Originally from International Arbitration Court Decisions - 3rd Edition

DENMARK

DECISION BY THE DANISH WESTERN COURT OF APPEAL RENDERED ON 27 JANUARY 2004 IN CASE B-21717-00

Subject-Matters:
(1) Challenge of the amount of arbitrators’ fee fixed by the arbitrators in an international ad hoc arbitration.
(2) VAT on arbitrators’ fees.

Findings:
(1) Under the 1972 Danish Arbitration Act, in the absence of stipulations in the Terms of Reference, or any other agreement, how the fees were to be fixed; the Arbitral Tribunal was entitled to fix its fees in compliance with the standard prevailing in international commercial arbitration.
(2) Danish tax authorities exempt arbitrators’ fees from VAT since the arbitrators do not engage in economic activity.

Parties:
Claimant: KVM Industrimaskiner A/S (Denmark)
Respondents: 1. Construction Acton Vale Ltd (Canada)
2. Maître J. (Chairman of the arbitral tribunal)
3. Professor L (arbitrator)
4. Judge H (arbitrator)

Place of Court Proceedings:
Denmark

Applicable law:
Danish Arbitration Act of 1972
Excerpts below are an unofficial translation of the proceedings before the court.
The Proceedings Before the Court

“This case concerns the scrutiny of the fees as decided by the Arbitral Tribunal of the case: Ad Hoc Arbitration Construction Acton Vale Ltd., Canada (claimant) against KVM Industrimaskiner A/S, Denmark (respondent) through the arbitrators Mâitre J., Professor L. and Judge H. (hereinafter called the Arbitral Tribunal) at the time of the rendering of the arbitral award of 10 November 2000.