Finland has a separate arbitration act, which covers all aspects of both domestic and international arbitration. The statute is called: laki välimiesmenettelystä (967/1992, hereinafter “Arbitration Act”).

An unofficial English translation of the Arbitration Act translated by the Ministry of Justice can be found on the Finnish legal database Finlex. The current link to this translation is: http://www.finlex.fi/fi/laki/kaannokset/1992/en19920967.pdf

The recognition and enforcement of foreign arbitral awards is regulated in Sections 52 – 55 of the Arbitration Act under the chapter Arbitration in a Foreign State.

Finland is a party to the New York Convention since March 2, 1962 and it has not made any reservations.

Unlike other jurisdictions, Finland has transposed the provisions of the New York Convention into the Arbitration Act, and therefore the Arbitration Act does not refer to the Convention. Arguably, the provisions of the Arbitration Act are more arbitration and enforcement friendly than the provisions of the New York Convention. For example, the formal requirements of the arbitration agreement are less strict than those of the New York Convention, foreign arbitral awards are automatically recognized, and Article V 2. a) of the New York Convention regarding the possibility to refuse enforcement based on non-arbitrability has only been implemented as part of the public policy defense.

Unlike other jurisdictions, the Arbitration Act automatically recognizes a foreign arbitral award (Section 52 (1) of the Arbitration Act), without any party action being required. A party, which then however seeks to have the award non-recognized or enforced (which in Finland is distinct from the automatic recognition process), must file the corresponding application to the competent court.

The courts of first instance (käräjäoikeus) have jurisdiction (Section 54 (1) of the Arbitration Act). The competent district court is either the district court of the domicile of a party or, if neither party has its domicile in Finland, the district court of Helsinki.

A party seeking enforcement must file an application for enforcement to one the courts of first instance.

Proceedings are adversarial.

The Arbitration Act automatically recognizes a foreign arbitral award (see Q#3). An application for enforcement or non-recognition of an award must be accompanied by the original arbitration agreement and by the original award, or certified copies thereof.

A document drawn up in any other language than Finnish or Swedish must in principle be accompanied by a certified translation into either of these languages. However, the court may grant an exemption (Section 54 (2) of the Arbitration Act) and this regularly happens.

This exemption may be granted in relation to part or all the documents at the court’s discretion. Hence, a party seeking enforcement may file the application with just the copy of the arbitral award without translation and wait if the court requests a translation. In practice, awards in English language are widely accepted without translation.

Not necessarily. A party or any party representative (for example a foreign lawyer with a power of attorney) may apply for enforcement of an award. However, if the application is disputed, then only a Finnish qualified lawyer or the party itself may act before the competent court.

No.

The costs of proceedings are comprised of court fees and possible other legal fees, such as attorney fees and other party costs (e.g. translation). The court fee for enforcement application is based on the Court Fee Act (tuomioistuinmaksulaki, 1455/2015). The act sets a fixed fee for each type of court matter, and therefore the prices do not vary based on the amount in dispute or other determining criteria. Currently, the court fee applicable for enforcement applications is set to EUR 86.

Each party is liable for its own costs in application proceedings, such as in enforcement of an award proceedings. However, if the application is disputed, the court may order the losing party to compensate all or part of other party´s costs if so requested by the other party.

Several factors may play a role here. The first relevant question is how difficult it is to serve the other party with the enforcement application. Even though the Finnish bailiff system is considered quite effective, particularly with regard to parties not residing in Finland, the service of documents may take a long time. The second relevant question is whether the opposing party disputes the application. In this case, it may be necessary to have both parties present several statements and hold an oral hearing, which inevitably prolongs enforcement proceedings. The decision on enforcement may also be appealed before an appeal court as well as before the supreme court (korkein oikeus).

If service is not an issue and the application is not disputed, then proceedings are fairly swift. From the filing of the application to the rendering of the decision, as a rough estimate, the entire process takes somewhere between 1 – 6 months.

