1. Denmark has long been favourable to arbitration. As early as 1683, arbitration was accepted in general terms in section 1-6-1 of King Christian V's Danish Code. This provision was updated some three centuries later by Law No. 181 of 24 May 1972. To ease further development, the 1972 statute was conceived as a skeleton of some ten articles consolidating the most fundamental principles of Denmark's very liberal arbitration practice, namely that arbitration can be agreed, that an arbitral award is binding and final, and that a valid arbitration clause prevents a dispute being referred to the courts. This statute also instituted rules on obtaining assistance from the ordinary courts-for instance in the event of a party refusing to participate in an agreed arbitration-and on the enforcement of arbitral awards. It also formed the basis for Denmark's ratification in 1972 of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.1

2. Use of arbitration became increasingly common in Denmark in the course of the twentieth century. Nearly all disputes in the construction sector are subject to the 'General Conditions for the Provision of Works and Supplies within Building and Engineering', 2 which provide for institutionalized arbitration through the Danish Building and Construction Arbitration Court. In practice, it has become customary for most important commercial contracts to include an arbitration clause. Furthermore, since the beginning of the last century labour disputes between unions and management have been subject to the final decision of special tribunals established under collective agreements in different industries. The procedure before these tribunals is very similar to arbitration.

3. The Danish courts have been very positive towards arbitration. This has been helped by the fact that professional judges sit as chairmen on the arbitral tribunals established by the Danish Building and Construction Arbitration Court and on the special tribunals for labour disputes. 3 Furthermore, Danish judges are often selected as arbitrators in ad hoc arbitrations.

4. In 2005, Denmark decided to take the next step by introducing a more descriptive arbitration statute, promulgated as Law No. 553 of 24 June 2005. 4 The new statute consists of forty-four articles and closely follows the 1985 UNCITRAL Model Law on International Commercial Arbitration in its selection of solutions, its wording and even in the numbering of the chapters and articles.

5. For present purposes we shall confine ourselves to briefly describing the main differences between the new Arbitration Act and the UNCITRAL Model Law:

5.1 The Act applies in principle to all kinds of arbitration, be it national or international, commercial or non-commercial. The only exclusion is arbitration that has previously been instituted under special laws. This exception principally concerns [Page48:] disputes which, pursuant to a collective labour agreement or section 22 of the statute establishing the labour tribunals, are to be resolved in accordance with a code of rules for the resolution of labour disputes dating from 1918.

5.2 Consumer cases are also arbitrable, but only if the arbitration agreement has been concluded after the dispute has arisen.

5.3 Under the new Act, as previously, there is no requirement for arbitration agreements to be in writing. The form of arbitration agreements is thus regulated by ordinary contract law, which provides that oral agreements are as binding as written agreements. In practice, however, oral agreements are often of very little value.

5.4 An arbitral tribunal may request the assistance of Danish courts to obtain a ruling from the European Court of Justice on aspects of European Union law that have a bearing on the arbitral tribunal's decision on European Union matters.

5.5 Unlike the UNCITRAL Model Law (Art. 33), the new Act does not allow parties to request the arbitral tribunal to give an interpretation of a specific point or part of the award. If the parties wish to have this right, they should agree upon it before the arbitral tribunal has rendered its award.

5.6 As far as the recognition and enforcement of foreign awards are concerned, the new Act is not limited to awards on disputes of a commercial or international nature, but expressly states in Article 38 that it applies to any kind of arbitral award, irrespective of the country in which it was rendered.

6. The numbering of the UNCITRAL Model Law has been followed in the first six chapters (Arts. 1 to 33). The Model Law's Chapter 7 on recourse against an award has become Chapter 8 (Art. 37)), and its Chapter 8 on recognition and enforcement of awards has become Chapter 9 (Arts. 38 and 39).

7. Chapter 7 of the new Act contains three articles on costs and security (Arts. 34-36), in which it is provided, inter alia, that the arbitral tribunal determines its own fees and expenses, that the parties are jointly and severally liable for the costs of the arbitral tribunal and have thirty days in which to request the courts to review the arbitral tribunal's determination of its costs, that the arbitral tribunal shall allocate the arbitration costs and legal fees between the parties, and that the arbitral tribunal may order the parties to provide security for the arbitral costs and may terminate the proceedings if such security is not provided.

8. Chapter 10, comprising Articles 40 to 44, contains provisions on the entry into force of the Act. The Act entered into force on 1 July 2005 and applies to arbitral proceedings commenced after that date. Chapter 8 on recourse against awards applies to awards made after the entry into force of the Act. Chapter 9 on recognition and enforcement of awards applies to requests for recognition or enforcement made after the entry into force of the Act.

9. In addition to the new Act, a new provision relating to arbitrators has been introduced in Denmark's criminal law in order to implement the 1999 Council of Europe Criminal Law Convention on Corruption.5 Article 304A of the Danish Criminal Code now states that attempts to bribe an arbitrator and an arbitrator's corrupt behaviour can be sanctioned with a fine or imprisonment for a period of up to eighteen months.[Page49:]

Conclusion

For centuries Denmark has been a strong supporter of free trade and the liberal economy. In this context, arbitration quickly became a natural and normal way of settling disputes, both nationally and internationally. Denmark's encouragement of arbitration is once again illustrated by the 2005 Arbitration Act, which is applicable to almost any kind of arbitration and provides for the recognition and enforcement of all kinds of arbitral awards irrespective of the country in which the arbitral tribunal had its seat.

1
Denmark made the following two reservations upon ratification: a) that it would apply the Convention only to the recognition and enforcement of awards made in the territory of another Contracting State; b) that it would apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under national law.

2
These General Conditions were drawn up and are from time to time revised by a working group composed of leading organizations within the construction and housing sector. The working group currently comes under the auspices of the Ministry of Housing. The General Conditions are applicable when specific reference is made thereto in the parties' agreement.

3
In the former, the chairman is a Supreme Court judge. In the latter, the arbitrator is most likely a judge but may be another person who meets the necessary requirements for being a judge; the judge may be from a lower court.

4
Available in Danish on the website <www.retsinfo.dk>.

5
European Treaty Series 173.