connected to an agreement governed by private law (acta de jure gestionis). The rules on sovereign immunity did, therefore, not apply.

In a later case from 1999 (UfR.1999.939.H), the Embassy of Pakistan refused to pay 30,000 DKK for six airplane tickets, which the embassy had bought. The Danish Supreme Court concluded that the Embassy of Pakistan did not enjoy immunity, as the dispute was of a private character (acta de jure gestionis).

State waiver of immunity or consent

How can the state, or its various organs and instrumentalities, waive immunity or consent to the exercise of jurisdiction?

The state, or its various organs and instrumentalities, can waive immunity either explicitly by clear waiver or by implication by entering into an agreement de jure gestionis.

The Vienna Convention on Diplomatic Relations, which Denmark is a party to, includes provisions governing the question in relation to diplomatic relations. According to article 32(1) of this Convention, a State can waive the immunity that covers diplomatic agents and other persons enjoying immunity under the convention. Such waiver must be express, as in article 32(2), and the waiver must expressly state whether it also covers enforcement immunity, see article 32(4), as such waiver by default only covers jurisdictional immunity. To include enforcement immunity as well, a separate waiver is necessary.

It further follows from article 7(1)(a-c) of the UNCSI that a state can waive its immunity by international agreement, in a written contract, by a declaration before the court or by a written communication in a specific proceeding.

In which types of transactions or proceedings do states not enjoy immunity from suit (even without the state’s consent or waiver)? How does the law of your country assess whether a transaction falls into one of these categories?

Actions of the state which qualify as acta jure gestionis do not enjoy jurisdictional or enforcement immunity.

The Danish legislative framework does not provide guidance as to how the assessment of a specific action or conduct of a state entity and guidance must therefore be sought in case law. The relevant cases have been cited above, but are also mentioned here for easy reference.

  • In a Supreme Court judgment from 1982 (U.1982.1128.H), the Embassy of Czechoslovakia did not enjoy immunity from a dispute emanating from a construction contracts, as the contract was a private contract governed by private law.
  • In the later Supreme Court judgment from 1992 (U.1992.453.H), the Supreme Court stated that entering into a tenancy agreement was a private affair, and the French ambassador did therefore not enjoy immunity. In the Supreme Court judgment from 1999 (U.1999.939.H), the Supreme Court found that the purchase of plane tickets was of a private character, and the Embassy of Pakistan did therefore not enjoy immunity.

In conclusion, Danish courts will look at the nature of a specific conduct or action, when determining whether the conduct or action should be considered acta jure gestionis or as acta jure imperii. To categorise the conduct or action as acta jure gestioni, the courts will place particular emphasis on the private nature or character of the action in question.

When looking at international legislation, the Vienna Convention on Diplomatic Relations includes examples of transactions, which are not covered by diplomatic immunity. The convention defines acts de jure gestionis in relation to diplomatic agents in article 31(1)(c) by stating that ‘an action relating to any professional or commercial activity exercised by the diplomat in the receiving State outside his official functions’ is not covered by the jurisdictional immunity.

If one of the exceptions to sovereign immunity set out above applies, is there any related principle that could prevent a court having jurisdiction over the state?

It follows from section 19 of the Danish Constitution that foreign policy is the government’s prerogative. Scholarly writings have therefore discussed whether the courts should dismiss cases which directly or indirectly could encroach upon the prerogative of the government. This could, for example, be the question of whether or not to recognise a State or to exercise judgment of whether foreign states have acted in breach of international law. There is little or no case law on this matter, and therefore it has yet to be seen whether the courts will dismiss cases or exercise self-restraint if a judgment will encroach upon the prerogative of the government.

Proceedings against a state enterprise

To what extent do proceedings against a state enterprise or similar entity affect the immunity enjoyed by the state? Is there precedent for piercing the corporate veil to subject the state itself to those proceedings?

