Arbitration in the Netherlands: the Dutch Arbitration Act, awards and enforcement

Arbitration in the Netherlands is governed by the Dutch Arbitration Act, Book 4 of the Dutch Code of Civil Procedure (Articles 1020 to 1076), in its current form since 1 January 2015. Parties can agree to submit present or future disputes to arbitration; the agreement is proven by a written document, which can include accepted general terms. A Dutch court must then decline jurisdiction if a party invokes the agreement before any other defence. The tribunal decides on its own jurisdiction, can grant interim relief and gives a final award that can be enforced after leave from the court. An award can only be challenged by setting aside or revocation, before the court of appeal, within three months. Foreign awards are enforced under the New York Convention.

Arbitration in the Netherlands at a glance

• Law: Articles 1020 to 1076 of the Dutch Code of Civil Procedure (DCCP), modernised with effect from 1 January 2015.
• Agreement: proven by a written document or electronic data; a reference to general terms providing for arbitration is enough if they were accepted (Article 1021).
• Courts step back: a court declares itself without jurisdiction if the arbitration agreement is invoked before any other defence (Article 1022).
• Tribunal: an odd number of arbitrators, possibly one; appointed as agreed, otherwise by the court after three months (Articles 1026 and 1027).
• Enforcement: leave (exequatur) from the preliminary relief judge of the district court at the seat (Article 1062).
• Challenges: only setting aside or revocation, before the court of appeal, generally within three months (Articles 1064 to 1068).
• Foreign awards: the Netherlands applies the 1958 New York Convention, with a reciprocity reservation.

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What Is the Dutch Arbitration Act?

The Dutch Arbitration Act is Book 4 of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering), Articles 1020 to 1076. The current text results from the Act modernising arbitration law of 2 June 2014, which entered into force on 1 January 2015 and replaced the 1986 regime.

The Act applies when the place (seat) of arbitration is in the Netherlands (Article 1073(1)), and also governs the recognition and enforcement of foreign awards (Articles 1074 to 1076). Most of its provisions apply "unless the parties have agreed otherwise", which gives parties and institutional rules wide room to shape the procedure. A limited number of rules are mandatory, such as equal treatment of the parties and the right to be heard (Article 1036(2)), and the grounds for setting aside an award.

What Makes an Arbitration Agreement Valid Under Dutch Law?

Parties can agree to submit to arbitration disputes that have arisen, or may arise, from a defined legal relationship, contractual or not (Article 1020(1) DCCP). The agreement is proven by a written document; a document that refers to general terms providing for arbitration is sufficient if it was accepted, expressly or tacitly (Article 1021).

• Two forms: a submission agreement for an existing dispute, or an arbitration clause for future disputes (Article 1020(2)).
• Articles of association: an arbitration clause in binding articles or regulations also counts (Article 1020(5)).
• Rules by reference: arbitration rules referred to in the agreement form part of it (Article 1020(6)).
• Electronic: the agreement can also be proven by electronic data (Article 1021).
• Arbitrability: the agreement may not lead to legal consequences that the parties cannot freely determine (Article 1020(3)), such as matters of personal status.

The writing requirement is a rule of proof, not of validity: it concerns how the agreement is shown to exist. For consumers there is extra protection. An arbitration clause in general terms used against a consumer is black-listed unless the consumer is given at least one month, after the business invokes the clause in writing, to choose the competent state court instead (Article 6:236(n) of the Dutch Civil Code). See general terms and conditions under Dutch law.

What Happens if a Party Goes to Court Despite an Arbitration Agreement?

The court declares that it has no jurisdiction if a party invokes the arbitration agreement before submitting any other defence, unless the agreement is invalid (Article 1022 DCCP). A party that does not raise it in time accepts the court's jurisdiction.

An arbitration agreement does not exclude the state courts entirely. A party can still ask the court for a conservatory measure, such as leave for a prejudgment attachment, or go to the preliminary relief judge in summary proceedings (Article 1022a), and can ask the court to order provisional evidence such as a preliminary witness hearing (Article 1022b). For the choice between state courts in international matters, see jurisdiction in international disputes.

How Are Arbitrators Appointed and Challenged in the Netherlands?

A tribunal has an odd number of arbitrators and can consist of one (Article 1026 DCCP). Arbitrators are appointed as the parties agreed, possibly by a third party such as an arbitration institute; otherwise jointly. If no appointment is made within three months after the arbitration started, the preliminary relief judge of the district court appoints on request (Article 1027).

