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New special commercial court in the Netherlands

10/04/2019
Since January 1, 2019, there is a new (and special) court: the Netherlands Commercial Court (“NCC”). The NCC deals with international cases concerning commercial disputes. What is special about the NCC is that - contrary to normal practice - the proceedings and the judgment are not conducted or drawn up in the Dutch language, but in the English language. The reason behind this is that the legislator wanted to meet the growing demand in international business. The legislator signalled that many (large) parties, when concluding their international contracts, no longer chose to submit a dispute to the Dutch court, but instead went to courts in other countries, such as the London Commercial Court, or opted for arbitration, such as ICC or LCIA. In many cases parties would find it more attractive to litigate in English, because this is often the language of trade. By making this possible for the Dutch court, the Dutch legislator hopes that it will be easier for parties that operate internationally to opt for the Dutch court (again). With this, the legislator hopes to stimulate the investment and trade climate in the Netherlands.

Since January 1, 2019, there is a new (and special) court: the Netherlands Commercial Court (“NCC”). The NCC deals with international cases concerning commercial disputes. What is special about the NCC is that - contrary to normal practice - the proceedings and the judgment are not conducted or drawn up in the Dutch language, but in the English language. The reason behind this is that the legislator wanted to meet the growing demand in international business. The legislator signalled that many (large) parties, when concluding their international contracts, no longer chose to submit a dispute to the Dutch court, but instead went to courts in other countries, such as the London Commercial Court, or  opted for arbitration, such as ICC or LCIA. In many cases parties would find it more attractive to litigate in English, because this is often the language of trade. By making this possible for the Dutch court, the Dutch legislator hopes that it will be easier for parties that operate internationally to opt for the Dutch court (again). With this, the legislator hopes to stimulate the investment and trade climate in the Netherlands.

In order to access the NCC, the matter must relate to a cross border dispute. However, this condition will be met relatively easily, since it is clear that a case concerns an international dispute if:

  • at least one of the parties to the proceedings is resident abroad, or is a company established or established abroad, or is a subsidiary of such a company;
  • a treaty or foreign law applies to the dispute or the dispute arises from an agreement that is drafted in a language other than Dutch;
  • at least one of the parties to the proceedings is a company or belongs to a group of companies, the majority of whose employees work outside the Netherlands worldwide;
  • at least one of the parties to the proceedings is a company, or belongs to a group of companies, of which more than half of the consolidated turnover is achieved outside the Netherlands;
  • at least one of the parties to the proceedings is a company, or belongs to a group of companies, whose securities are traded on a regulated market as defined in the Financial Supervision Act (Wft) outside the Netherlands;
  • the dispute concerns legal acts or legal acts outside the Netherlands, or
  • there is a cross-border interest to the dispute.

In addition, all parties involved in the proceedings must explicitly opt in (in writing) for a procedure at the NCC in the English language. The NCC (A) therefore recommends to include the following clause into agreements:

"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 "). An action for interim measures, including protective measures, available under Dutch law may be brought to the NCCs Court in Summary Proceedings (“CSP”) in proceedings in English.

Meanwhile the first dispute has already been settled by the CSP. The (English-language) judgment was published (https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBAMS:2019:1637).

NCC versus arbitration

If you are considering including a clause in an agreement that includes the choice of the NCC and CSP instead of arbitration or the regular Dutch court, then at least consider the following points when making a decision

  1. Costs: The court fee for the NCC and the CSP is approximately four times higher than in normal proceedings before the Dutch court, but they will generally be lower than in an arbitration, where, in addition to the administrative costs, the salary of the arbitrators must be paid by the parties and, moreover, the full process costs order applies.

  2. Enforcement: An important reason for choosing arbitration is the wide scope for enforcement. A judgment of a Dutch judge (obtained in a normal procedure or an NCC procedure) can easily be enforced in the European Union on the basis of the recast EEX regulation. Outside the European Union, enforcement is often more difficult. This is not the case with arbitration. Under the New York Convention, an arbitral award can be enforced in 159 countries. The New York Convention does, however, have more scope for challenging enforcement.

  3. Confidentiality: Arbitration is often chosen because of the confidentiality of the procedure. This confidentiality is not found at the NCC / CSP: in principle the procedure is public and also a public decision follows.

  4. Nationality and expertise in dispute resolution: Another point of attention is that, in contrast to arbitration and to various other commercial courts, Dutch judges will be seated in the NCC and CSP. Although these judges have been selected for their experience in commercial practice and their excellent command of the English language, an important reason for choosing arbitration is often the specific expertise and neutrality - in terms of nationality - of the arbitrators. A company sometimes does not want to be subject to the state court of its counterparty's home country, because there is a feeling that there might be a "home advantage". Moreover, unlike arbitration, a regular judge and the NCC do not have the option of choosing the judges themselves and the number of judges.

  5. Appeal: One reason for opting for arbitration is that, as a rule, arbitration has only one instance, whereas the Dutch system has three (n general, exceptions are of course possible)

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