After the summer the hour has come. The Netherlands Commercial Court (“NCC”) is expected to open its doors at the IJdok in Amsterdam. In September 2015, the Dutch Council for the Judiciary announced the arrival of the NCC as a specialised (three-judge) commercial chamber of the Court of Amsterdam and the Amsterdam Court of Appeal[1], which will hear international commercial disputes in the English language for parties who have explicitly so agreed.
The NCC stems from the observation that the Dutch judiciary is resolving less and less large, complex international commercial disputes involving Dutch parties. Increasingly, Dutch parties operating internationally tend to opt for foreign commercial courts or arbitration institutes in their choice of forum clauses. Unlike the countries surrounding us, the Netherlands does not have specific commercial courts that deal exclusively with disputes in the field of commercial law.
In the opinion of the Minister of Justice and the Council for the Judiciary, the NCC is not only a necessity to improve the Dutch competitive position, but also to improve conditions for establishing businesses and entrepreneurship in the Netherlands.[2] The Minister assumes that ‘the NCC will be able to contribute towards lower costs for Dutch businesses that will then less often be forced to litigate in other, mainly expensive Anglo-Saxon countries, towards faster economic procedures as a result of shorter turnaround times, and towards a larger turnover of the high-quality Dutch legal profession.’[3]
Features of the NCC
The establishment of the NCC requires an amendment of the law that will make it possible to litigate in English and to charge higher court fees in order to make the NCC self-financing.[4] The bill concerned still needs to be adopted by the Dutch Senate.
NCC Rules of Procedure (“NCCR”) have already been drawn up and were still polished following an informal consultation phase.[5] From those documents and from the presentation about the NCC that the Council for the Judiciary posted on its website, we can gather the following distinctive features of the NCC proceedings:
- Cases are heard by a panel of three judges who are experienced in hearing complex international commercial matters.
- Proceedings are fully conducted in English.
- There is room for customisation in proceedings, for example where the law of evidence is concerned.
- The NCC applies an efficient and digital procedure, using modern means of communication and with an eye for international legal practice.
- Enforcement in the European Union is possible without further permission.
Below, the main unique selling points of the NCC will be discussed in more detail.
Experienced Judges
For the NCC a special group of judges is selected, who have extensive experience with complex international disputes. The NCC is designed to always act as a three-judge chamber in order to guarantee the highest quality. Positions in the NCC will be filled from the existing ranks of the Dutch judiciary. For the moment, six part-time judges have been selected for the NCC and four justices have been selected for the Netherlands Commercial Court of Appeals (“NCCA”) in the initial phase.[6]
The bill sets out the competence of the NCC in Section 30r of the Dutch Code of Civil Procedure (“DCCP”) and Article 1.3 NCCR. A dispute must be international. To assess whether this is the case, the internationality requirement in international private law can be used. In brief, a dispute is international if it has reference points to more than one legal system. A dispute will only be an internal dispute if all relevant reference points refer to one country. Eventually, the reference points will be assessed at the discretion of the judge.[7]
For the time being, Subdistrict Court matters are explicitly excluded from the competence of the NCC.
English
English is the language of communication in international commercial practice, both in large and small businesses. That is why parties prefer to resolve their disputes fully in English. Until now, parties that wish to litigate fully in English have to choose for either arbitration or a foreign, English-language regular court. The fees of attorneys and experts are relatively low in the Netherlands compared to countries like the United Kingdom or the United States. Therefore, it is the opinion of the legislator that the option of litigating in English will induce parties to choose the Dutch regular courts.[8]
At the NCC, proceedings are fully conducted in English: from case documents to hearings and judgments. Documents in Dutch, English or German will not be translated, except where the court directs otherwise. However, if parties wish to bring a case before the Dutch Supreme Court, litigation in English will not be possible.
Customisation
The NCC champions customised legal proceedings. This means that the NCC will establish the conditions for a good administration of justice on a case-by-case basis. A pre-trial hearing will often be held, at which the claims and further procedural steps are determined. Many decisions will be based on consultations with the litigants.
Dutch procedural law has been chosen as the starting point for the NCCR. For ‘ease of reference’ to Dutch procedural law, a number of relevant rules were fully or partially taken over. The NCCR applies in addition to, but not in replacement of the current rules of procedure.
Many additional options have been included in the NCCR in order to customise litigation to the wishes of parties. This has been done with an eye for international legal practice. However, the structure of these options is such that parties would do well to agree on the desired customisation as much as possible at the start of their legal relationship (in the dispute resolution clause).
