Q&A: Commercial dispute resolution in the Netherlands

Commercial dispute resolution

We inform you about the top 10 most asked questions concerning commercial dispute resolution in the Netherlands.

1. What are the different types of (court) procedure in case of a commercial dispute in the Netherlands?

An amicable solution is often preferable. However, an amicable solution is not always possible and legal proceedings may then be unavoidable. In case of a commercial dispute, the claimant has different options when it comes to proceedings.

In commercial disputes, parties often choose for proceedings on the merits, a procedure before the Netherlands Commercial Court (“NCC”) or arbitration. Three different procedures with their own characteristics.

2. What is the working language of the different (court) procedures?

Proceedings on the merits

The working language in proceedings on the merits is Dutch. However, it is allowed to submit supporting documents to a pleading or procedural document in English, German or French. Submission of a translation of that specific document is then, in principle, not necessary. However, the court may require a translation if it considers it necessary or desirable for the treatment of the case.

NCC

The working language in proceedings before the NCC is English. However, the procedure may be continued (in whole or in part) in Dutch if the parties to the proceedings unanimously request this after submission of the originating document.

Arbitration

The working language in arbitration proceedings is determined by agreement of the parties.

3. When is the relevant body competent to take cognisance of the dispute?

Proceedings on the merits

In principle, the court closest to the defendant’s place of residence is competent to take cognisance of the dispute, unless parties have (contractually) agreed upon a different jurisdiction.

NCC

A matter may be submitted to the NCC, if the following requirements are met:

1.  the Amsterdam District Court or Amsterdam Court of Appeal has jurisdiction;
2. the parties have expressly agreed in writing that proceedings will be in English before the NCC;
3. the action is an international civil or commercial dispute within the parties’ autonomy; and
4. the dispute concerns an international dispute. The NCC does explicitly not handle cases that cases that do not have an international dimension.

The NCC recommends including the following clause in contracts:

“All disputes arising out of or in connection with this agreement will be resolved by the Amsterdam District Court following proceedings in English before the Chamber for International Commercial Matters (“Netherlands Commercial Court” or “NCC District Court”), to the exclusion of the jurisdiction of any other courts. An action for interim measures, including protective measures, available under Dutch law may be brought in the NCC’s Court in Summary Proceedings (CSP) in proceedings in English. Any appeals against NCC or CSP judgments will be submitted to the Amsterdam Court of Appeal’s Chamber for International Commercial Matters (“Netherlands Commercial Court of Appeal” or “NCCA”). The NCC Rules of Procedure apply.”

Arbitration

A matter may be subject to arbitration, if the parties have expressly agreed in a written agreement that proceedings will be submitted to arbitration. The place of arbitration is determined by agreement of the parties, or failing such agreement, as determined by the arbitral tribunal.

4. Which law is applicable to the different (court) procedures?

 Proceedings on the merits

The court applies Dutch law, including the Code on Civil Procedures (‘CCP’). The applicable substantive law is determined by reference to the rules of Dutch private international law.

NCC

The court applies Dutch law, including the CCP. The applicable substantive law is determined by reference to the rules of Dutch private international law.

Arbitration

If a choice of law is made by the parties, the arbitral tribunal will rule in accordance with the law chosen by the parties. If there is no choice of law, the arbitral tribunal judges in accordance with the law which it considers appropriate.

5. Does the judge have specific knowledge of the market?

Proceedings on the merits

The judges in proceedings on the merits usually have no specific knowledge of the market in which the parties in dispute operate. That can be seen as a disadvantage, particularly in cases where some market knowledge is preferable.

NCC

NCC judges are experienced in complex international business matters. That might be a reason to choose for this type of dispute resolution. Unlike proceedings on the merits, a case before the NCC is handled by a three-judge panel.

Arbitration

The arbitral tribunal always consists of an uneven number of arbitrators. The tribunal may also consist of a sole arbitrator. The arbitrator or arbitrators will be appointed by the parties. Therefore it is certainly possible that the tribunal consists of arbitrators with specific knowledge of the market in which the parties in dispute operate.

6. Are the procedures and the rulings confidential?

Proceedings on the merits

In principle, the hearing is in public. However, the court may direct that (part of) the hearing be held in private or that only certain persons are allowed to attend the hearing. The judgement is given in public.

NCC

In principle, the hearing is in public. However, the court may direct that (part of) the hearing be held in private or that only certain persons are allowed to attend the hearing. The judgement is given in public.

Arbitration

In principle, arbitration proceedings are private and confidential. This is often seen as an advantage of arbitration proceedings, as especially in international commercial disputes parties are not eager for the contents of the dispute to become public.

7. What are the costs of the different (court) procedures?

Proceedings on the merits

Court fees differentiate between EUR 85 and EUR 4,200, depending on parties in dispute (natural person or legal entity) as well as the amount of claim.

NCC

The NCC uses set rates, irrespective of the claim. The court fee amounts to EUR 15,000 for the District Court and EUR 20,000 for the Court of Appeal.

Arbitration

The costs for arbitration proceedings vary and depend on e.g. the form of arbitration, the arbitration institute and/or the number of arbitrators.

8. Can the losing party be ordered to pay the costs of the proceedings?

Proceedings on the merits

In proceedings on the merits, the judge(s) can order the unsuccesful party to bear (part of) the costs of the proceedings. These costs consist of lawyer’s fees and court fees. However, the awarded procedural costs are rarely sufficient to cover the actual procedural costs.

NCC

Parties may make agreements with respect to the allocation of costs of proceedings. In the absence of such an agreement, Dutch law applies, meaning that the unsuccessful party can be ordered to bear (part of) the costs of the proceedings. These costs consist of lawyer’s fees and court fees.

Arbitration

Parties can make agreements with respect to the allocation of costs of proceedings.

9. What is the average lead time of the different (court) proceedings?

Proceedings on the merits

Proceedings on the merits have lead time of (at least) 8 to 12 months. However, courts are dealing with (substantial) backlogs, which usually results in a much longer lead time.

NCC

The NCC stands for speedy proceedings. Even though the NCC is only operable since January 2019, it seems that procedures before the NCC are indeed finalized in a shorter period of time as compared to (for example) proceedings on the merits.

Arbitration

The lead time of an arbitration proceedings depends on (amongst others) the form of arbitration and the arbitration institute that handles the case. In general, an arbitration procedure can be finalized in a relatively short period of time.

10. Is the judgment consigned in other EU member states and can it be enforced there? And outside the EU?

 Proceedings on the merits

Dutch judgments are enforceable in the European Union and the Kingdom of the Netherlands without any declaration of enforceability being required.

Enforceability of a Dutch judgement outside the EU is governed by conventions to which the Netherlands is a party and by general private international law in the jurisdiction where enforcement is sought.

NCC

NCC judgments are enforceable in the European Union and the Kingdom of the Netherlands without any declaration of enforceability being required.

Enforceability of a NCC judgment outside the EU is governed by conventions to which the Netherlands is a party and by general private international law in the jurisdiction where enforcement is sought.

Arbitration

Arbitral awards are enforceable in most countries through international conventions.

Other questions concerning commercial dispute resolution?

If you have other questions concerning commercial dispute resolution? Please feel free to contact us.