English litigation at a new Commercial Court in Amsterdam

Alert, Aug. 23, 2017

English litigation at a new Commercial Court in Amsterdam

On July 17, 2017, the Netherlands Commercial Court Bill[1] (the “Bill”) was submitted to the Dutch Parliament. The Bill introduces a new international trade chamber (internationale handelskamer) of the Amsterdam District Court (Rechtbank Amsterdam) and the Amsterdam Court of Appeal (Gerechtshof Amsterdam), at which proceedings can be held exclusively in English for international matters.

The applicable chamber for such proceedings is the ‘Netherlands Commercial Court (“NCC”)’ with the ‘Netherlands Commercial Court of Appeal (“NCCA”)’ as appeals court, based in Amsterdam. The NCC and NCCA intend commencing operations as of January 1, 2018, subject to the prior approval and adoption of the Bill by the Lower and Upper Houses (Tweede Kamer en Eerste Kamer) of Parliament, which is considered likely, prior to January 1, 2018.

1.    Litigation in the English language

The NCC and the NCCA will apply Dutch procedural law when settling disputes, with English being the exclusive language of use. The NCC or the NCCA so provide a clear alternative to parties who wish to litigate exclusively in English and so obtain a judgment in English. Currently, as in most other jurisdictions, Dutch law stipulates that proceedings are conducted in the local (Dutch) language, with submission of documents in English at the sole discretion of the applicable court.

Parties must expressly elect to conduct proceedings in the English language at the NCC or NCCA in writing. Alternatively, such election can be made at the time a dispute arises. Often, so-called ‘general terms and conditions’ are used in commercial relationship in the Netherlands. The election can also be made in such conditions, provided the relevant counterparty expressly accepted the same.

Certain exceptions apply to the selection of English proceedings or judgments rendered in English, in particular where it concerns filings with a Dutch public register. E.g. in case of registration of a right in rem (registergoed), the relevant sections of a particular judgment must be made in the Dutch language in order to register the same with third party effect.

2.         The NCC and the NCCA

2.1.    Jurisdiction

With the introduction of the NCC and the NCCA, the Netherlands will offer international parties a forum with subject matter jurisdiction over commercial disputes including contract, tort, property law and company/corporate law disputes. The NCC and the NCCA will have jurisdiction over any such civil or commercial international matters, assuming the parties have designated the NCC or NCCA as the forum to hear the action, and the parties have expressly agreed that the proceedings will be in English. The NCC and/or NCCA will hear such matter if it is so competent in accordance with the Dutch rules of civil procedure. The Bill will in this respect not amend the regular competence rules. E.g. in case a party wishes to seize or attach (beslag) property located outside of Amsterdam, the relevant local court at which the property is located or to such other having venue, shall have jurisdiction and such proceedings cannot be heard by the NCC and therefore not be conducted in English.   

2.2.   Summary Proceedings at NCC

The Bill provides specific competence for injunctive relief by summary proceedings (voorlopige voorzieningen) at the NCC. In such case, the ‘Preliminary Relief Judge’, who is selected from the pool of judges at the NCC, will rule the matter in English and such proceeding will be conducted in English (assuming the parties made the referenced election). Note that if a party seeks to disclaim competence of such judge, this defense may be made in Dutch, with the rendering of a judgment to such defense in Dutch as well. 

2.3.   Arbitration

The NCCA has competence to hear and decide any legal action seeking to set aside arbitral awards rendered by a tribunal with Amsterdam venue (ressort) in English. The Amsterdam venue must in such case have been chosen at the time by the parties as the place of arbitration.

2.4.   International matter

The NCC or the NCCA will only have jurisdiction over a civil or commercial matter if such matter has an international aspect. A matter has an international aspect when:

  1. at least one of the parties to the proceedings is resident outside the Netherlands or is a company established abroad or incorporated under foreign law, or is a subsidiary of such company;
  2. a treaty or foreign law is applicable to the dispute or the dispute arises from an agreement prepared in a language other than Dutch;
  3. at least one of the parties to the proceedings is a company, or belongs to a group of companies, of which the majority of its worldwide employees work outside the Netherlands;
  4. at least one of the parties to the proceedings is a company, or belongs to a group of companies, of which more than one-half of the consolidated turnover is realized outside of the Netherlands;
  5. at least one of the parties to the proceedings is a company, or belongs to a group of companies, the securities of which are traded on a regulated market, as defined in the Dutch Financial Supervision Act (Wet op het financieel toezicht), outside the Netherlands;
  6. the dispute contains legal facts or legal acts outside the Netherlands; or
  7. the dispute otherwise involves a relevant cross-border interest.

