Can Norwegian-registered foreign enterprises (NUFs) be parties in legal proceedings in Norway?
Norwegian-Registered Foreign Enterprises (NUFs) are generally restricted from being parties in Norwegian legal cases, as they lack the necessary legal standing. However, certain exceptions allow branches in specific industries, like insurance and finance, to participate in court proceedings. Understanding these nuances can help businesses avoid missteps and protect their legal rights.
To initiate or be subject to a lawsuit in Norway, an entity must have legal capacity—the ability to be a party in a legal proceeding. Individuals, the state, municipalities, and companies typically possess this capacity. However, NUFs generally do not have the legal standing to be parties in Norwegian courts.
A NUF, or Norwegian-Registered Foreign Enterprise, is essentially the Norwegian branch of a foreign company. As such, it usually cannot sue or be sued in Norway. The foreign parent company typically holds this capacity. If a lawsuit is filed by or against a NUF, it is likely to be dismissed, potentially leading to the loss of legal rights. Surprisingly, this issue arises quite often in Norwegian courts.
There are a couple of important exceptions to this general rule:
- Branches of foreign insurance companies operating in Norway: NUFs engaged in insurance activities in Norway can sue and be sued. This was established in two Supreme Court decisions (Rt. 2005 p. 451 and Rt. 2008 p. 1730). The previous Insurance Activity Act § 14-2 required such companies to appoint a general agent residing in Norway to manage the branch. This general agent had the authority to receive legal proceedings on behalf of the company, allowing the branch to act as a party in Norwegian courts within the agent's scope of authority. It is assumed that this approach remains valid under the new Financial Institutions Act §§ 5-2 and 5-6.
- Branches of foreign banks or financing companies operating in Norway: NUFs engaged in banking or financing activities in Norway also have legal standing. This was confirmed for banks in Rt. 2009 p. 372 (Fokus Bank) and for financing companies in Rt. 2005 p. 1229 (Aktiv Kapital), and reiterated in a recent decision by the Borgarting Court of Appeal concerning De Lage Landen Finans Norge (LB-2014-31691). The rationale is that these branches are subject to extensive regulation under the Financial Institutions Act and associated regulations, satisfying the considerations underlying the general requirements for legal capacity. This applies even if no branch board is registered, and thus no legal representative is formally appointed for the Norwegian branch
Even when it's permissible to sue or be sued by a NUF, it may not always be the most effective course of action. This should be evaluated on a case-by-case basis.
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