In a precedent-setting decision, the Danish Supreme Court has denied enforcement of a foreign arbitral award, marking a significant moment in the application of due process standards within Denmark. The decision suggests the emergence of a Scandinavian standard of due process regarding proper notification of arbitral proceedings and offers valuable lessons for international parties navigating enforcement risks.
On 20 March 2025, the Danish Supreme Court delivered a decision in the case of A v B (BS-34884/2024-HJR), denying enforcement of an arbitral award issued by the Shanghai Arbitration Commission (SHAC). This judgment is noteworthy given Denmark’s strong pro-enforcement stance in line with the New York Convention (NYC). Successful objections to enforcement are rare, and this is the first decision of its kind under the relevant provision of the Danish Arbitration Act.
The Court found that the respondent, who did not participate in the arbitration, had not been properly notified of the arbitration proceedings, which constitutes a ground to refuse recognition and enforcement of the award under section 39(1)(1)(b) of the Danish Arbitration Act, which corresponds to Article V(1)(b) of the NYC and Article 36(1)(a)(2) of the UNCITRAL Model Law.
In making this decision, the Supreme Court overturned the Western High Court’s decision which found that the award was enforceable. In turn, the Western High Court had decided the matter on appeal from the bailiff’s court, which had initially denied enforcement. The Supreme Court has thus conclusively settled how section 39(1)(1)(b) of the Danish Arbitration Act should be interpreted in this context.
Despite SHAC’s adherence to its procedural rules regarding service, the Supreme Court emphasized that under Danish law, the crucial factor is whether the respondent received notice, not merely whether service complied with institutional rules. Service attempts were made to two outdated Chinese addresses, which were however the most recent addresses the respondent had registered in China.
The Supreme Court found that “The decisive factor is whether the party has received the notice, not in what form it was given” and thereby confirms that – at least for cases where a party does not participate in the proceedings – actual receipt of the notification of an arbitration is the relevant standard under Danish law. The Supreme Court also confirmed that there is room for Danish courts to independently assess whether the party had been properly notified rather than deferring to the arbitral tribunal’s assessment. In this context, the Supreme Court found that “it is irrelevant that the arbitral tribunal in Shanghai considered that notice of the arbitration had been served on [the respondent].”
In addition, the Supreme Court re-affirmed that section 39(1)(1)(b) of the Danish Arbitration Act cannot be derogated from by agreement, thus rejecting the award creditor’s argument that the parties had agreed to arbitration under the SHAC rules and that service had been effected in accordance with said rules.
The Supreme Court adopted a pragmatic approach, acknowledging the difficulty in proving the absence of notice while confirming that it was for the party resisting enforcement to prove that it had not been notified. The Supreme Court thus considered “reasonable doubt” whether the party was notified of the proceedings sufficient to prevent enforcement. Based on the evidence, the Court assessed that “it must be assumed that [the respondent] was not in China in 2020, but in Denmark” when the arbitration was conducted. In addition, it highlighted that no other communication, including via email, had been sent to the respondent about the arbitration from SHAC, the arbitral tribunal or the claimant. On this basis, the Supreme Court found that the respondent had sufficiently demonstrated a lack of notification of the proceedings.
Like Article V(1)(b) of the NYC, section 39(1)(1)(b) of the Danish Arbitration Act makes no reference to which law governs the determination of proper notice, and the Supreme Court was apparently ready to apply a “Scandinavian standard”: In its key finding, the Court expressly relied on an earlier judgment by the Swedish supreme court in a similar case, where recognition and enforcement of an arbitral award made in Russia against a Swedish respondent was refused on the basis of lack of proper notice under the Swedish corollary to Article V(1)(b) of the NYC.
Both cases involved non-participating respondents, outdated addresses and both courts scrutinized the respective arbitral tribunal’s determination of service. Both courts ultimately applied the same threshold that actual notice — not mere formal compliance — is required and thus affirmed that arbitration cannot proceed in secret, regardless of whether the respondent appears evasive.
Whereas the Swedish supreme court rather closely scrutinized the arbitral tribunal’s assessment of service, it appears that the Danish Supreme Court did not have much to go by as the underlying award contained no analysis of whether the respondent had been notified, nor a reference to the then-applicable arbitration rules of SHAC.
This suggests that the Swedish case may represent an emerging baseline standard in Scandinavia, with the Danish Supreme Court reinforcing that standard in a context where the arbitral tribunal has made even less effort to ensure effective notice.
This case serves as a wake-up call for companies and counsel relying on institutional rules and boilerplate service clauses. Especially when a counterparty does not participate at all or later “abandons” the proceedings, the remaining party is often left with significant cost implications and needs to critically assess the enforcement potential of even a successful award. Despite the strong pro-enforcement stance of the Danish courts, the Danish Supreme Court has now clarified that Danish courts will not rubber-stamp enforcement merely because procedural boxes have been ticked. Therefore, understanding the importance of actual awareness, beyond technical service compliance, is crucial for enforcement or resistance of arbitral awards in Denmark. The Supreme Court’s judgment thus leaves arbitrators, institutes and counsel alike with an increased incentive to ensure actual notice, even in circumstances where there might be little sympathy for the non-participating party.
Our international arbitration team has extensive experience with complex enforcement proceedings, both in Denmark and internationally. We advise clients on enforcing foreign arbitral awards, resisting enforcement on due process grounds, drafting robust arbitration clauses, and navigating compliance with the relevant Danish and international legal frameworks.
If you have questions about this judgment or how it might affect your arbitration or enforcement strategy, please reach out to our team.