Although the Danish Arbitration Act (DAA) includes no express provisions on iura novit arbiter, non-codified Danish arbitration law limits the power of arbitral tribunals under iura novit arbiter in a number of ways.

As regards decisions on the merits, the most significant limitations follow from the principle of party autonomy. Under this principle, the arbitral tribunal cannot use its power under iura novit arbiter in a way that would bring the decision outside the scope of the parties’ claims and allegations. In particular, the tribunal must base its decision on the statements of (material) facts pleaded by the parties. The parties are also required to clarify/qualify the legal relevance of these facts, and the tribunal must respect this qualification. Even though the required degree of clarification is vague, this requirement puts significant limitations on the powers of arbitral tribunals under iura novit arbiter. In relation to the merits, the parties may also exercise their party autonomy to limit the power of the tribunal, e.g. to limit its power to award ‘consequential damages’.

The arbitral tribunal shall respect a choice of law made by the parties. However, it is unclear whether a court may set aside and refuse enforcement of an arbitral award if it does not.

Within these limitations stemming from the fundamental principles of party-presentation and party autonomy, Danish arbitration law generally leaves the exercise of powers under iura novit arbiter to the discretion of the arbitral tribunal concerned. But irrespective of the extent a given tribunal chooses to use these powers, it must treat the parties with equality.

In this respect, the discretion granted to arbitrators under Danish arbitration law appears to be somewhat wider than that recommended by the International Law Association in its Recommendation 6/2008: ‘In general … arbitrators should not introduce legal issues – propositions of law that may bear on the outcome of the dispute – that the parties have not raised.’

Special rules apply when an arbitral tribunal in Denmark rules on its own jurisdiction. In such situations, the tribunal has an obligation to raise and consider the matters of arbitrability and public policy ex officio. In this regard, the tribunal can make its own legal inferences from the factual basis of the dispute and independently consider and apply the relevant law, including all relevant legal sources. On this basis, the tribunal can decide, independently from the parties’ pleadings, that it lacks jurisdiction to decide (a part of) the dispute.