The grounds on the basis of which a foreign award may be refused enforcement are found in Section 53 of the Arbitration Act, which states that an arbitral award shall not be enforced in Finland against a party which furnishes proof that: 1) a party to the arbitration agreement did not have capacity or the arbitration agreement was invalid, 2) no proper notice was given on the appointment of the arbitrator or due process was otherwise violated, 3) the arbitrators exceeded their authority, 4) the composition of the tribunal or the procedure itself substantially deviated from the agreement of the parties, or in absence of such agreement, from the law of the state where the arbitration took place and 5) the award has not become binding on the parties yet or its enforcement has been suspended in the state in which, or under the law of which, the award was made or if the award was nullified in said state.

Unlike other jurisdictions, the Arbitration Act does not contain the provision found in Article V 2. a) of the New York Convention. This so called non-arbitrability defense is considered by Finnish courts only as part of the public policy defense, which significantly diminishes its practical relevance.

The public policy violation defense for foreign arbitral awards is set forth in Section 52 (2), according to which an award shall not be recognized to the extent that it is contrary to the public policy of Finland.

There is no jurisprudence of appeal courts (hovioikeus) or the supreme court (korkein oikeus) regarding the public policy defense, so the interpretation has only been discussed in legal literature. It has been stated that an example of the award being against public policy is when a party has been ordered to a certain performance to which it cannot be ordered under Finnish law.

The question of recognition and enforcement of partial and interim awards has not been finally determined. The Arbitration Act, relevant legal literature and case law do not have a definitive answer. However, the dominant view is that partial awards may be enforced and interim awards may not be enforced.

According to Section 44 of the Arbitration Act, the enforcement of domestic arbitral awards may be denied if a court finds the award to be null and void (Section 40 of the Arbitration Act) or a court has set aside the award (Section 41 of the Arbitration Act).

According to Section 40, an award shall be null and void if: 1) the arbitrators have decided on an issue not capable of settlement by arbitration under Finnish law, 2) the recognition of the award would contravene Finnish public policy, 3) the award is so obscure or incomplete that it does not indicate how the dispute was decided and 4) the award was not made in writing or it was not signed by the arbitrators.

Additionally, according to Section 41 an award may be set aside if: 1) the arbitrators exceeded their authority, 2) an arbitrator was not properly appointed, 3) an arbitrator could have been challenged, but the proper challenge was not accepted and 4) a party wasn’t given sufficient opportunity to present its case.

The public policy defense for domestic awards is laid down in Section 40(1)(2), according to which an award shall be null and void to the extent that the recognition of the award is to be deemed contrary to the public policy of Finland. Although the public policy defense for foreign and domestic awards is formulated a bit differently and in separate sections of the Arbitration Act, their interpretation regarding the scope of the public policy defense is the same. See Q#13 for answer.

Finnish courts do not differentiate between foreign and domestic awards with regards to this question. The prevailing view is that partial awards may be enforced and interim awards may not.

The Arbitration Act automatically recognizes a foreign arbitral award (see Q#3).

The Arbitration Act automatically recognizes a foreign arbitral award (see Q#3). You may file an application for non-recognition of the arbitral award in a district court. The grounds for non-recognition are the same as grounds for non-enforcement of an arbitral award (see Q#12 for foreign awards and Q#15 for domestic awards).

You may appeal a decision refusing to recognize an award first before the appeal court (hovioikeus) and then before the supreme court (korkein oikeus).

No.

Contrary to Article V 2. b) of the New York Convention, the Arbitration Act does not grant any discretion to the court to decide whether recognition and enforcement of an award should be refused or not if the award has been set aside in the country where the award was made. According to Section 53 (5) of the Arbitration Act, the award shall not be enforced in Finland against a party who furnishes proof that an arbitral award has been annulled in the country where the award was made.

However, unlike other provisions where the Finnish legislator has intentionally decided to deviate from the New York convention, there is no explicit statement in the legal commentaries about the deviation from the New York Convention. Therefore, one may argue that the interpretation should not be stricter to enforcement than that of the New York convention. As the relevant legal literature and case law do not discuss this question, there is no definitive answer yet.