The question of whether a state-owned enterprise will enjoy jurisdictional immunity under Danish law will depend on whether their actions qualify as acta de jure imperii or gestionis. If actions of a state-owned enterprise are considered acta de jure impirii, the enterprise will enjoy jurisdictional immunity.

Consequently, Danish law is in line with article 10(3) of the United Nations Convention on Jurisdictional Immunities of States and Their Property. Pursuant to this article, state enterprises involved in commercial transactions do not enjoy immunity.

In a case from 1942 (UfR.1942.1002/1Ø) a vessel belonging to an enterprise, which was owned by the Soviet Union, was located in the harbour of Copenhagen. The Eastern High Court concluded that the vessel could not be subject to arrest, as it was ultimately owned by the Soviet Union and therefore subject to immunity. Given the age of the case and the fact that the judgment was passed during the German occupation of Denmark, it is likely that the court would have taken a different approach today. In reality, the ship was in the possession of Germany, and it is likely that this had an impact on the judgment. In 1941, the Danish Ministry of Foreign Affairs wrote a letter to the Soviet representation in Denmark stating that it was of the opinion that the vessel was not covered by immunity as it was a merchant ship.

Standing

What is the nexus the plaintiff needs to have standing to bring a claim against a state?

Provided the principle of state immunity does not apply to the specific case, a plaintiff must demonstrate legal or legitimate interest in bringing the claim before a Danish court. Legal interest is established when the claim is legal and legally assessable and of current interest. The plaintiff also has to demonstrate actual and specific interest in the case and the claim. If the specific claim and the plaintiff comply with all these criteria, the court will accept standing and hear the case on its merits.

Nexus of forum court

What is the nexus the forum court requires to exercise jurisdiction over a state if the property or conduct that forms the subject of the claim is outside the forum state’s territory?

There are no specific provisions governing the jurisdiction of Danish courts in cases involving other state.s The jurisdiction of Danish courts is thus in civil matters determined by the general provisions on territorial jurisdiction set out in the Danish Administration of Justice Act, the Brussel I Regulation and the Lugano Convention. Generally, the state entity should be sued at the place of its domicile.

Interim or injunctive relief

When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what interim or injunctive relief is available?

Interim and injunctive relief can be applied against state parties, if the specific state is not subject to immunity (jurisdictional and enforcement).

The interim or injunctive reliefs follows from the Danish Administration of Justice Act, Chapter 40, and include prohibitory/restraining injunctions and mandatory/enforcement injunctions.

The party filing for an injunctive relief must prove, on a balance of probabilities, that the party holds the right, for which protection by way of injunctive relief is sought. Namely that the conduct of the opposing party necessitates the granting of the injunction, and that the ability of the party to enforce his or her right will be lost if the party had to await a full trial. The burden of proof thus lies with the party filing for an injunction.

The Danish Administration of Justice Act, Chapter 56, also provides for the possibility of levying attachments (‘arrest’) for the security of a monetary claim. Arrest of ships and cargo is further regulated in the Danish Merchant Act chapter 4. The rules laid down in the Danish Merchant Act supplement and modify the rules in the Danish Administration of Justice Act. However, according to the Danish Merchant Act arrest can only be carried out for security for a maritime claim as defined in section 91 of the Danish Merchant Act.

A similar interim relief is also available under the Danish Act on Foreign State-owned Vessels. The fact that a ship or its cargo is owned or operated by foreign states does not exempt them from the applicability of the options under Danish law to file for a judicial detention of the ship. Thus, it is possible to apply the rules in the Danish Administration of Justice Act and the Merchant Shipping Act to enforce an arrest of a ship as mentioned above.

Final relief

When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what type of final relief is available?

The fact that a state is subject to a proceeding does not change the types of final relief available to the court.

Danish judgments can be divided into two main categories: declaratory judgments and judgments providing for enforcement. The first category includes judgments that order the losing party to carry out or avoid carrying out a specific performance. The other category includes judgments that are enforceable before the bailiff’s court, for example, judgments ordering the losing party to pay a specific amount of money or to hand back a specific asset.

