1. What are the different types of (court) procedures in case of a commercial dispute?
In Denmark the traditional way of resolving a commercial dispute, is through arbitration or court proceedings. Mediation can occasionally be resolved to and is usually suggested as an option by the court but is not prevalent as compared to the traditional solutions. Afterall, there seems to be a growing tendency to use mediation, due to the shorter time frames related to the procedure, in addition to it is being more cost efficient.
2. What is the working language of the different (court) procedures?
The working language of the court procedures are danish and all legal documents are to be translated into danish as well.
A citizen from one of the other Nordic countries, Norway, Finland, Iceland, or Sweden, has the possibility to use documents in their own native language, except if the danish court or the counterparty demand the documents to be translated into danish.
If one of the parties to the proceedings, a witness or another person related to the case, does not have danish as native language, an interpreter will be appointed to translate to danish, ensuring that there are no misunderstandings during the proceedings.
3. When is the relevant body competent to take cognisance of the dispute?
Most of the danish court proceedings begins in one of the 24 district courts. The relevant court will be the court with jurisdiction of the case, which normally is in the defendant’s home district, unless the relevant parties has chosen otherwise.
In Denmark there is a principle that secures a possibility for almost every case to appeal the resolution to a higher legal entity. There are two higher regional courts in Denmark. One is placed in west of Denmark and, other one is in east of Denmark. Therefore, the court with jurisdiction is chosen based upon the defendant’s home district.
If the case is based on a subject of more fundamental pecuniary or a case where the interpretation of the law is not established yet, it is possible to appeal the case to the supreme court of Denmark, which only have jurisdiction in the above-mentioned cases.
Arbitration
There are different kinds of arbitral tribunals in Denmark. One is institutional arbitration, where the proceeding parties of the case loose some of their liberty, due to the stablished structure which has already been implemented. Otherwise, there is the possibility to select ad hoc arbitration, where the parties have almost complete freedom to set the arbitral tribunal.
Each arbitral tribunal has professional knowledge about different areas. It is not possible to appeal the resolution unless it is being decided between the parties of the case.
4. Which law is applicable to the different (court) procedures?
In the court proceedings a variety of danish laws are usually being employed unless the the rules concerning choice of law will determine otherwise (Rome Convention). The danish court will rule in accordance with the selected laws if it has jurisdiction.
Arbitration
There is full freedom of contract for the parties, which implies that if they agree upon certain laws, the arbitral tribunal will rule in accordance with the selected laws. Otherwise, if no laws have been chosen, the arbitral tribunal rules in accordance with the laws it considers applicable.
5. Does the judge have specific knowledge of the market?
District court
In the district court there is usually one juridical judge, to rule the case. The judge does not necessarily have content specific knowledge of the domain, that the case revolves about. It is possible to decide that the case can be acceded by two expert assessors. The expert assessors shall have an expertise that is useful to the specific case and will be used as judges.
Arbitration
During arbitration the appointed judge often has specific domain knowledge.
6. Are the procedures and the rulings confidential?
District courts
In general, the hearing is public. However, it is possible by either party to call for the hearings, or part of it, to be held by closed doors, but this is ultimately decided by the judge. The judgement is always public.
Arbitration
In general arbitration proceedings will be confidential and classified.
7. What are the costs of the different (court) procedures?
District courts
In the district court there is a baseline fee of DKK 500.
If the value at stake exceeds DKK 50,000 an additional fee of DKK 250 together with 1.2 percent of the value that exceeds DKK 50,000 is required.
The total cost of the court fee is maximized at DKK 75,000.
For cases that cannot be defined monetary, a fee of DKK 500 is required.
Furthermore, there is a court fee when the case is scheduled if the value at stake exceeds DKK 50,000. The court fee is calculated in the same way as above, with baseline fee, additional fee and 1.2 percent of the value that exceeds DKK 50,000.
This court fee cannot either exceed DKK 75,000.
Higher regional courts
The higher regional courts fee follows the same as the district courts, with the exception that the baseline fee is DKK 750.
Supreme court
If the case is being appealed to the supreme court, it follows the same principles, though the calculated court fee of the case is increased by 50% and will at minimum be DKK 1,500.
All the mentioned court fees are excluding attorney salaries.
Arbitration
Arbitration costs can be divided into the following:
There will first be a startup fee (fixed price) of DKK 3,000. Additionally, a service fee will be applied in the amount of DKK 4,000. Finally, an indicative fee for the arbitrational court (3 judges) in the amount of DKK 45,000. However, the arbitration court will calculate the cost of the proceedings.
8. Can the losing party be ordered to pay the costs of the proceedings?
District courts
In proceedings on the merits, the losing party can be ordered by the judge(s) to pay the costs of the proceedings. These costs based on the lawyer’s fee and the courts fee. Nonetheless in most cases the awarded costs from the procedures are seldom enough to cover the actual costs of the proceedings.
Arbitration
The cost of the proceedings will be arranged between the parties by the arbitrational court.
9. What is the average lead time of the different (court) proceedings?District courts
The general lead-time for cases in the district courts varies between 8-18 months. All depending on the complications of the case.
However, more than often cases last up to 24 months.
Arbitration
For arbitral tribunals the general lead-time is 6-18 months.
10. Is the judgment consigned in other EU member states and can it be enforced there? And outside the EU?
Judgements from the danish courts are enforceable in the European Union, due to the council regulation that secures mutual recognition of each judgement from the member states. Therefore, judgments from other member states of the European Union are enforceable in Denmark also.
Judgements from danish courts can generally, not be enforced in countries outside the European Union, as well as judgements from outside of the European Union cannot be enforced in Denmark.
Arbitration
Judgements from an arbitration court is by default enforceable in Denmark no matter in which country the arbitration court has been established. This is secured by the danish arbitration regulation, but also by the New York convention. Arbitral decisions from danish courts can be enforced in all other countries.
Written by Sofie Skjødt Hansen and Michael Schlichter from Virtus Advokater ApS