Modernizing Dutch arbitration law

Introduction

January 2015 saw the first changes to Dutch arbitration law since 1986. The changes seek to modernize various aspects of the law and make the Netherlands more attractive as a venue for international arbitration. We give an overview of the most important amendments.

In the Netherlands, arbitration is one of the most important forms of commercial dispute resolution. A new arbitration act (the Act)¹, which entered into force on January 1, 2015, aims to both modernize and simplify arbitrations in the Netherlands. It will reduce reliance on the domestic courts and allow parties more freedom to agree on alternative rules with respect to arbitration proceedings between them. It will also bring Dutch arbitration law more in line with the UNCITRAL Model Law on International Commercial Arbitration. The Act’s most important amendments are the following:

Electronic arbitrations

The Act provides for the conduct of arbitration proceedings electronically.

Codifying best practice

The Act codifies into law provisions for the written phase of arbitration proceedings and for site viewings and inspections. It provides that parties may agree on different procedural rules from the (non-mandatory) procedural rules provided for by law to apply to their specific dispute. Parties may, for instance, decide on the extent of written statements each can submit. The Act also codifies that a counterclaim can only be brought when that counterclaim is governed by the same arbitration agreement.

Annulment proceedings

The annulment of arbitral awards is now limited to one set of proceedings, before the Court of Appeal. Formerly, proceedings to set aside an arbitral award went before a district court, whose judgment would be subject to appeal at the Court of Appeal. Under the Act, annulment proceedings must now be brought directly before the Court of Appeal, making them more time- and cost-efficient, and in line with international best practice. A judgment of the Court of Appeal does, however, remain subject to appeal to the Supreme Court.

The Court of Appeal can also suspend annulment proceedings and refer a matter back to the arbitral tribunal, which will then be reinstated and have the opportunity to remedy the grounds for annulment in the arbitral award.

Dutch courts in foreign arbitration proceedings

Parties to arbitration proceedings seated outside the Netherlands are no longer prevented from seeking the assistance of a Dutch district court. Parties may require such assistance for preliminary witness hearings and other interim measures. In principle, the same procedural rules will apply as for arbitration proceedings in the Netherlands.

Institutional administration of arbitrator challenges

The Act aims to make the Netherlands more attractive for international arbitrations by providing for the option of institutions to administer proceedings for the challenge of arbitrators. This change was included as a result of requests by the ICC and the Permanent Court of Arbitration. Under the Act, parties can agree on an independent third party (for example, an arbitrator institution) to review the challenge request, instead of the preliminary relief judge at the district court.

Increasing consumer confidence

The Act aims to increase consumer confidence by qualifying as ‘unreasonably onerous’ (within the meaning of article 6:236 of the Dutch Civil Code) arbitration clauses included in the general terms and conditions of contractual relationships with consumers. This is unless such an arbitration clause allows the consumer to submit the dispute before the regular courts within at least one month of that clause being invoked. Therefore, consumers have more power to avoid arbitration clauses that they are confronted with.

Depositing arbitral awards

The Netherlands was one of the few remaining countries which required arbitral awards to be deposited at district courts. Under the Act, depositing an arbitral award at a court registry has become optional. This is one of the measures taken with a view to easing the administrative burden on the parties.

Statute of limitation

The Act provides that the statutory period of limitation for claims governed by Dutch law will be interrupted by the initiation of arbitral proceedings, even if the arbitral tribunal subsequently declines jurisdiction. A new statutory period of limitation will start on the day following the date of the award.

Provisional measures

A final amendment is that the Act codifies the parties’ rights to request provisional measures in pending arbitral procedures. In addition, it confirms that parties may agree to the appointment of emergency arbitrators pending the constitution of the proper tribunal. Under the Act, a decision rendered as a result of a request for a provisional relief will qualify as an arbitral award.

The consequences of the amendments in Dutch arbitration law may be relatively limited. Arbitration proceedings in the Netherlands are largely conducted by arbitration institutions, such as the Netherlands Arbitration Institute (NAI). Certain of the amendments will have limited effect in practice, because the rules of arbitration institutions already include similar provisions. In general, however, the amendments to the Dutch arbitration law will increase the perception of the Netherlands as an attractive venue for international arbitration.