Finnish Minister of Justice, Antti Häkkänen, announced on Friday that the revision process of the Finnish Arbitration Act will be launched during this government term. The reform will have a significant positive impact for Finland. As a result of the reform, Finland will have an Arbitration Act that meets international standards, and Finnish dispute settlement will be able to better serve the dispute resolution needs of international business and attract international users and disputes to Finland and Finnish arbitration. The economic effects of arbitration spread widely across society.
The Finland Chamber of Commerce submitted a proposal to the Finnish Ministry of Justice calling for a reform of the 1992 Finnish Arbitration Act. In its proposal, the Finland Chamber of Commerce requested that obsolete provisions and deficiencies found in the Act be corrected, and stated that the goal of the reform is to have an arbitration act that is internationally competitive and meets international best practices.
Commercial and especially business contractual relations have become significantly more diversified and international over the lifetime of the current Act, which has not been able to respond to these changes. More than 200 business representatives drew their attention to this issue in a signed petition for the reform of the Act handed over by the Finland Chamber of Commerce to Ministry of Justice Antti Häkkänen in Spring 2018.
The Ministry of Justice held a hearing on the need for reform of the Act in September, after which it called a public hearing on the matter. During the public hearing, nearly 40 statements were submitted to the Ministry of Justice. Now, the Ministry of Justice has assessed the statements received during the consultation period and found that there is a need for a reform of the Arbitration Act.
Minister Häkkänen said at the Annual Conference of the Finnish Bar Association on 25 January 2019: “The functioning of the justice system is one of the most important pillars of Finland’s economic success. Trust in dispute resolution and in the enforcement of rights is becoming an increasingly important factor for business and investment. Arbitration provides businesses with a competitive way to resolve disputes. We have noticed room for improvement in the current Act; hence, we will launch a reform of the arbitration legislation”.
“We would like to thank Minister of Justice Antti Häkkänen for his thorough assessment of the need for a reform of the Act. Having an internationally competitive arbitration act in Finland will benefit the broader society by bringing tax revenues and jobs to Finland,” asserts Juho Romakkaniemi, CEO of the Finland Chamber of Commerce.
“We will fully support the reform of the Act and contribute significantly to it”.
Heidi Merikalla-Teir, Director of Dispute Resolution Services at the Finland Chamber of Commerce, also congratulates the Ministry of Justice’s decision to give the go-ahead for the reform of the Arbitration Act.
“With the reform of the Arbitration Act, Finland will meet all the conditions to build systematically towards international recognition in the field of international dispute resolution and increasingly emerge as an important seat for dispute resolution. Finland’s geographical location, low corruption, and reputation as an impartial country, together with a well-functioning regulatory and operational environment, are factors that set a good basis to build upon”.
Arbitration is a fast and confidential alternative to litigation in state courts. Arbitration is a well-established means to resolve both domestic and international commercial disputes.
Arbitration is also an important national export product. States adopt legislative measures in a competition to attract business disputes to their territories to be resolved by arbitration. Arbitration is a service that creates tax revenue for states. The economic effects of arbitration widely spread to society, benefiting especially companies participating in arbitrations, lawyers, experts, arbitration institutes, hotels and catering, tourism, and many other actors indirectly.
Link to the press release by the Finnish Ministry of Justice published on 25 January 2019 (in Finnish) here.
Link to the Finland Chamber of Commerce’s proposal to the Finnish Ministry of Justice (in Finnish) here.
Link to the detailed report from the Seminar and Discussion on the “Need for Revisions of the Finnish Arbitration Act” held by the Arbitration Institute of the Finland Chamber of Commerce (FAI) in January 2018 here.