Arbitrators must be impartial and independent. A person approached as arbitrator who suspects that they could be challenged must say so in writing, with reasons, and an arbitrator who develops such a suspicion during the proceedings must inform the parties (Article 1034). A party that wants to challenge an arbitrator gives written notice with reasons within four weeks of learning of the ground. If the arbitrator does not withdraw within two weeks, the preliminary relief judge of the district court decides on request (Article 1035). Parties can agree on different time limits, or on an independent third party instead of the court to decide the challenge (Article 1035(6) and (7)).

How Does an Arbitration Start and How Is It Conducted?

Under an arbitration clause, the arbitration starts on the day the other party receives a written notice that arbitration is being commenced, stating what is to be submitted to arbitration, unless the parties agreed otherwise (Article 1025 DCCP). The procedure is then as the parties agreed, or as the tribunal decides (Article 1036).

• Equal treatment: the tribunal treats the parties equally and gives each the opportunity to present its case and respond (Article 1036(2)).
• Seat: determined by the parties or, failing that, by the tribunal; the seat is also the place of the award (Article 1037). Hearings can be held elsewhere.
• Consolidation: a third party designated by the parties can order consolidation with other arbitrations in or outside the Netherlands; failing a designated third party, the preliminary relief judge of the Amsterdam district court can consolidate arbitrations pending in the Netherlands (Article 1046).
• Timely objections: a party must object without unreasonable delay to any breach of the procedural rules; otherwise it loses the right to rely on it later (Article 1048a).
• Electronic communication: written documents and notices can be exchanged electronically if the addressee has indicated that it can be reached that way and the tribunal agrees (Article 1072b).

Can an Arbitral Tribunal Decide on Its Own Jurisdiction?

Yes. The tribunal may rule on its own jurisdiction (Article 1052(1) DCCP). A party that appears in the arbitration must object that there is no valid arbitration agreement before any other defence, or it loses that argument, both in the arbitration and before the courts.

The only exception is the objection that the dispute is not capable of arbitration under Article 1020(3), which can still be raised later (Article 1052(2)). A party that took part in constituting the tribunal cannot later object that it was improperly constituted (Article 1052(3)). These rules also limit the grounds available in setting aside proceedings (Article 1065(2) and (3)).

Can an Arbitral Tribunal Grant Interim Relief?

Yes. During arbitration on the merits, the tribunal can grant interim relief at a party's request, as long as it is connected to the claim or counterclaim (Article 1043b(1) DCCP). The parties can also agree to give a separate tribunal the power to grant interim relief, whether or not proceedings on the merits are pending (Article 1043b(2)).

The tribunal cannot grant conservatory measures such as prejudgment attachments; those remain with the state courts (Article 1043b(1) and Article 1022a). It can require security. Unless the tribunal decides otherwise, its decision on interim relief counts as an arbitral award, so it can be enforced and challenged as such (Article 1043b(4)).

What Must a Dutch Arbitral Award Contain?

A multi-member tribunal decides by majority, unless otherwise agreed. The award is made in writing and signed by the arbitrators, and states the names and residences of the arbitrators and the parties, the date and place of the award, and the reasons for the decision (Article 1057 DCCP).

Reasons are not required for a mere determination of quality or condition, for a settlement recorded in an award, or where the parties agree in writing, after the arbitration has started, that no reasons will be given (Article 1057(5)). The tribunal sends the award to the parties; filing the award with the district court registry is only required if the parties agreed to it (Article 1058(1)). An award is deemed sent four weeks after its date (Article 1058(2)).

Costs. The Arbitration Act contains no rules on the costs of the arbitration or legal fees. Their allocation follows from the parties' agreement and the applicable arbitration rules.

Confidentiality. The Act does not impose a general duty of confidentiality either. Parties who want it should agree on it expressly, directly or through arbitration rules that provide for it.

Is There an Appeal Against a Dutch Arbitral Award?

Only if the parties have agreed on arbitral appeal (Article 1061b DCCP). There is no appeal to the state courts on the merits.

If arbitral appeal has been agreed, it must be lodged within the agreed period or, failing that, within three months after the award was sent (Article 1061c). It is available against a final award and a last partial final award (Article 1061d).

How Is a Dutch Arbitral Award Enforced?

An award can only be enforced in the Netherlands after the preliminary relief judge of the district court at the seat of arbitration has granted leave (exequatur) at a party's request (Article 1062 DCCP).

