Arbitration in Finland: An Overview
Introduction
Arbitration offers an efficient alternative to traditional court proceedings in Finland and is gaining in popularity. This article provides an overview of arbitration in Finland, highlighting its legal framework, key features, enforcement, appeal processes, and other advantages of choosing arbitration as a dispute resolution method.
Legal Framework
The primary statute governing arbitration in Finland is the Arbitration Act (967/1992), which largely corresponds to the UNCITRAL Model Law. Although the Model Law was partially revised in 2006, these amendments have not yet been incorporated into Finnish legislation. Finland is a Civil Law jurisdiction, and the Arbitration Act applies to both domestic and international arbitration, with some key distinctions between the two.
In cases where parties have not expressly agreed to apply the rules of the Finland Arbitration Institute (FAI) or another arbitral institution, the Arbitration Act provides the procedural framework for arbitration. However, when parties opt for arbitration under the FAI Rules, those rules take precedence, and the Arbitration Act or other procedural laws do not apply.
The Finland Arbitration Institute (FAI) is the leading arbitral institution in Finland, providing a structured and internationally recognized framework for resolving disputes. When parties agree to FAI arbitration, they submit to the FAI’s rules, which govern all aspects of the proceedings.
Key Features of FAI Rules Arbitration in Finland
The FAI is frequently chosen for its expertise and comprehensive system of rules. These rules govern various aspects of the arbitration process, including the appointment of arbitrators, the conduct of proceedings, and the issuance of awards.
The FAI has established procedures to ensure impartiality and expertise amongst its body of arbitrators. Parties can agree on the number of arbitrators (typically one or three) and nominate their preferred candidates. If the parties cannot agree, the FAI, which maintains a list of qualified arbitrators with diverse backgrounds and expertise, will make the appointment. The FAI also considers factors such as the arbitrator’s availability, independence, and impartiality when making appointments.
Finnish arbitration allows for the use of interim measures to secure claims. A party may seek interim relief through the arbitral tribunal or apply to a general court, such as a district court, for enforceable interim measures. Court-ordered interim measures are binding and can be enforced through compulsory execution.
Parties may seek an order for the production of relevant documents. Confidentiality is a key feature of Finnish legal disclosure, with courts able to designate certain materials as confidential at the request of a party.
Documentary evidence generally carries greater weight than witness testimony, although this is assessed on a case-by-case basis. Expert witnesses can have a significant impact in supporting claims. Their credibility is judged by reference to education, experience, and work history.
Awards rendered under FAI rules are final and binding, with very limited grounds for challenge.
Enforcement and Appeals
Finland is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), making it relatively straightforward to enforce foreign arbitral awards in the country. The procedure for enforcing an arbitration award is generally efficient, although the expeditiousness of the proceedings will depend on the Finnish court's availability and whether the opposing party contests the action.
An arbitration award in Finland cannot be appealed, except with respect to matters concerning fees. However, parties may request a general court to declare an arbitration award invalid or null and void on specific grounds, such as serious procedural errors or if the award concerns a matter that cannot be resolved by arbitration under Finnish law. Challenging an arbitral award in Finnish courts is quite difficult, and often, opposing parties contest applications merely to delay the process.
Conclusion
Arbitration in Finland offers a robust and efficient alternative to traditional court proceedings, governed by a comprehensive legal framework that aligns closely with international standards. The flexibility and confidentiality of the process, combined with the expertise of institutions like the FAI, make it an attractive option for resolving disputes. Additionally, the availability of interim measures provides parties with the necessary tools to safeguard their interests during the proceedings.
