Legislative proposal to modernise Dutch arbitration law

Today the legislative proposal for the modernisation of Dutch arbitration law has been submitted to the Dutch Parliament. An informal English translation of the comparison between the legislative proposal and the current Dutch arbitration law can be found here.

The modernisation of Dutch arbitration law will impact on drafting arbitration clauses. Here you can register for our breakfast seminar “Drafting arbitration clauses under the revised arbitration law” held on 20 June 2013 between 9.00 and 10.00 am at Linklaters Amsterdam, Zuidplein 180.

What is the timing of the new Dutch arbitration law?

It is anticipated that the Second Chamber of Dutch Parliament will submit its report on the legislative proposal before summer and that the debate on this proposal will take place in the Second Chamber at the end of 2013/early 2014.

Key amendments

Important proposed amendments relate to, e.g.:

The length of annulment proceedings

The court of appeal – rather than the district court – will have jurisdiction over annulments of arbitral awards. This aims to limit the time and costs that parties may spend in annulment proceedings after having completed arbitration proceedings. Parties may agree to exclude appeal at the Supreme Court against a judgment of the court of appeal.

The proposal also introduces the possibility for the court appeal to suspend the annulment proceedings and remit the matter to the consideration of the arbitral tribunal by reopening the arbitral procedure or taking other measures.

Revival of the jurisdiction of the state court

In case of the annulment of an arbitral award, the jurisdiction of the state court will only revive in case the arbitral award has been annulled on the basis of lack of a valid arbitration agreement, unless the parties have agreed otherwise.

Parties may opt for institutional challenge proceedings

Parties will have the option to appoint an independent third party that will be competent to decide on a challenge of an arbitrators. Thus, parties may elect to submit challenge proceedings to an arbitral institute.

Assistance of the Dutch state court in foreign arbitration proceedings

A party will be able to request the assistance of a Dutch state court with respect to foreign arbitration proceedings (i.e. arbitration proceedings seated outside the Netherlands).

In this respect it is noted that the proposal does not distinguish domestic arbitration from international arbitration, which distinction is based on the parties’ places of residence. Such distinction would not fit into the existing Dutch arbitration law’s one-tier system in which it is irrelevant whether the parties reside in or outside the Netherlands.

Provisional measures in (separate) arbitration proceedings

The proposal also includes the introduction of the possibility for a party to request provisional measures in pending arbitral procedures, which possibility is a supplement to the current option for parties to authorize arbitral tribunals to render awards in interim injunction proceedings. Parties may exclude this authority of the tribunal.

Moreover, parties may agree to give a separate arbitral tribunal the authority to act as emergency arbitrators. A party may request the emergency arbitrators for provisional measures, while it is not required that an arbitral procedure on the merits is pending. Decisions rendered as a result of a request for a provisional ruling by such arbitrators will qualify as an arbitral award.

Larger power of the parties to shape the arbitration procedure

Overall, it is noteworthy that the proposed reforms provide parties with broader possibilities to derogate by contract from the arbitration law in the DCCP, resulting in larger power to the parties to shape the arbitration procedure as they wish. This may also make it more attractive for parties to agree on instituting arbitration in the Netherlands.

Parties may, for example, agree:

  • on an arrangement in relation to the rules of evidence;
  • on the possibility of an arbitral appeal against an arbitral award;
  • to waive the right to appeal in cassation in annulment proceedings;
  • to deviate from the quorum that arbitrators shall meet to render a decision;
  • to exclude the possibility for an oral explanation by the parties to the arbitral tribunal;
  • to exclude the authority of the arbitral tribunal to (i) order the appearance of a witness or expert, (ii) to render an interim measure or (iii) to order for a discovery of records by a party and (iv) the option for a third party to join or intervene in the arbitral proceedings.

Proposed revision aims to modernise the current Dutch arbitration

The Netherlands has been in the forefront of international arbitration for the last two centuries. It became the home of inter alia the Permanent Court of Arbitration, the Iran-US Claims Tribunal, P.R.I.M.E. Finance, the Netherlands Arbitration Institute (“NAI”) and numerous other private arbitration institutions.

The current 1986 Dutch arbitration law was one of the most modern national arbitration laws of its time, aiming to facilitate international harmonisation and unification of arbitration law to make arbitration in the Netherlands both nationally and internationally attractive. Upon adoption of the proposed revision, the act will be aligned with the revised UNCITRAL Model Law of 2006. Since developments in the field of arbitration have been significant during the last several years, the proposal reflects the Dutch ambition and ability to keep in step with those developments and to retain its position as an attractive venue for domestic and international arbitration.

For further information please contact Daniella Strik.