The judge may refuse leave only if, after a summary investigation, it is likely that the award will be set aside on one of the grounds in Article 1065(1) or revoked on one of the grounds in Article 1068(1), or if a penalty payment was imposed in breach of Article 1056; in that last case only the penalty is refused (Article 1063(1)). Once the time limit for setting aside has expired unused, leave can only be refused for conflict with public policy (Article 1063(2)). If leave is granted, the other party can only use the remedies of setting aside and revocation (Article 1062(3)). For enforcement measures after leave, see enforcing a judgment in the Netherlands.

How Can a Dutch Arbitral Award Be Set Aside or Revoked?

A final or partial final award can only be challenged by setting aside or revocation (Article 1064 DCCP). Both are brought before the court of appeal of the district in which the seat of arbitration lies.

The grounds for setting aside are exhaustive, and limited further: exceeding the mandate only counts if it is serious and was objected to in time (Article 1065(4)), and a part of the award that is not inseparably connected to the defective part stands (Article 1065(5)). All grounds must be stated in the writ of summons (Article 1064a(4)). The court of appeal can suspend the proceedings to give the tribunal the opportunity to remove the ground for setting aside, for example by reopening the arbitration (remission, Article 1065a).

If the seat is in the Amsterdam district and the parties have expressly agreed, a claim for setting aside can be brought before the Netherlands Commercial Court of Appeal, the English-language international commercial chamber of the Amsterdam Court of Appeal (Article 1064a(1)). An appeal in cassation to the Supreme Court is available, but parties can exclude it, unless one of them is a consumer (Article 1064a(5)). After a setting aside becomes final, the courts regain jurisdiction only if the ground was the absence of a valid arbitration agreement; otherwise the arbitration agreement remains in force unless the parties agreed otherwise (Article 1067).

How Are Foreign Arbitral Awards Enforced in the Netherlands?

An award made abroad to which a recognition and enforcement treaty applies can be recognised and enforced in the Netherlands on request, with the court of appeal deciding at first instance (Article 1075 DCCP). The main treaty is the 1958 New York Convention, which the Netherlands signed on 10 June 1958 and ratified on 24 April 1964, with the reservation that it applies the Convention only to awards made in another contracting state.

Under Article V of the New York Convention, recognition can be refused only on limited grounds: incapacity of a party or an invalid arbitration agreement; lack of proper notice or inability to present one's case; an award beyond the scope of the submission; irregular composition of the tribunal or procedure; an award that is not yet binding or has been set aside or suspended where it was made; a subject matter that is not capable of settlement by arbitration; or conflict with public policy.

Where no treaty applies, or a treaty allows reliance on Dutch law, Article 1076 applies. The award and the arbitration agreement must be produced, and recognition is refused if the other party proves that there was no valid arbitration agreement, the tribunal was improperly constituted, the tribunal exceeded its mandate, the award is still open to appeal where it was made, or the award has been set aside there; or if recognition conflicts with public policy. See also recognition of foreign judgments.

Which Arbitration Institutes Operate in the Netherlands?

The main general institute is the Netherlands Arbitration Institute (Nederlands Arbitrage Instituut, NAI), which administers domestic and international commercial arbitrations under its own rules.

There are also sector institutes, for example for construction and IT disputes, that apply their own rules. International institutions such as the ICC can administer arbitrations with their seat in the Netherlands; the Dutch Arbitration Act then applies to matters such as enforcement and setting aside. Parties can also choose ad hoc arbitration, for example under the UNCITRAL Arbitration Rules, without an institute.

Should You Choose Arbitration or the Dutch Courts?

For international commercial disputes, the Netherlands Commercial Court in Amsterdam offers state court proceedings in English as an alternative; see the Dutch court system. For less adversarial options, see mediation and alternative dispute resolution.

What Should an Arbitration Clause Under Dutch Law Contain?

1. Which disputes are covered: all disputes arising from or connected with the contract.
2. Institutional or ad hoc arbitration, and which rules apply.
3. The seat of arbitration, for example Amsterdam or Rotterdam.
4. The number of arbitrators and how they are appointed.
5. The language of the proceedings.
6. Whether there is arbitral appeal, and whether cassation is excluded.
7. Confidentiality, if required.
8. For consumers: the one-month option to go to the competent court.
9. The law governing the contract, which is separate from the seat; see choice of forum clauses.

Which Legal Sources Govern Arbitration in the Netherlands?

• Book 4 of the Dutch Code of Civil Procedure, Articles 1020 to 1076, arbitration
• Act of 2 June 2014 modernising arbitration law (Stb. 2014, 200), in force 1 January 2015 (Stb. 2014, 254)
• Article 6:236 of the Dutch Civil Code, arbitration clauses in consumer terms
• New York Convention 1958, recognition and enforcement of foreign arbitral awards