On 1 January 2019 the long-awaited Netherlands Commercial Court (“NCC”) opened its doors. The NCC provides parties with the possibility to litigate international commercial disputes in English before a specialized commercial court. The NCC is part of the Dutch court system, which is widely considered as stable, reliable and cost-efficient. In this article we discuss the key features and benefits of the NCC.
About the NCC
The NCC is a fully-fledged commercial court that forms part of the courts in Amsterdam. The NCC consists of three chambers:
- The NCC District Court, that deals with proceedings in first instance;
- The NCC Court in Summary Proceedings (CSP), that deals with expedited proceedings such as interim measures; and
- The NCC Court of Appeal, that handles appeals of judgements by the NCC District Court and CSP.
Cases are heard in English by one or three Dutch judges with vast experience in complex international commercial litigation. This means that parties can not only profit from the benefits of the commercial court in first instance proceedings, but also in summary proceedings and appeal cases. Judgements from the NCC Court of Appeal can, moreover, be appealed to the Dutch Supreme Court. Choosing for the NCC thus provides parties with full access to the remedies available in the Dutch court system.
Type of cases that are dealt with by the NCC
The NCC has been initiated to deal with complex international commercial disputes. Only cases that meet certain requirements can therefore be brought before the NCC.
The first requirement is that the action is a civil or commercial matter. Cases that are subject to the exclusive jurisdiction of the sub-district court or another Dutch chamber or court (e.g. the Patent Chamber) cannot be submitted to the NCC.
The case further has to qualify as an international dispute. This does not mean that a dispute can only be submitted to the NCC if one of the parties is established outside the Netherlands. Disputes typically also qualify as international if, for example:
- foreign law is applicable or the dispute arises from an agreement in a language other than Dutch;
- one of the parties is a company, or belongs to a group of companies, of which the majority of the employees work outside the Netherlands or of which more than one-half of the consolidated turnover is realized outside the Netherlands;
- the dispute involves legal facts or acts outside the Netherlands; and/or
- the disputes otherwise involves a relevant cross border interest.
Last, but not least, the Court of Amsterdam must be competent to hear the case and the parties must have expressly agreed in writing for proceedings to be before the NCC and in English, either before or after the dispute arose. The NCC has published a model clause that parties can use to express such agreement. It is important to note that tacit acceptance of terms and conditions does not satisfy this requirement.
Procedure and costs
The NCC applies Dutch procedural law and the NCC Rules of Procedure, which outline the main procedure and practice rules. One of the major advantages of the NCC is that cases are, in principle, conducted entirely in English. An important difference with certain other international courts is that also the judgement itself is rendered in English.
The proceedings before the NCC are straight-forward, but can be adjusted to meet the needs of the parties in a particular case. Typically, the proceedings start with a written round. After this first written round, a case management conference or motion hearing can take place to discuss procedural or other matters. The court will subsequently decide on the motions made and may take testimony, appoint an expert or allow the parties to submit further written statements. The next step is normally that a hearing is held. After this hearing the court will render a judgement. This can be a final judgement or an interim judgement in which the next steps for the proceedings are determined.
The NCC charges an upfront flat fee depending on where the action is initiated (the NCC District Court, CSP or Court of Appeal). This fee is not related to the subject matter of the case or the value of the claim. This has a benefit that the costs of litigation before the NCC are generally much lower than in arbitration. The flat fee for a case on the merits before the NCC District Court is, for example, EUR15.000 per party and the flat fee for summary proceedings EUR7.500 per party. These amounts are somewhat higher than the fees for proceedings before the regular Dutch courts.
While the losing party generally has to bear the legal fees of the other party, the Dutch courts will furthermore - as a rule - only award a liquidated amount to cover such fees. In most cases this amount is much lower than the actual fees incurred. This means that proceedings before the NCC are less risky than in, for example, arbitration.
The NCC as a suitable alternative for other dispute resolution mechanisms
In our view the NCC provides parties with a promising alternative for not only national courts, but also arbitration and other commercial courts, in particular in cases where enforcement is not an issue. Proceedings can be conducted in English before a specialized commercial court that is part of the stable and reliable Dutch court system, against costs that are much lower than in international arbitration. The applicable rules further provide the NCC with the possibility to keep the proceedings straight-forward, but to customize them if the litigation at hand requires so.
Would you like to learn more about litigation before the NCC or about how you can best choose for jurisdiction of the NCC in your commercial contracts? Feel free to contact Veerle van Druenen & Samantha d’Azevedo.
