Schjødt in the Courts in 2023

Here are some key numbers as per year-end 2023:

• Schjødt's litigation department consists of over 50 litigation specialists across all of Schjødt's offices: Oslo, Bergen, Stavanger, Ålesund, Stockholm, Copenhagen and London.
• Our litigators assisted clients from various countries in at least 200 court and arbitration cases, before domestic (Norwegian, Swedish, Danish, and English) and international venues.
• In Norway alone, throughout 2023, Schjødt acted as lead counsel for clients in eight disputes with a case value exceeding 1 billion NOK.
• 16 of our lawyers are certified to argue cases before the Norwegian Supreme court, and several lawyers have served as judges in their careers, with a number of others regularly being appointed as arbitrators.

Schjødt's litigation lawyers assist not only in commercial cases, but also in cases protecting people's right to freedom of speech, freedom of press and human rights more generally.

Schjødt has a long tradition of fearless advocacy, including providing assistance to people with little resources as part of our pro bono practice. This work is important both to these individual clients and in its contribution to the development of important legal issues. Since the year 2000, Schjødt has argued 71 cases concerning human rights before the Norwegian Supreme Court.

The legality of the Tax Authorities' decision to reject tax deduction (for a cross-border group contribution)

Schjødt represented ExxonMobil in the EFTA Court (Case E-7/23 – Oral hearing 18.01.2023). Members of the team were Morten Henriksen and Hugo P. Matre.

By letter of 20 June 2023, the Borgarting Court of Appeal requested an Advisory Opinion in the case pending before it between ExxonMobil Holding Norway AS (“EMHN”) and the Norwegian Government, represented by the Tax Administration (Staten v/Skatteetaten). At issue in the domestic case, was whether EMHN could claim a deduction for a cross-border group contribution of NOK 900 000 000 made to the subsidiary ExxonMobil Danmark ApS (“EMD”) in the fiscal year 2012.

The central question in the case is whether EMD has sustained a "final loss" in accordance with the "Marks & Spencer"-exception, as referred to in the EFTA Court's decision in Case E-15/16 Yara and the case law cited therein, thus resulting in the Norwegian Tax Authority's decision to reject deduction incompatible with the freedom of establishment, see Article 31 in conjunction with Article 34.

The questions submitted by the referring court relates to (i) whether the application of the “final losses”-exception is precluded where a subsidiary is in receipt of even minimal income in the fiscal year after the year for which a deduction is claimed, or whether a specific assessment must be conducted to determine whether the subsidiary’s continued income actually will reduce its losses, or that part of the losses for which a deduction is claimed, and (ii) whether it is a prerequisite for the establishment of a "final loss" that the liquidation process is formally decided immediately after the fiscal year for which deduction is claimed.

EU rules on public procurement

In the request for an Advisory Opinion, Oslo District Court has asked the EFTA Court for guidance regarding the applicability of the EU rules on public procurement when awarding an exclusive right to provide horse betting services to a national operator (Case E-8/23 before the EFTA Court). The context of the case is that the Norwegian government has awarded the private foundation Norsk Rikstoto an exclusive right without exposing it to competition, which raises several legal questions relating to the EEA Agreement.

On behalf of Trannel International Limited, senior lawyer Johanne Førde from Schjødt held a presentation explaining why the exclusive right in question shared so many characteristics with a legally binding contract that it in reality had to be considered a services concession regulated by Directive 2014/23/EU (the Concessions Directive). This was followed by oral pleadings from the Kingdom of Norway, the Kingdom of Belgium, the European Commission, and the EFTA Surveillance Authority, who mostly opposed the views submitted by Trannel.

The interpretation of Norwegian Standard Contract NS 8407 clause 35.2

Partner Erlend Holstrøm (H) and partner Andreas Johansen represented a contractor in a construction dispute, where the Supreme Court on 25 April 2023 finally decided on a much-debated question of civil procedure and clarified the interpretation of the commonly used Norwegian Standard contract NS 8407 clause 35.2 (HR-2023-766-A). The Supreme Court found that the effect of overpassing the eighth-months deadline for taking legal action in NS 8407 clause 35.2, is time barring of claims (Nw. foreldelse).

The Supreme Court clarified that to preserve the deadline cancellation under NS 8407 clause 35.2 on the basis of a complaint to the conciliatory board, the creditor must file a writ to the competent court within one year from a decision of the conciliatory board to close its matter. The one-year deadline in section 18-3 second paragraph of the Disputes Act applied, not the three month's deadline in section 18-3 third paragraph.

