Reservations over the Netherlands Commercial Court

By Professor Bas van Zelst

 

On 18 July 2017 the Government submitted a proposal for the establishment of the Netherlands Commercial Court (NCC). In brief, the proposal provides for the establishment of a court (and appellate court) before which parties can litigate in the English language. According to the proposal, the NCC will give the Dutch economy an impulse. The NCC provides Dutch parties with access to an affordable, English judicial system of high quality, which in turn is beneficial to the Dutch service sector (from counsel to hotels and from translation agencies to couriers).

Supposing these assumptions are correct – the proposal seems to paint a rose-tinted picture – we have three reasons to question the desirability of the NCC in its current form. First, it is doubtful whether it is a task of the government to offer a service that is readily available in the market. Arbitration also provides for English-language proceedings and functions perfectly.

The proposal seems to presume that arbitration is too expensive for Dutch parties. This does not follow from the figures. Moreover, arbitral clauses are recognized all over the world and arbitral awards are easily enforceable all across the globe, while court judgments are not. Take the example of a Dutch company having a dispute with an American firm: a decision issued by an arbitral tribunal would be readily enforceable in the US. Enforcing a national court judgment, by contrast, may prove problematic.

Secondly, the court fees for the NCC are (at least) four times as high as the fees due at the ‘normal’ courts. In return, parties get (much) speedier and flexible proceedings. In other words: who pays more, gets a different – maybe even ‘better’ – product. In our view, a two-class judiciary does not fit within the Dutch legal order. And when parties are willing to pay more for a fast/faster and more flexible procedure, they can always choose to go for arbitration.

Thirdly, there is a more legal-technical point. In Europe, choices for and decisions of other European courts are respected in other jurisdictions when certain criteria (as set by the European Court of Justice) are met. In short, these criteria require that a court’s jurisdiction is not solely dependent on the will of the parties. In its current form the NCC does – other than the London Commercial Court with which it is to compete – not seem to meet this criterion. It is our analysis that this issue has been addressed insufficiently in the current proposal. This makes it doubtful whether the NCC’s rulings will be recognized by other European courts. This will likely be a major concern to commercial parties. After all, there’s no point in opting for a court whose judgments cannot be per se enforced.

For all these reasons, we doubt whether the Dutch legal order will benefit from the proposed NCC. We propose the introduction of a separate chapter in the Dutch Arbitration Act on international matters. These rules must include provisions providing that procedures that are related to arbitration proceedings (for instance procedures concerning setting-aside or recognition and enforcement of an arbitral award) may be conducted in English. In the proposal for the NCC this last option unfortunately is only a side-note.

 

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