These are examples of the options the NCCR offers:
- make audio or video recordings of a hearing (Article 7.7.3 NCCR);
- instructing a court reporter to prepare a transcript of the hearing (Article 7.7.4 NCCR);
- chamber deciding on the non-disclosure of documents (Article 8.4.2 NCCR);
- choosing a different assessment of evidence than the Dutch law of evidence (Article 8.3 NCCR);
- requesting a written statement prior to the hearing of witnesses (Article 8.5.2 NCCR).
As mentioned above, Dutch civil procedural law, which also includes the law of evidence, has been taken as the starting point for the NCCR. The Council for the Judiciary states explicitly that fishing expeditions will not be accepted. According to the Council, the options of gaining evidence and information have good and efficient safeguards, such as the provisional hearing of witnesses and the claim based on Section 843a DCCP.
However, the Dutch law of evidence deviates from the prevailing international rules of evidence, as set out in the IBA Rules on Taking of Evidence in International Arbitration. If the parties in an action wish to make the IBA Rules apply, they can arrange this in the choice of forum clause by opting for the NCC.
Digital
Proceedings before the NCC are in digital form due tothe Quality and Innovation Programme (Programma Kwaliteit en Innovatie, “KEI”) for procedural law. The system used, called eNCC, is based on the digital system that has now been in use for more than a year at the Supreme Court and the Administrative Law Division of the Council of State. This system does not follow the digitisation of the legal system known as IVO (previously known as KEI).
The eNCC is in its final (technical and functional) test phase, in which no appreciable problems have emerged.[9] eNCC is a portal for digital communication with the NCC for the submission of an initiating document, other case documents and exhibits, and digital messaging. Hearings may take place in a digital courtroom, with the option of using video conferencing for the pre-trial hearing or for remote attendance of the hearing.
Access to the NCC
Section 30r DCCP (bill NCC) and Article 1.3 NCCR prescribe that the choice of forum for NCC must be made “in a document”, i.e. in writing, and “explicitly”. This means that the parties have to set out the applicability of the NCC explicitly in a choice of forum clause. The tacit acceptance of an NCC clause (in general terms and conditions, for example) does not suffice. The choice to use the English language must also be made explicitly. A choice of forum for the NCC may also be agreed on after the arising of a dispute. The NCC can also be chosen as a forum for matters in which the court in preliminary relief proceedings is competent, such as preliminary relief proceedings, an application for a prejudgment attachment or an application for a cross-border European repossession. The NCCA can even set aside an arbitration award, provided that Amsterdam was chosen as the forum for arbitration.
Besides a choice for the NCC before the start of an action, an action may also be referred to the NCC by another Dutch court (see Article 1.3.1 under c (explanation), 4.1.5 and 10.1 NCCR). An explicit covenant is in place between the courts that parties will be informed of the option of going to the NCC.
Furthermore, to have access to the NCC parties should reckon with higher adjusted court fees and possibly with higher court orders to pay the costs of proceedings (compared to those of regular courts). The court fees for preliminary relief proceedings are 7,500 euro; in proceedings on the merits parties should count on 15,000 euro, and in appeal proceedings the court fees are 20,000 euro. In its order to pay the costs of the proceedings, the NCC will in principle follow the arrangement that was made between the parties (Article 10.2 NCCR). If there are no arrangements, the increased NCC court-approved scale of costs will apply (of 1,000 to 12,000 euro per point). The idea behind these increased court fees is that NCC proceedings should be self-financing as much as possible and should not reduce the budget of the regular judiciary.
Opportunities
The Council for the Judiciary expects that the NCC will try 125 cases per year in the long term. This may lead to an increase in turnover for specialist commercial lawyers of fifteen to thirty million euro per year.
In many cases, the interests of Dutch companies operating in an international context will also be served by a choice of forum for the NCC; after all, proceedings are reliable, innovative and (cost-)efficient. Those of you who already wish to advise clients to go to the NCC may find a template of an NCC clause in the NCCR on page 23, both in Dutch and in English.
[1] In this article, I will refer to both the first instance and the appeal facility jointly as “NCC”, while in practice the term “NCC” is also used for the first instance and “NCCA” for the appeal facility.
[2] Foundation plan, pp. 7-8
[3] Parliamentary Papers II 2015/2016, 21501-02, 1553, p.2
[4] The bill contains amendments to the Code of Civil Procedure and the Court Fees in Civil Matters Act.
[5] See: https://www.rechtspraak.nl/Sit...
[6] Senate, session year 2017-2018, 34761, B, Memorandum of Reply, pp. 8-9
[7] Senate, session year 2017-2018, 34761, B, Memorandum of Reply, pp. 2-3
[8] Senate, session year 2017-2018, 34761, B, Memorandum of Reply, p. 4
[9] Senate, session year 2017-2018, 34761, B, Memorandum of Reply, p. 1
