Due Process Prevails: Danish Supreme Court Blocks Chinese Arbitral Award

On 20 March 2025, the Danish Supreme Court ruled (in case BS-34884/2024-HJR) that a Chinese arbitral award could not be enforced in Denmark due to a lack of proper service.

Background

In 2020, a Chinese arbitral tribunal held that the investments that an investor had made for a company should be repaid. Since the defendant was domiciled in Denmark, the investor sought to enforce the Chinese arbitral award there. Both China and Denmark are contracting parties to the United Nation’s Convention on the Recognitoion and Enforcement of Foreign Arbitral Award of 1958 (the New York Convention), which generally requires contracting States to recognize foreign arbitral awards. However, during the enforcement proceedings, the Danish defendant argued that he had not been served and was unaware of the arbitral proceedings in China.

The Legal Issue

The issue for the Danish Supreme Court was whether the Chinese arbitral award could be enforced or if the exemption for lack of service in Article V(b) of the New York Convention could apply. Section 39 of the Danish Arbitration Act that implements said grounds for refusal which mirrors Article 36(1)(a)(ii) of UNCITRAL’s model law. Under this provision, lack of “proper notice” of the arbitral proceedings is a ground for refusal. That is such a fundamental principle that cannot be derogated from. Citing the Swedish Supreme Court’s judgment NJA 2010 p. 219, the Danish Supreme Court held that it is the actual service that what matters is not the form of service, but whether actual service has occurred.

The Supreme Court’s Findings

The Court concluded that the respondent had not been properly served. Attempts to serve the respondent about the arbitral procedure had been made to outdated postal addresses in China, despite the tribunal being aware that the respondent resided in Denmark. Furthermore, no attempt was made to inform the respondent via email or other reasonable means. Given this lack of proper notice, the Court held that enforcing the award would violate fundamental principles of due process. Accordingly, the Chinese arbitral award was declared unenforceable in Denmark.

Comment

This decision underscores the importance of ensuring that arbitral proceedings comply with basic procedural fairness, especially when enforcing awards across borders.