NORWAY: An Introduction to Dispute Resolution

Introduction 

Norway is ranked second in the Overall Index Score of the World Justice Project’s Rule of Law Index 2022. Norwegian state courts are deemed highly efficient in a European context, with an average time of 5.6 months from the writ to the judgment in District Courts and the same average time from the appeal to the judgment in the Courts of Appeal.

Arbitration is the predominant dispute resolution method for resolving larger commercial disputes. The Norwegian Arbitration Act is based on the UNCITRAL Model Law. While the use of institutional arbitration appears to be increasing, the majority of arbitrations are still ad hoc. The Arbitration Institute of the Oslo Chamber of Commerce handles a low caseload, so a variety of arbitrations under other institutional rules are seen quite frequently.

The Norwegian State Court System  

The Norwegian state court system consists of 23 District Courts, six Courts of Appeal and the Supreme Court. The number of District Courts was significantly reduced (from 60 to 23) in May 2021 following the Norwegian government’s court reform, with the aim of achieving higher quality and efficiency in legal proceedings. Civil proceedings are governed by the 2005 Norwegian Dispute Act, which includes the Convention on jurisdiction and the enforcement of judgements in civil and commercial matters (the “Lugano Convention”).

The Norwegian court system has an efficient processing time, although this naturally depends on the length and complexity of the case. The hearings are conducted on the principles of orality and immediacy of proof, which means that Norwegian hearings are significantly longer than those in other countries. On the other hand, the judgment is normally rendered within two to three weeks after the hearing is concluded, and with the above-mentioned overall average time of 5.6 months from writ/appeal to judgment.

District Courts have a single judge, whereas Courts of Appeal are made up of three judges (unless the parties have also requested expert lay judges). Many cases are referred to the Courts of Appeal and only approximately 10% of ordinary civil appeal cases are dismissed from further proceedings.

The Norwegian Supreme Court only handles cases involving important matters that have implications going beyond the case itself. In the last three years only about 12% of civil appeal cases have been admitted to the Supreme Court.

Many cases are solved through mediation. In accordance with the Norwegian Dispute Act, both the District Courts and Courts of Appeal are obliged to suggest and highlight mediation as the preferable form of dispute resolution. In addition to traditional mediation, Norwegian courts offer court-initiated mediation. If accepted by the parties, the courts undertake the preparations for the mediation; that is, providing mediators and a venue. Court-initiated mediation was carried out in approximately 15% of cases before District Courts in 2022, and approximately 74% of those cases were registered as resolved.

Arbitration in Norway  

Arbitral proceedings are governed by the 2004 Norwegian Arbitration Act, which is based on the 1985 UNCITRAL Model Law. Norway is also a contracting state to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”).

The Norwegian arbitration tradition differs from that in many countries as ad hoc arbitration is the predominant form. There are no formal registers to monitor ad hoc arbitrations, and it can be difficult to analyse the trends and developments in Norwegian arbitration – especially from outside.

Traditionally, arbitration is commonly used in the energy sector, especially oil and gas. We are currently witnessing an increase in arbitration within renewable energy, which has become more and more relevant considering the shift towards green energy. There has also been a distinct increase in post-M&A disputes in recent years.

Construction is split between the offshore sector (oil and gas), in which cases are largely referred to arbitration proceedings, and onshore construction contracts, which are usually referred to state courts. The main reason for the split is the difference in the dispute resolution clauses in standard Norwegian contracts, where the standard forms for offshore contracts refer to arbitration, while the standard forms for onshore contracts refer to state courts.

Even though many arbitration cases are still carried out ad hoc in Norway, the trend seems to be towards more institutional arbitration. The arbitration institution in Norway is the Oslo Chamber of Commerce (OCC), but other institutions such as the International Chamber of Commerce (ICC) and the Stockholm Chamber of Commerce (SCC) are also frequently used. It should also be noted that arbitrations under the Rules of the Nordic Offshore and Maritime Arbitration Association (NOMA), which may be deemed semi-institutional, have increased every year since its launch in 2017.

Some Highlights From the Last Year 

There have been several landmark cases over the last year and two high-profile cases within the areas of competition law and public international law/investment arbitration are outlined below.

In February 2023 Oslo District Court handed down its judgement in the first-of-a-kind Norwegian follow-on claim case against four truck manufactures (DAF, Volvo/Renault, Daimler and MAN). Posten Norge’s claim for EUR47 million plus interest in damages was based on the European Commission’s findings that the truck manufactures had colluded in the setting of gross list prices over a 14-year period. The case is one of many ongoing follow-on claims in the trucks cartel case around Europe, which includes cases in Germany, France, the UK, Spain, Portugal and the Netherlands.

The District Court found that the cartel’s purpose had been to harm competition and achieve higher prices, and that it was likely that the cartel affected the prices customers paid. Although expressing substantial doubt, the District Court did not find sufficient evidence that Posten had been overcharged by the cartelist during the infringement period, and the claim against the truck manufacturers failed. The judgment has been appealed.

In March 2023 the Supreme Court of Norway rendered what is known as the Snow Crab judgment after 15 justices heard the case in a plenary session. The Supreme Court normally consists of five justices, and there are normally years between such plenary sessions. The case concerned the validity of a decision that refused a Latvian shipping company a licence to catch snow crabs on the Norwegian continental shelf outside Svalbard, a Norwegian archipelago in the Arctic Ocean.

The case questioned the geographical scope of the Svalbard Treaty. The main issue was the applicability of the provisions set out in Articles 2 and 3, which address the equality of nationals of the High Contracting Parties and their ships on the continental shelf outside Svalbard. The Supreme Court concluded that neither the relevant decision nor Norwegian snow crab regulations were incompatible with the provisions on equality set out in Articles 2 and 3 of the Svalbard Treaty.

However, the last word may not have been said yet as Norway is a party in several on-going investment arbitrations involving similar issues. The decision in the first of these cases is expected in 2023.