The Netherlands as a centre for international commercial dispute resolution?
The Netherlands Commercial Court is a new commercial court that will focus on the resolution of international commercial disputes between large companies and will be established in Amsterdam as from 1 January 2018.
In principle, pursuant to the Netherlands Code of Civil Procedure, civil proceedings before a Netherlands court are to be conducted in Dutch. However since 1 January 2016 litigants have been allowed to conduct civil proceedings in the area of maritime and transport law and the international sale of goods in English at the Rotterdam District Court. As of 1 January 2018 a similar facility will be available at the Amsterdam District Court and the Amsterdam Court of Appeal. A legislative proposal to provide for this will be submitted to Parliament soon. The idea behind these initiatives is to serve a public policy need by ensuring that the requisite expertise is available in the Netherlands for the resolution of complex commercial disputes and to enhance the position of the Netherlands as a centre for international commercial dispute resolution. The initiatives are in line with the ambition of the Netherlands government to make this country the legal capital of the world, with the city of The Hague already hosting the International Court of Justice, the International Criminal Court and, more recently, P.R.I.M.E. Finance, an institute providing dispute resolution services, including arbitration and mediation, with respect to complex financial transactions and products.
Organisation and set-up of the NCC
In Rotterdam the matters concerned are handled by a newly created and highly specialised chamber of the District Court. In Amsterdam the facility will be in the form of a newly established court: the Netherlands Commercial Court (NCC). The NCC will focus on the resolution of international commercial disputes between large companies, irrespective of whether they are established in the Netherlands or not. The NCC will be set up as a highly specialised court with dedicated judges who have ample experience in dealing with complex commercial matters. It is even being contemplated to have legal practitioners or experts from outside the legal profession appointed as judges in the NCC to stimulate an efficient and pragmatic approach to the matters at hand. The proceedings will be conducted in English, unless the parties have opted for Dutch as the language of the proceedings.
Competition with other courts
It is a basic rule of civil procedure that, in principle, parties are free to submit to the jurisdiction of a court of their choice or to opt for arbitration. That implies that currently the Netherlands judiciary must compete with courts in other countries or with international arbitrage. The Netherlands judiciary and the bar are of a high quality. In addition litigation in the Netherlands is relatively cheap. At present both maritime disputes and international commercial disputes are usually dealt with by the London courts or are settled via arbitration. An important factor in the preference for London courts is no doubt the use of the English language in the court proceedings. International companies conduct their business in English and day-to-day policymakers in such companies are often English speaking. Furthermore, the London courts have the relevant expertise and are able to provide a quick turnaround.
Positive effects on economy
The Netherlands government expects the establishment of these facilities to contribute to a stronger economy. Courts bring business. The Netherlands is well known for its open economy and financial stability, a competitive tax climate, a sophisticated infrastructure, stable industrial relations, a productive and well educated workforce and reliable IT facilities. The presence of an English speaking NCC may just be the trigger for an international corporation to decide to establish its European headquarters in the Netherlands.
Will it work?
The question is of course whether the facilities offered will be sufficiently attractive to make the Netherlands a centre for international commercial dispute resolution. A problem may be in the language skills of the judges and the complex Netherlands rules of civil procedure. Furthermore, it must be borne in mind that the Dutch language will remain mandatory for proceedings at the Netherlands Supreme Court. In the end it will all depend on market parties being prepared, or not, to submit to the jurisdiction of the NCC in their contracts or to bring a dispute to the NCC by mutual consent.
This blog is based on an article published by the author in Butterworths Journal of International Banking and Financial Law 2016, p. 439-440.