It will not be possible to enforce any of the judgment types in situations where the state enjoys enforcement immunity.

Service of process

Identify the court or other entity that must be served with process before any proceeding against a state may be issued.

Danish law does not contain special provisions on service of process prior to the service of the writ of summons on the defendant state.

How is process served on a state?

The process of service is under Danish law handled by the competent court (ie, the specific court with the inter-territorial jurisdiction). The plaintiff is therefore only required to identify the defendant state in the writ of summons, allowing the court to serve the writ of summons on the right person or entity.

In Denmark, all state organs have the capacity to sue and be sued. Therefore, a claim brought against the Danish state must be targeted at the state organ, which has carried out the act for which the plaintiff wishes to bring a claim.

The UNCSI also prescribes ways in which to serve process. Article 22 states that process can be served in accordance with any applicable international convention binding on the state of the forum and the state concerned, or in accordance with any special arrangement for service between the claimant and the state concerned.

If no such conventions or arrangements exist, process can be served by transmission through diplomatic channels or by any other means accepted by the state concerned.

Judgment in absence of state participation

Under what conditions will a judgment be made against a state that does not participate in proceedings?

The rules on default judgments are the same regardless of whether the absent party is a state or a private entity. In cases where a state is not represented by state officials, but the state is represented by an attorney, proceedings will take place as usual with the attorney representing the interests of the state.

However, if a state does not participate in the proceedings and is not represented by an attorney, the court can pass a judgment by default, only assessing the validity of the plaintiff’s claim, see sections 362 and 260 of the Danish Administration of Justice Act. If the claim seems valid, the court will deliver a judgment in accordance with the claim. If it does not seem valid, the court will reject the claim and dismiss the case.

Normally, a claim is well presented and substantiated in the writ of summons, and the courts will therefore often deliver a judgment in accordance with the claim. However, the court is obliged to consider Denmark’s obligations under international law. A Danish court would therefore consider the question on immunity before passing a judgment by default. This principle was applied in a case from 2000 (UfR.2000.478.Ø), where an international organisation UNICEF enjoyed jurisdictional immunity despite the fact that UNICEF did not participate in the proceedings. UNICEF is an international organisation, and the case is therefore not directly comparable to the situation, where a state does not participate. However, it is likely that the courts’ approach would be the same.

Article 8(4) of the UNCSI is also in line with the principle demonstrated in the case from 2000. Accordingly, failure of a state to appear before a court and participate in the proceedings will not be interpreted as a waiver of immunity.

Enforcement immunity

Domestic law

Describe domestic law governing the scope of enforcement immunity.

There is no domestic law governing the scope of enforcement immunity. However, the Act on Foreign State Ships, which was also mentioned under question 2, in section 3 of the act regulates that foreign state ships not carrying out commercial actions enjoy executional immunity. The Danish rules on enforcement immunity are based on customary international law, and are similar to what applies for the jurisdictional immunity, see question 4.

Article 19(c) of the UNCSI states that property intended for commercial purposes only are not covered by enforcement immunity. This approach is in accordance with the differentiation between acts related to state power (acts de jure imperii) and commercial acts (acts de jure gestionis), which, in principle, apply in Denmark.

Application of civil procedure codes

When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?

The general rules on enforcement in the Danish Administration of Justice Act, chapter 45, apply equally to state, private entities and civilians. Consequently, there are no general provisions exempting the enforcement of judgments against states. However, assets covered by enforcement immunity will be exempted from these enforcement provisions. For instance, state property used for state purposes is covered by enforcement immunity.

Consent for further enforcement proceedings

Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?

A prior submission to the jurisdiction of the court will not constitute consent for enforcement proceedings. However, such submission will often constitute consent to jurisdictional proceedings.