Criminal intent (Nw: forsett) – shotgun murder

Partner Thomas Horn (H) Ph.D. won a core case in the Supreme Court concerning criminal intent ("hensikt") (HR-2023-564-U). The case was subject to much attention in the media and had been widely debated among academics.

It is now a key textbook case as the Supreme Court established that criminal intent must be directly related to the relevant conduct ("handling"), in this case the loading of a shot gun.

The shot gun went off while being loaded, due to a serious malfunction. Still, the Court of Appeal convicted the defendant of intentional murder as the defendant was deemed to have a general intent (a plan) to kill the woman when he fetched the shot gun, and he would (supposedly) have pulled the trigger a few seconds later anyhow. However, the Supreme Court held that this did not constitute intentional murder. The defendant had not pulled the trigger and could not be convicted on the basis that he would have pulled the trigger later on. Further, he had not intended that the bare loading of the gun would cause the woman to be killed.

Other court cases of interest

• Partner Arild Dyngeland (H) argued a case before the Norwegian Supreme Court concerning the application of The Damages Act (Nw: skadeserstatningsloven) § 1-1 on the determination of liability for children and adolescents under the age of 18 (HR-2023-1172-A). The case concerned liability for non-economic damage.
• Partner Halvard Helle (H) argued two penal cases before the Norwegian Supreme Court concerning respectively sentencing in relation to gross illegal possession of firearms (HR-2023-1158-A), and abuse of position (HR-2023-473-A).

Post-M&A energy arbitration – alleged breach of information warranties & earn-out claim

Partner Hallvard Gilje Aarseth (H), managing associate Michael F. Decker and senior lawyer Christopher Huitfeldt, successfully defended an energy-industry client in international arbitration proceedings which reached a final decision in mid-2023. Through a share purchase agreement, our client had sold a company that was engaged in project-based work as a major service provider in the energy industry.

After the transaction was concluded, a very large project being handled by the company ended up significantly less profitable than originally expected. The buyer then sued our client for several hundred million NOK for breach of information warranties given in connection with the transaction process. After a hearing in June 2023, the arbitral tribunal ruled completely in our client's favour, dismissing the claim and also awarding our client its case costs.

The parties had also agreed to share the income from this same project through an earn-out clause in the share purchase agreement. The buyer took the position that no money was owed under the earn-out clause. Outside of the arbitration proceedings, we succeeded in assisting our client to obtain a further recovery from the buyer in connection with this earn-out agreement.

ICC arbitration – life sciences

Schjødt obtained a landmark arbitration award in favour of one of our Life Sciences clients in mid-2023. The award dealt with a complex technical Life Sciences product development project.

The tribunal in this ICC-administered case unanimously set aside an agreed global liability cap, based on the standard of unreasonableness under the Norwegian Contracts Act Section 36 and the duty of loyalty. Accordingly, our client was awarded a substantial nine-digit NOK amount in compensation plus legal costs in this unprecedented award.

Schjødt's team consisted of our Head of Life Sciences Knut Sverre Skurdal Andresen, together with senior lawyer Christopher Huitfeldt and senior associate Sjur Løbø Solhaug.

Post-M&A energy arbitration

Partner Per M. Ristvedt (H), managing associate Michael F. Decker, and associate Sandra Ulleland are currently representing an energy-industry client in ongoing international arbitration proceedings. Earlier, our client had entered a share purchase agreement to sell a particular project that was under development, with the final purchase price being determined in part based on certain subsequent events and circumstances.

When it came time to calculate the final purchase price, our client and the counterparty were in a disagreement over what the final purchase price should be, with positions leading to an overall dispute of several hundred million NOK. The arbitral tribunal's decision after the hearing is expected soon.

Post-M&A construction arbitration

Managing associate Michael F. Decker successfully represented a private equity client investing in the construction industry in arbitration proceedings in connection with a warranty claim under a share purchase agreement. Schjødt's client had acquired a company with, among other things, a warranty protecting our client from undisclosed disputes against the target company.

Our client subsequently discovered that there had in fact been an ongoing dispute against the target which the buyer had failed to adequately inform about, and which led to our client having to make a substantial payout. The warranty & indemnity insurer for the transaction repeatedly denied our client reimbursement of this payout in response to an insurance claim. Schjødt therefore initiated arbitration proceedings on behalf of our client and ultimately helped them to obtain essentially the full claimed amount in a settlement agreement. The case was concluded in early 2023.