CreditHub: Norway

• One owner
• Personal income tax on profits
• Unlimited liability

• Two or more owners
• Shared responsibilities and liabilities
• Unlimited liability

• Mix of limited and general partners
• No minimum capital requirement

• Limited liability
• Minimum capital: NOK 30,000
• Privately held shares

• Public ownership
• Minimum capital: NOK 1 million
• Limited liability

Contracts can be concluded orally or in writing. Most parties opt for written agreements because this is more certain.

Recommended documentation for court proceedings:

• Copy contract
• Copy invoices and credit notes
• Copy orders and order confirmation
• Clear statement of account
• Proof of delivery

• Security against buyer's default or insolvency
• Specific conditions for validity

When included in trade contracts, retention of title allows the seller to retain ownership over the goods supplied until certain contractually defined conditions are met, therefore providing the seller with a form of security against the buyer's default or insolvency.

If retention of title is not available, the trade creditor must bring a legal action for a judgment and attachment (that is, an execution lien over some or all the debtor's assets), or file for the debtor's insolvency.

In Norway, retention of title must be agreed in the contract under the following conditions:

• The clause must be concluded while the parties enter into the sales agreement
• The clause must be made in writing and clearly specified
• Stipulate that the buyer may not consume, resell or mix with or attach the object to other assets

A warning notice to the debtor is mandatory before filing any enforcement claims. The warning notice should include:

• Creditor name and overview of the claim
• The total amount of the claim, including penalties (interest)
• Payment method required
• A warning that the claim will be enforced through the enforcement authority if not settled by the required date
• Information on how to dispute the claim

If this measure has been taken and the payment still has not been made after the two-week notice period (according to the law), the creditor may file for enforcement.

• Statutory default interest
• Collection costs applicable

If the contracting parties have not agreed this in the contract, then statutory default interest and collection costs are applicable.

The creditor may in addition to the claim demand to recover from the debtor:

• Penalty interest of the claim: 8% (the present rate from 1st of January 2020). The reference rate changes every 6 months.
• Fees for enforcement, application filing and legal cost assistance.

The standard limitation period is ten years from the accrual of the right in question and may only be halted by one of the following:

• Claim acknowledgement from the debtor
• A written demand is sent to the debtor
• Legal proceedings are issued by the creditor

• Not obligatory
• Mediation and arbitration common

ADR is not an obligatory process in which debtors and creditors must go through even though courts may suggest exploring this option with the most common forms of ADR being mediation and arbitration.

Mediation is used for all kinds of disputes, whereas Arbitration is a method to settle large commercial disputes in private.

Other less commonly used ADR methods include expert determination and dispute review board (mostly for large construction cases).

Should the debtor not be represented by counsel, a case must (with some exceptions) start at the conciliation board, regardless of value. This is largely a formality, and few serious disputes are resolved at this stage, with those valued over NOK 125,000 subject to an agreement between both parties before the District Court.

Any complaints sent to the conciliation board interrupt any time bar period which runs for one year from when the case was referred.

• Understand the appropriate starting point for your case (Conciliation Board or District Court).
• Be prepared for the process and timelines in District Court proceedings.
• Adhere to evidence submission deadlines to avoid rejection.

If the conciliation board process does not apply, then District Court with jurisdiction begins a case through a writ of summons (stevning). Such a summons should include:

• The claim facts
• The legal basis
• A plea for relief
• Any written evidence relative to the claim which requires the involvement of specific parties

The court serves the document on the defendant, granting a three week window for the debtor to reply.

Once the brief is received, the court calls for a planning conference by telephone with counsel, at which the following is typically discussed:

• Main hearing date
• Procedural issues
• Requirement for any subject experts or additional judges
• Requirements for additional evidence
• Whether or not mediation should be attempted

All parties are entitled to amend or submit additional evidence up to two weeks prior to the main hearing. Anything submitted after this date may be rejected by the court.

• Fixed fees for summary proceedings
• Variable costs for other cases

Although summary proceedings have fixed fees of around NOK 1,500, overall costing is subject to the various fees, interest rates and debt values.

All reasonable trial and preparation costs for the case, including lawyers' fees are recoverable with the actual amount decided by the case judge.

Contractual costs may also be claimed in the absence of a demand letter.

• Lugano Convention for EU/EEA
• New York Convention for arbitral awards
• Norwegian Enforcement Authority handles applications

In respect of enforcement procedures, Norway is a member state of the Lugano Convention (2007), which ensures the enforcement of judgments in the EU/EEA area. Furthermore, Norway is also a member state of the New York Convention (1958), ensuring the enforcement of foreign arbitral awards worldwide.

Enforcement applications are handled, decided, and enforced by the Norwegian Enforcement Authority and executed entirely in writing. The most common forms include the seizure of assets (moveable or immovable property, or bank accounts) or attachments of earnings.

• Proactive approach can help avoid formal proceedings.
• Courts have power to impose binding arrangements.

1. The Debt Negotiation and Bankruptcy Act (1984) (the DNB-Act)
2. The Act (1984) (the Act)

• Multiple options available depending on circumstances.
• Courts play a significant role in determining proceedings.
• Business viability can influence the chosen process.