According to the UNCSI article 18 and 19, enforcement proceedings may not be carried out, unless the state has given specific consent in one of the ways described in the articles. Prior submission is not among the exceptions mentioned, and it is therefore assumed that a prior submission will not be enough to constitute consent to enforcement proceedings on property used by the state in relation to acta de jure imperii.

Property or assets subject to enforcement or execution

Describe the property or assets that would typically be subject to enforcement or execution.

Property, used for commercial purposes, will be subject to enforcement in accordance with customary international law. Such assets include state-owned real estate, vessels, airplanes, etc, which are owned as part of a commercial activity and operated on market conditions.

UNCSI article 2(1)(c) defines ‘commercial transaction’ as (i) any commercial contract or transaction for the sale of goods or supply of services, (ii) any contract for a loan or other transaction of a financial nature, including any obligation of guarantee or of indemnity in respect of any such loan or transaction, and (iii) any other contract or transaction of a commercial, industrial, trading or professional nature. Assets connected directly to such transactions will not enjoy enforcement immunity in Denmark.

Assets covered by enforcement immunity

Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.

Assets that are normally covered by enforcement immunity include the assets that are very closely connected to the state’s performance of its sovereignty. Some of these assets are mentioned in articles 22 and 24 of the Vienna Convention on Diplomatic Relations:

  • diplomatic premises;
  • vehicles belonging to the embassy;
  • documents related to the embassy;
  • shipments to and from the embassy (the diplomatic bag); and
  • other types of equipment belonging to the embassy.

Other examples of assets covered by enforcement immunity include warships, vessels carrying out acts directly related to the state, planes carrying out acts related to the state power, for example, planes transporting government officials.

Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.

As described under question 17, the general rules on enforcement in the Danish Administration of Justice Act, Chapter 45, apply equally to state, private and civilian owned property, subject only to the restriction of immunity. Whether assets are subject to enforcement immunity is determined by the nature of the assets (ie, whether the specific assets are used for commercial or state purposes). However, article 21(c) of the UNCSI states that ‘property of the central bank or other monetary authority of the State’ is always considered as property intended for state-use only, and is therefore always covered by immunity. UNCSI is assumed to reflect Danish rules of law on immunity and it is, therefore, expected that a Danish court would follow this approach.

Test for enforcement

Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.

If the Danish court has decided that the asset in question is not covered by enforcement immunity, the court will not apply further test, but follow through with the enforcement.

Service of arbitration award or judgment

How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?

Arbitration awards and court judgments do not require formal service in order to be valid and binding on the parties. However, enforcement of an award or a judgment must take place via the Danish bailiff’s court, in section 487(1) of the Danish Administration of Justice Act. After receiving the request for enforcement, the bailiff’s court will serve the debtor with notice of the enforcement proceedings, including information relating to time and place for the enforcement proceedings.

If the bailiff’s court fails to notify the debtor this might lead to the ineffectiveness of the enforcement. The enforcement proceedings are allowed to take place in case of the debtor’s absence. However, in cases where the debtor is a state, it will be necessary for the bailiff’s court to consider the question of enforcement immunity in accordance with customary international law and UNCSI article 19, provided the question has not already been tried before the court, before the court hearing the case.

History of enforcement proceedings

Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?

There have been a few cases regarding enforcement proceedings against states in Denmark. None of them is based on arbitral awards.

The case from 1942 (U.1942.1002/1.Ø concerned a vessel belonging to a state-owned shipping company of the Soviet Union. The vessel was located in the harbour of Copenhagen. The Eastern High Court concluded that the vessel could not be subject to arrest proceedings because the vessel was ultimately owned by the Soviet Union and, therefore, covered by immunity. As mentioned under question 8, this case does not reflect Danish law on immunity.

In another case from the High Court from 2001 (TBB 2001.456) relating to diplomatic immunity, an Iranian diplomat was ordered to move out of a tenancy. Although he did not enjoy jurisdictional immunity because the case derived from an acta de jure gestionis, he was still covered by enforcement immunity due to the statute of the Vienna Convention. Consequently, the judgment could not be enforced and the Iranian diplomat could, therefore, not be physically forced out of the tenancy.

