Leiden Law Blog

International commercial courts: the Netherlands is lagging behind

Posted on by Bob Wessels in Private Law
International commercial courts: the Netherlands is lagging behind Supreme Court Building, Singapore. Photo: Terence Ong

They shoot up like mushrooms: international commercial courts. A recent study has assessed these courts in four jurisdictions: the Dubai International Financial Centre Courts, the Qatar International Court, the Abu Dhabi Global Market Courts and the Singapore International Commercial Court (SICC). The unique features these courts have, compared to traditional domestic courts, the study reveals, make them particularly attuned to the needs and realities of international commerce. At least, this is often the decisive argument given for their introduction. The authors of the research paper use the Singaporean Court, established in 2015, as a case study for an examination of the key issues concerning the institutional design and perceived benefits of international commercial courts. The SICC is a special division of the Singapore High Court and only hears claims ‘of an international and commercial nature’. It  has its own procedural rules and guidelines for practice. The study reveals that these make provisions for various innovations, such as:

  • parties may be represented by foreign lawyers where the action is an ‘offshore case’ (i.e. a case that has ‘no substantial connection to Singapore’);
  • proceedings may be confidential (particularly if the case is an ‘offshore case’);
  • parties may apply for an order to replace Singapore evidential rules with other rules of evidence;
  • a party may apply to have a question of foreign law determined on the basis of submissions rather than proof; and
  • parties may contract out of, or limit, their rights to appeal to the Court of Appeal of the Singapore Supreme Court against any SICC judgment or order.

The judges in the SICC include highly regarded international jurists who are experienced in commercial matters (‘International Judges’), as well as Singapore Supreme Court judges from both the Court of Appeal and the High Court. The study covered the period between May 2016 and May 2017, during which the SICC published ten judgments that relate to six separate actions. At least one International Judge was assigned to each SICC case. The three actions heard by a single judge were assigned to International Judges; in the actions heard by three judges, two out of three judges were International Judges. The study reports on several of these cases and, overall, finds that the SICC is willing to apply its features to achieve its objective of being ‘particularly attuned to the needs and realities of international commerce’. This should, the authors conclude, operate as an incentive for parties to write SICC jurisdiction clauses into their contracts, particularly if SICC judgments are enforceable in the country in which enforcement is likely to be sought. See Godwin, Andrew and Ramsay, Ian and Webster, Miranda, International Commercial Courts: The Singapore Experience (December 31, 2017). Melbourne Journal of International Law, Vol. 18, No. 2, 2017, Forthcoming. Available at SSRN.

In the Netherlands a similar development is taking place. Originally intended to start in 2017, the Dutch Judiciary aims to open a special facility in an English-language Netherlands Commercial Court (NCC) for the settlement of large national and international trade conflicts. The NCC will be part of the Amsterdam District Court. Cases in appeal will come to the Court of Appeal in Amsterdam. Its main features will be:

  • to act as a judge; judges will have to demonstrate a particular expertise and experience in large commercial disputes;
  • English will be the language in the proceedings and the decisions and judgements will also be rendered in English;
  • these judgments will qualify as regular Dutch court judgements and therefore can benefit from rules regarding recognition and enforcement within the EU;
  • the proceedings will follow regular Dutch civil procedure rules; and
  • the NCC courts will only have jurisdiction to hear cases (i) regarding civil and commercial disputes that are not subject to the jurisdiction of the Dutch court in first instance (‘kantonrechtbank’) or the exclusive jurisdiction of another court, (ii) cases with ‘international elements’ and (iii) where the parties have explicitly opted for the jurisdiction of the NCC.

See professor Rank’s blog. Since January 1, 2016, Specific Procedural Rules are in place in Rotterdam when parties opt for conducting international sales and maritime cases in the English language before the District Court in Rotterdam.

For parties the gateway to the NCC is rather narrow, compared to other international commercial courts. In cases in which English law applies, parties can go to a special London court even before the legal conflict breaks out in all its glory. Moreover, not many international parties opt for the applicability of Dutch law or to have their dispute decided by Dutch courts. They may prefer arbitration; the recognition of an arbitral reward is supported by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Convention applies to the recognition and enforcement of foreign arbitral awards and the referral by a court to arbitration via which the award can be recognised in over 150 states. The European recognition framework only applies to 28 Member States. If disputes relate to parties in the USA, Argentina, South Africa or Singapore, recognition and enforcement of civil or commercial judgments is very often, if at all possible, a slow and cumbersome process. Also, compared to the Singapore experience, the NCC is closely determined by Dutch procedural rules (no exclusions allowed) and by Dutch judges, whilst for instance in an international pre-insolvency restructuring dispute it may be wise to involve a non-Dutch judge. We await to see whether the NCC will be as successful as predicted. For a few months already, the website has stated ‘launching soon’.

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