Spotlight Talk with Amund Bjøranger Tørum

How does Norwegian arbitration compare to its Nordic neighbours? 

By contrast to our Nordic neighbours, arbitration in Norway has traditionally been dominated by ad hoc arbitration, which has worked well also in massive disputes related to the significant oil & gas industry in Norway. An important reason is that the Norwegian arbitration market, in particular the high-end market, has been handled by a coherent group of elite arbitrators.  

Having said that, a number of large arbitrations related to Norway have been handled by SCC and ICC, for example, disputes concerning long-term gas sales. The footprint of institutional arbitration in Norway by Oslo Chamber of Commerce (OCC) and semi-institutional arbitration by the Nordic Offshore and Maritime Arbitration Association (NOMA) is, however, increasing.  

The last decade a number of international arbitrations have been seated in Norway, and we have developed a broad pool of counsel and arbitrators well versed with international best practice.  

Another key feature of arbitration in Norway is that the Norwegian Arbitration Act of 2004 provides that the parties shall try to agree on the composition of the tribunal, and in the vast majority of cases the parties are able to agree. The latter has the advantage that the parties have a strong influence on the selection of the chairperson, which may be imperative in large and complex cases. Furthermore, it goes without saying that it is beneficial that all the members of the tribunal are jointly appointed by the parties.  

When should institutional arbitration be preferred by Norwegian parties? 

There is no general answer to the question, but I would like to draw the attention to four examples. First, in minor cases where it is often sufficient with a sole arbitrator. Even if an (ad hoc) arbitration clause provides for a sole arbitrator, it may be difficult and time-consuming for the parties to agree on a sole arbitrator. In such cases, institutional arbitration provides a more swift and efficient fall back mechanism than relying on the local court to appoint the sole arbitrator, and most arbitral institutions also provide an attractive fast track.  

Second, if the other party is considered to have an aggressive approach to disputes and arbitration, it might be beneficial to have an arbitral institution to manage challenges etc.  

Third, if the other party is located in a jurisdiction where it might be challenging to enforce foreign arbitral awards, there might be easier to succeed with an award rendered by a recognized arbitral institution.  

Fourth, a Norwegian party should consider arbitration in another Nordic country as an alternative to England, typically where none of the parties are willing to accept arbitration in any of the parties’ “home” jurisdictions. For example, SCC arbitration and Swedish law may be a more favourable and cost efficient alternative than arbitration in London.  

What advice would you give to lawyers on questions to consider when drafting their dispute resolution clauses? 

The general problem is that the lawyers drafting dispute resolution clauses rarely are experts on dispute resolution, but again there is no general advice.  

As indicated, sole arbitration may be swift and cost efficient in minor disputes, and I would suggest that arbitration clauses stipulate sole arbitration if the dispute does not exceed a certain amount.  

I would also like to emphasize that clauses providing for ad hoc arbitration, to ensure predictability regarding the applicable procedural rules, should include a reference to, for example IBA Rules on the Taking of Evidence or other guidelines for best practice like the NOMA Guidelines.  

In the case of institutional arbitration, such as with the SCC, drafters should always take care to copy and paste the institution’s model dispute resolution clause from the website.