Earlier this week, the proposal to establish a commercial court passed in parliament. The commercial court will be called the Netherlands Commercial Court (NCC). It will sit in Amsterdam and will make use of state of the art facilities.

What is it?

The NCC is a specialized commercial court and has a pool of highly skilled judges with vast experience in the adjudication of commercial disputes who have been selected for the NCC. The NCC will hear cases with three judges, except for summary proceedings in the first instance (where one judge will hear and decide). The proceedings will be conducted in English. The judgment will be in English and there will be tailor-made case management. The efficient and effective rules of Dutch civil procedure will apply. The NCC will be able to handle commercial contract claims, corporate litigation matters (except for matters that fall in the exclusive jurisdiction of the Enterprise Chamber) and commercial tort matters (such as cartel damages cases). The NCC will also be able to give an injunction or other decision in summary proceedings.

There will be a first instance court and a court of appeal, the Netherlands Commercial Court of Appeal ("NCCA"). Parties to the proceedings may file an appeal with the Supreme Court ("SC") on matters of law. The proceedings before the SC will be in Dutch, but the SC has agreed to accept the papers of the proceedings in the lower courts in English, including the judgment or judgments that are the subject of the SC appeal.

Why use it?

Use of the NCC should be considered in commercial contracts or in commercial disputes if:

  • You are looking for a high quality, independent bench and efficient proceedings. The Dutch judiciary is consistently ranked in the top 5 of the World Justice Project Rule of Law Index, above for instance the UK, Germany and France. Dutch civil procedure is generally relatively swift and the NCC will manage cases efficiently, resulting in prompt and high quality justice.
  • Enforcement does not need to take place outside of the EU or the member states to the Lugano Convention (Iceland, Norway and Switzerland). In the EU, judgments from other member states are even readily enforceable, without the need for separate proceedings for recognition and enforcement in those other member states. This may be an advantage over arbitration, where proceedings for recognition and enforcement under the New York Convention are frequently bogged down.
  • Confidentiality is not an overriding consideration for choice of forum. The NCC proceedings will be public as a matter of principle, bar exceptions where the protection of business secrets requires confidentiality of the proceedings. The judgment will be public in any case. If confidentiality matters, arbitration will be the better option.
  • You are looking for a more cost-efficient option than arbitration. The NCC will offer at least the same quality as international arbitration, but the cost will be less. Court fees will be € 15,000 for the first instance and € 20,000 for the appeal. This is considerably less than the administration cost in arbitration and the arbitrators' fees. Adverse cost orders will also be considerably lower than in arbitration. It is expected that the total cost of proceedings before the NCC will be a fifth of the cost of proceedings before the London Commercial Court and the Singapore International Court.
  • You want to keep the option of an appeal open, for instance if the case involves an undecided matter of law. Arbitration does generally not offer the possibility of an appeal, although it sometimes leads to protracted proceedings to set aside the arbitral award. The NCC does offer the possibility of an appeal.
       

How?

By an agreement in writing between the parties, either in their commercial contract or after the dispute arose, to:

  • Litigate before the courts in Amsterdam;
  • In English;
  • Before the NCC.

There must be an "express" agreement, which means that the forum clause cannot be included in general terms and conditions.

The dispute must be 'international', but this is an easy hurdle to pass. If for instance, the dispute arises from an agreement in another language than Dutch, this requirement is already met.

When?

The 'NCC Act' will enter into force on a date that the Minister of Justice must now set. This will in all likelihood be either 1 January 2019 or 1 July 2019.

We consider 1 July 2019 more likely. That will give you time to consider the NCC as an option. If you should like to receive our draft model clause for the NCC, with drafting notes, please register here.

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