2.5.   Exceptions

Exceptions to proceedings at the NCC in the English language are those where the sub-district sector court (kantonrechter), and the Supreme Court (Hoge Raad) have jurisdiction. The sub-district sector deals with all cases involving rents, lease, and employment matters. The Supreme Court will not take cases in English. Judgments of the Supreme Court are among other things intended to shape the development of the law and the legal uniformity and should be accessible and comprehensible to everyone in the Netherlands. The Supreme Court will take note of the English documents filed in the proceedings at the NCC and the NCCA. However, parties may be asked for a Dutch translation of the documents. The NCC and the NCCA should also submit preliminary question (“prejudiciële vragen”) to the Supreme Court in Dutch.

Finally, the NCC is not authorized to judge disputes which belong to the exclusive jurisdiction of another Dutch competent court, such as the Corporate Division of the Amsterdam Court of Appeal (Ondernemingskamer van het gerechtshof Amsterdam), the Patent Division of the Den Haag Court (Octrooikamer van de rechtbank Den Haag) or the Marine Division of the Rotterdam Court (Maritieme kamer van de rechtbank Rotterdam).

3.         Costs

The Bill provides amendments of the Dutch Civil Proceedings (Court Fees) Act (Wet griffierechten burgerlijke zaken) regarding the special filing fees for litigations before the NCC or the NCCA.

The NCC and the NCCA as part of the Dutch court system will require filing fees for proceedings. However, as settling complex international (commercial) disputes in the English language requires extra efforts of such courts, parties (plaintiffs and defendants) are expected to pay higher court fees. The Bill proposes a court fee for enterprises at the NCC in the amount of EUR 15.000 and at the NCCA in the amount of EUR 20.000. At this time, it is not yet certain whether the court fees will actually so be determined and an alternative method may be followed (e.g. court fees to be determined on the basis of the monetary amount of a claim).

In the event a party argues that the case should not be judged by the NCC or the NCCA, that party should pay, in principle, the regularly court fee. If this defense fails, the court fee will be increased in accordance with the court fee for the NCC or NCCA. If such defense succeeds, the case should be referred to another Dutch competent court and the excess amount paid will be settled or refunded.

4.         Comment

The NCC and the NCCA provide a clear alternative for parties who want to litigate in English concerning their civil or commercial international matters or disputes. Note that it is not a requirement to choose Dutch law as the governing law of a contract. The NCC or NCCA will have competence over the matter notwithstanding such choice of law, and will typically seek expert opinions on any governing foreign law in English, which they can assess as the proceedings are conducted in English.

Moreover, the new proceedings at the NCC or the NCCA are expected to be a clear alternative for parties who do not want to submit their matter to arbitration and so save time and costs.

QUESTIONS OR FURTHER INFORMATION

If you have any questions or appreciate receiving more information on this alert, please contact your regular contact at WLP-Law or any of the undersigned:

Neill André de la Porte at andredelaporte@wlp-law.com or at (31) 62611 2772.

Maarten van Buuren at vanbuuren@wlp-law.com or at (31) 65244 1991.

 

 

This alert is intended to highlight issues for general reference only. It is not comprehensive nor does it constitute legal, tax or financial advice. Any information contained herein is subject to change at our discretion. This information should not be relied upon in any specific factual or legal situation and does not cover all laws or regulations that may be applicable. You should seek professional advice before making use of any of the information. WLP-Law gives no warranty as to the accuracy or completeness of this information. No liability whatsoever is accepted by WLP-Law in this respect. This alert relates to Netherlands law only.

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[1] Kamerstukken II, 2016-2017, 34761, nr. 2.