In the Supreme Court cases described above from 1982 (UfR.1982.1128.H) and 1992 (case no. 1992.453.H), also relating to diplomatic immunity, the Supreme Court found that the jurisdictional immunity did not apply, because of acta de jure gestionis. In both cases the states lost; however, the judgments were never enforced as the states still enjoyed enforcement immunity.

Public databases

Are there any public databases through which assets held by states may be identified?

There is no public database in which assets held by states can be identified directly. However, different national registers, such as the public register of real estate and the public register of companies, render it possible to identify the legitimate owner of real estate and companies.

Court competency

Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?

There is no general access for the Danish courts to help identify assets held by states or other parties.

Even though Danish courts can issue a disclosure order in respect of a request from a party to a court trial, such order may be ignored by the counterpart. Failure to comply with a disclosure order can only be sanctioned by the court drawing adverse inference from such failure to comply. Consequently, a Danish court cannot force states to disclose specific information.

Immunity of international organisations

Specific provisions

Does the state’s law make specific provision for immunity of international organisations?

The Danish Law on Rights and Immunities for International Organizations include provisions covering immunity of international organisations. The law itself does not contain provisions that actually regulate the immunity for international organisations, but it allows Denmark to accede to conventions or treaties, in which an international organisation will enjoy immunity in Denmark.

Domestic legal personality

Does the state consider international organisations headquartered or operating in its territory as enjoying domestic legal personality and could such organisations be subjected to proceedings before a court or arbitral tribunal?

The founding treaty of the international organisation will often include provisions determining that the organisation enjoys domestic legal personality. For example, article 1 of the Convention on the Privileges and Immunities of the United Nations grants the UN legal personality in all member states. Another example is the host agreement between Denmark and the UN, which states that the UNICEF Supply Division, which has its headquarter in Copenhagen, enjoys domestic legal personality and immunity.

The extent of the immunity also depends on the agreement, on which the international organisation is founded. There has been one case in Denmark regarding proceedings against an international organisation. In a case from 2000 (U.2000.478.Ø) (also mentioned under question 15), the court concluded that UNICEF Supply Division enjoyed jurisdictional immunity although the case concerned a private law contract. The host agreement stated that the Supply Division enjoyed immunity in relation to any proceedings. It is very common that international organisations enjoy immunity, which is close to the concept of absolute immunity. Therefore, international organisations will often enjoy jurisdictional as well as enforcement immunity.

Immunity only applies to international organisations, which are founded on the basis of agreements that are concluded in accordance with international law. Organisations that are founded according to private law enjoy legal personality as well, but do not enjoy immunity in any situation.

Enforcement immunity

Would international organisations in the state enjoy enforcement immunity? Are there any cases where debtors sought to enforce against a state by attaching or executing assets held by international organisations?

There have not been any cases regarding the enforcement immunity of international organisations. As mentioned in question 28, the immunity of international organisations is based on the constituting treaty of the organisation. Such treaties will often include provisions on the extent to which the organisation enjoys immunity.

In the absence of such provisions, direction must be sought in the principle that a state is obliged not to disturb the functioning of an international organisation whose founding treaty the state has signed and ratified. This principle implies that states should give international organisations immunity, so that the organisations can function without interference from states.

Updates & Trends

Recent developments

Are there any other current developments or emerging trends that should be noted?

Key developments of the past year30 Are there any emerging trends or hot topics in your jurisdiction?

The recent cases within the field concern the legality of the Danish State’s use of force in relation to the wars in Iraq and Afghanistan. The courts have been very reluctant to take jurisdiction in these cases, and have dismissed them on basis of lack of legal interest. However, generally the trend is moving towards more accountability of the state and probably therefore also on the direction of a further restriction of state immunity.

The authors acknowledge the valuable assistance of student assistant Rasmus Godthaab Jespersen in producing this chapter.