First, before an enforcement decision is made, a court may adjourn the decision if the party against which enforcement is sought invokes that it has made an application for declaring the award null and void or for setting it aside in the country where the award was made.

Secondly, a party may seek to appeal the decision to enforce the award and rely on the appeal court (hovioikeus) or the supreme court (korkein oikeus), before which it can invoke the argument of the award being set aside in the country where the award was made.

Thirdly, if the appeal period has lapsed and the decision to enforce the award has become legally binding, there still may be a possibility for an extraordinary channel of appeal called “reversal of final judgment”. According to the Finnish Code of Judicial Procedure a final decision may be reversed if a reference is made to circumstances that had not been presented earlier, if the presentation of these circumstances would likely have led to a different result, and if the party has not been able to refer to this circumstance before the court that rendered the decision. It should be noted that the threshold for applying extraordinary channels of appeal is high, and there is no jurisprudence on the application of this provision to a decision regarding enforcement of an arbitral award.

Yes. The court may:

(1) order the confiscation of movable or real property of the opposing party to an amount securing the debt;

(2) prohibit the deed or action of the opposing party, under threat of a fine;

(3) order the opposing party to do something, under threat of a fine;

(3) empower the applicant to do something or to have something done;

(4) order that property of the opposing party be placed under the administration and care of a trustee; or

(5) order other measures necessary for securing the right of the applicant to

be undertaken.

After a court has declared an award enforceable, the enforcement request is filed in writing or electronically with the enforcement authority (ulosottovirasto) of the district where the debtor is located. This is done by filling a simple standard form with the decision of the court as an attachment.

There are several types of enforcement fees, e.g. scheduled fee, processing fee, disbursement fee, auction fee, execution fee and fee for delayed assertion. A scheduled fee is levied from each payment or debt service collected from the debtor. The amount of the fee depends on the amount of the payment or debt service, and is limited to EUR 210,00 for collected receivables over EUR 8.400,00.

If the debt cannot be collected from the debtor because of a lack of means or some other reason, a processing fee is collected from the creditor when the documents are returned to him or her. In a regular enforcement matter, the fee is EUR 10 and in a limited enforcement matter (limited to easily obtainable assets such as salary and bank account) EUR 5. If the creditor has requested that the debt be entered into the passive register, a supplementary processing fee of EUR 10 must be paid.

The creditor will be liable to pay a disbursement fee for each amount that the enforcement authority disburses to him or her. The fee amounts to 1.45 percent of the disbursed amount, but in any event not more than EUR 500,00.

In addition to the scheduled fee, an auction fee is levied for the compulsory auction of distrained movable (EUR 450,00) and real property (EUR 1.100,00). There is an execution fee for the carrying out of evictions and precautionary measures etc. (EUR 110,00 or EUR 225,00).

No.

No. However the common perception among the practitioners is that enforcement proceedings are very successful meaning that enforcement applications are accepted almost without exceptions.

The Finnish Enforcement Office is considered effective. They have vast competence to confiscate debtor’s property and gain information about debtor’s incomes and property from other government officials, employer of the debtor and banks. According to statistics, on a yearly basis the enforcement office is able to claim around 50 % of the total value of all monetary claims in enforcement. The success rate of enforcement is mostly dependent on the financial standing of the debtor in question.

The practical significance of the automatic recognition of a foreign arbitral award should be considered. As already mentioned in the answer to question 3, all foreign arbitration awards are automatically recognized in Finland in accordance with Section 52 (1) of the Arbitration Act.

The practical significance of this feature is two-folded: First, a party that seeks to have the award non-recognized, must file the corresponding application to the district court. The grounds for non-recognition are the same as for non-enforcement (see Q#12 and Q#13). Second, due to the automatic recognition, an award has immediate res judicata effect or evidence function, meaning that a party may rely on the foreign arbitral award in other legal proceedings in Finland without any separate recognition proceeding being required.