Yuridicheskaya Praktika newspaper, №28-29, 2014
Conditions for the development of arbitration in the Netherlands make the kingdom more attractive place for alternative dispute resolution.
Article prepared by Jane EKELSHOT, Integrites' intern from the Netherlands.
Arbitration is a widespread and preferred form of dispute resolution that parties may select as an alternative to courts. In the Netherlands arbitration can be chosen as an alternative to court proceedings for the resolution of national and international disputes.
One of the most important benefits of arbitration for the resolution of international disputes is the international enforceability of arbitral awards. The Netherlands is party to the New York Convention, as are 140 other countries. The Convention has been in force in the Netherlands since 1964, subject to the reservation that only awards made in other contracting states are to be recognized and enforced.
Even though the New York Convention provides a framework for the recognition and enforcement of awards, national law governs the procedural aspects of the arbitral proceedings. Dutch law continues to play a significant role in arbitral proceedings initiated in the Netherlands. It does not differentiate between national and international arbitration proceedings.
The Hague is seen as legal capital of the world, even though the Netherlands is not recognized as one of the leading institutional seats for arbitration. The city is home to some 150 international institutions, including the International Court of Justice, the Permanent Court of Arbitration, the Iran-US Claims Tribunal and The Hague Academy of International Law. The office of ICC Netherlands is also located in The Hague.
Dutch Arbitration Act
In Dutch law, special provisions about arbitration (articles 1020-1076 DCCP) are situated in Book IV of the Dutch Code of Civil Procedure (DCCP). These provisions, combined they are called the ‘Dutch Arbitration Act’ (Arbitragewet), are applicable when the place of arbitration is situated within the Netherlands.
The current provisions were introduced in 1986. The UNICITRAL Model Law of 1985 was adopted in about 60 countries, but the Netherlands was not one of them although some influence is noticeable. Recent amendments were adopted to modernize the Dutch law on arbitration and make the Netherlands more attractive as a seat for international arbitration. The new Act will enter into force in the beginning of 2015.
Agreement to arbitrate
According to the Dutch Constitution, no party may be prevented against his will from being heard by a court he is entitle to apply to by law. All parties involved in the arbitration procedure will need to consent to submitting the dispute to arbitration. The agreement to arbitrate does not have to meet any formal requirements, but if the validity of the agreement is contested the existence of the agreement must be proven by way of a written document (Article 1021 DCCP).
In local and international business, it is not unusual that in large contracts an arbitration clause is incorporated. In this case parties by advance agree to submit future disputes to arbitral tribunals. Sometimes companies include these kinds of clauses in their general terms and conditions. Parties can also agree to settle a dispute by arbitration after the dispute has arisen. Parties can agree upon the tribunal which will settle their dispute and the applicable law.
Generally an arbitration agreement only binds the parties to that agreement. There are various ways in which a third party can participate though. A third party who has an interest in arbitral proceedings can join or intervene in them. The party will be admitted, if allowed by the tribunal and if the third party agrees to submit to the arbitration agreement (Article 1045 DCCP). The third party cannot be forced to join the arbitral proceeding against his will.
Peculiarities of the Dutch Arbitration Act
Certain types of disputes must be settled by state courts and cannot be resolved by way of arbitration. Article 1020(3) DCCP stipulates that arbitral proceedings may not lead to the determination of legal consequences that are not at the free disposal of the parties, which excludes certain disputes relating to family law, the granting of a bankruptcy order, the annulment of a decision of a legal person and certain intellectual property disputes.
In a number of cases, the Preliminary Relief Judge of the District Court may be called upon to assist with the conduct of the arbitration. For example, when parties have failed to reach agreement on the number of arbitrators either party can request the Preliminary Relief Judge to make a ruling (Article 1026 DCCP). In the Netherlands, the Preliminary Relief Judge, also referred to as ‘the President of the Dutch District Court’, decides in preliminary injunction proceedings. In arbitration, a special preliminary injunctions procedure exists. Parties need to declare this procedure applicable in a special agreement. The special preliminary injunctions award is enforced and recognized by the District Court.
The arbitral dispute is settled by the final and conclusive award. The award needs to contain a motivation; else it is liable to be set aside. After the award has become final and conclusive, the district courts will recognize and enforce it. The recognition procedure takes about two weeks. Parties to the arbitration agreement cannot challenge the outcome as is established by the award, as it acquires the force of res judicata.
Arbitral institutes in the Netherlands
The most important arbitral institutes are the Netherlands Arbitration Institute (NAI) and the Permanent Court of Arbitration (PCA) in The Hague for investor-state and state-to-state arbitration.  There are also permanent arbitration boards, like De Raad van Arbitrage voor de Bouwbedrijven (construction) and numerous other trade-specific arbitration panels. Parties can also decide not to appoint an institution to administer the arbitration and use ad hoc arbitration instead.
In the Netherlands, arbitration is also commonly used in sports-related disputes and in telecom and internet cases. ICT-Office (a Dutch trade association for 550 IT, telecom, internet and office companies) recommends that its members use general terms and conditions containing an arbitration clause based on the rules of the foundation Stichting Geschillenoplossing Automatisering.
Introduction of online arbitrage in the new Dutch Arbitration Act
The 2015 version of the Dutch Arbitration Act includes a revised Article 1072b DCCP. The revised article will make it possible to submit a dispute to arbitrage online and have court proceedings and hearings of parties, witnesses and experts online by use of videoconference or Skype. Especially in international arbitration these changes will lead to a vast reduction of expenses for parties. As mentioned earlier, these changes should make the Netherlands more attractive for international arbitral institutions.
While the Dutch Arbitration Act was being revised, in the Netherlands some other interesting developments took place. In 2004 the first online ADR procedure was held by the use of internet, e-mail and telephone. Parties digitally signed the settlement agreement. In 2010 the eCourt was created for the online resolution of disputes connected with the online purchase of goods and services. As from 2011, Book IV of the DCCP on arbitration is applicable to dispute resolution by the eCourt.
The use of online arbitration brings up some practical questions. For instance, how do you guarantee the confidentiality of the data used by the participants and how do you establish the identity of the participants? During the proceedings the internet connection and data traffic need to be sealed by encryption.The identity of the parties involved needs to be established by trusted third parties or certificates. The parties can access to the online arbitration platform using unique passwords.
In Dutch law already some amendments were made to facilitate online arbitrage and online litigation. In 2004, Article 1021 DCCP was amended in connection with the implementation of the Electronic Commerce Directive. This directive stipulated that an electronic agreement should be treated in the same way as a written agreement, if it meets certain standards. In 1021(6) DCCP a sentence was added, which provides that the agreement to arbitrate can also be proven electronically. In 2010, a new Article 156a DCCP was introduced pursuant to which electronic acts are equated with written acts under certain circumstances.
With the introduction of Article 1072b DCCP, a legal basis for online arbitration is created. The NIA has been working some time on creating the necessary conditions for e-arbitration. With the new Act coming into force, the Netherlands might be one of the first countries offering the possibility of online arbitration.
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