Norwegian Ruling Limits The Scope Of Arbitration Clauses In Relation To Third Parties

In its ruling of 15 April 2026, the Appeals Committee of the Norwegian Supreme Court (Høyesteretts ankeutvalg) held that an arbitration clause laid down in a contract could not be invoked against a third party. This applies even where the third party has close commercial or group ties to the contract.

The ruling thus underscores that arbitration cannot be invoked without a contractual basis. The decisive factor is thus not only whether the dispute is closely connected to a contract including an arbitration clause, but whether the party sought to be bound by the clause has agreed to arbitration or is otherwise bound by the arbitration agreement.

The matter of the guarantee

The case concerned a shipbuilding contract between Westcon Yards AS and Rimfrost Antarctic AS containing an arbitration clause. Westcon Yards AS’s rights and obligations under the contract were subsequently assigned to Westcon 39 AS, and Rimfrost Holding AS, the parent company of Rimfrost Antarctic AS, assumed primary liability as guarantor for its subsidiary’s obligations.

Westcon 39 AS subsequently terminated the shipbuilding contract with Rimfrost Antarctic AS. Arbitration proceedings were then commenced to determine whether the contract had been unlawfully terminated.

In parallel, Westcon 39 AS commenced legal proceedings before the ordinary courts against Rimfrost Holding AS, claiming payment of NOK 117m under the guarantee. Rimfrost Holding AS claimed dismissal of the proceedings, relying on the arbitration clause contained in the shipbuilding contract. Both the District Court and the Court of Appeal in Norway ruled in favour of Rimfrost Holding AS.

The Appeals Committee of the Norwegian Supreme Court reached the opposite conclusion

The Appeals Committee of the Supreme Court set aside the ruling of the Court of Appeal. The Appeals Committee emphasised that no written arbitration agreement had been concluded between Westcon 39 AS and Rimfrost Holding AS.

The fact that Rimfrost Holding AS was mentioned in an addendum to the shipbuilding contract and had provided a guarantee in favour of Westcon 39 AS did not suffice. Accordingly, the parent company did not thereby become a party to the contract including the arbitration clause.

Nor did it suffice that the guarantee was closely connected with the shipbuilding contract, that Rimfrost Holding AS was the parent company of Rimfrost Antarctic AS, that the persons involved were aware of the overall contractual structure, or that considerations of coherent and efficient dispute resolution favoured arbitration.

A Danish perspective

The ruling is consistent with the Danish general principle that arbitration is based on agreement. Under the Danish Arbitration Act (voldgiftsloven), the parties may agree that disputes already in existence and future disputes arising out of a particular legal relationship are to be resolved by arbitration. An arbitration agreement may either be a clause in a contract or a separate agreement.

The Norwegian ruling thus serves to illustrate the extent to which the scope of an arbitration clause is defined by contract. A close commercial or group affiliation with a contract is not, in itself, sufficient to establish an arbitration agreement.

In a case before the Danish Supreme Court decided on 17 April 2026 (BS-49652/2025-HJR), the Supreme Court was also required to rule on the scope of arbitration clauses in contractual relationships – specifically, whether a bankruptcy estate was bound by arbitration clauses entered into between the company and its two former board members. The Supreme Court held that the bankruptcy estate had assumed the company’s rights and obligations and was thus also bound by the arbitration agreements entered into.

The material difference between the cases was the basis on which the parties were bound by the arbitration clause. In the Danish case, the bankruptcy estate assumed the company’s claims and legal rights, including the associated arbitration clause. In the Norwegian case, however, the issue was whether the arbitration clause could be made binding on an independent third party who was not a party to the contract containing the clause.