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Uphold in a decision from the Supreme Court

The Supreme Court clarifies the Arbitration Act’s deadline rules for demanding lawsuits before the ordinary courts rejected because the legal relationship falls under arbitration.

Advokatfirmaet Hjort has assisted IdHair Company A/S, a Danish company specializing in developing hair products for the professional beauty industry, in a conflict with their former distributor in Norway, ByWe AS, for several years.

The original agreement between the parties stipulated that disputes would be resolved through arbitration. However, our client asserted claims that did not stem from this agreement and argued that the case should therefore be handled by the ordinary courts, not through arbitration.

IdHair Company A/S initiated legal action in the ordinary courts by filing a conciliation complaint, despite the agreement. In the response to the conciliation board, the opposing party did not argue that the lawsuit should be dismissed due to the agreed arbitration. The conciliation board suspended the case. When the summons was then sent to the district court, the opposing party claimed in the response to the court that the case should be dismissed due to the agreed arbitration.

The Court of Appeal concluded that the opposing party had addressed the substance of the case before the conciliation board and that the ground for dismissal raised for the first time in the response to the court was submitted too late under Section 7 of the Arbitration Act. Consequently, the opportunity to demand dismissal based on agreed arbitration had lapsed. Following an appeal from the opposing party, the Supreme Court decided to review the matter.

Hjort lawyers Nils Christian Langtvedt and Ole Iversen Johnstad Kalvø represented IdHair Company A/S until the case was brought before the Supreme Court. In the Supreme Court, Hjort attorney Alex Borch prosecuted the case on behalf of the client, who sought to have the case heard in the ordinary courts in Norway. In a ruling delivered on November 1, 2023, the Supreme Court found that the opposing party had lost the opportunity to demand dismissal based on agreed arbitration because this was requested too late. Our client was awarded full legal costs for all instances. The dispute now continues in the district court, where IdHair Company A/S is represented by Hjort attorney Ole Iversen Johnstad Kalvø and associate lawyer Maria Brandtzæg. The main hearing is scheduled for January 2024.

Rett24 has previously covered the case here.

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