International Arbitration In The Netherlands

The 2015 Dutch Arbitration Act (the “Dutch Arbitration Act”) governs international arbitration in the Netherlands ( please find the original in Dutch, as well as an  unofficial English translation).

The Dutch Arbitration Act amended  Book Four of the Dutch Code of Civil Procedure (“DCCP”) ( an English version of Book Four of the DCCP is available here), as had been  previously in force since 1986, and certain provisions of Book 3 (Article 3:316 and Article 3:319), Book 6 (Article 6:236) and Book 10 (adding a new Title 16 (Arbitration), Articles 10:166-10:167) of the Dutch Civil Code (“DCC”) ( available here).

Scope and Structure of the Dutch Arbitration Act

The Dutch Arbitration Act, pursuant to its Article IV, applies to arbitrations initiated on or after 1 January 2015.

In terms of structure,  Book Four of the DCCP consists of two Titles (based on whether the  seat of arbitration is in or outside the Netherlands) and ten Sections, as follows:

Title One – Arbitration in the Netherlands

• Section One – Arbitration Agreement
• Section One A – Arbitration Agreement and Jurisdiction of the Courts
• Section One B– Arbitral Tribunal
• Section Two – The Arbitral Proceedings
• Section Three – The Arbitral Award
• Section Three A – Arbitral Appeal
• Section Four – Enforcement of the Arbitral Award
• Section Five – Setting Aside and Revocation of the Arbitral Award
• Section Six – Arbitral Award on Agreed Terms
• Section Seven – Final Provisions

Title Two – Arbitration Outside the Netherlands

Unlike the arbitration laws of other popular arbitration jurisdictions, such as France, the Dutch Arbitration Act deliberately does not distinguish between domestic and international arbitrations (to prevent disputes about whether an arbitration qualifies as national or international).

While the Dutch Arbitration Act is not directly based on the  Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (“UNCITRAL Model Law”), it was influenced by it and aligns with certain aspects of it, but not all. For instance, as discussed below, the Dutch Arbitration Act does not provide a default number of arbitrators, unlike the  UNCITRAL Model Law (Article 10(2)), which provides for three arbitrators by default.

Arbitration Agreement

Validity – Applicable Law to the Arbitration Agreement

Under Article 10:166 of the DCC, which was introduced with the 2015 reform,an arbitration agreement is considered valid if it is valid under any of the following three laws: (i) the law chosen by the parties; or (ii) the law of the seat of the arbitration; or (iii) if the parties have not made a choice of law, under the law that is applicable to the legal relationship to which the arbitration agreement relates.

This provision is similar to Article 178(2) of the  Swiss Private International Law Act, which provides, “As regards its substance, an arbitration agreement is valid if it conforms either to the law chosen by the parties, to the law governing the subject-matter of the dispute, in particular the law governing the main contract, or to Swiss law.”

Form of the Arbitration Agreement

An arbitration clause must be evidenced in writing (DCCP, Article 1021).

An arbitration clause is typically included in a contract. However, Article 1020(5) of the DCCP provides that an arbitration clause included in binding articles of association or (corporate) rules also qualifies as an arbitration agreement.

Separability of the Arbitration Agreement

Article 1053 of the DCCP recognises the separability of the arbitration agreement from the contract in which it is contained (known as the separability doctrine).

Arbitral Tribunal

Jurisdiction of the Arbitral Tribunal

The arbitral tribunal is entitled to rule on its own jurisdiction, as provided in Article 1052(1) of the DCCP, which codifies the internationally recognised principle of competence-competence.

Constitution of the Arbitral Tribunal

As a starting point, the arbitral tribunal will be appointed in the manner agreed by the parties (DCCP, Article 1027(1)).

If no method of appointment of the arbitrator(s) was agreed between the parties, the default method, under Article 1027(1) of the DCCP, is that the parties shall jointly appoint the arbitrator(s).

The appointment must be made within three months after the commencement of the arbitration, unless otherwise agreed by the parties (Article 1027(2) DCCP).

Interestingly, the Dutch Arbitration Act allows for the constitution of an arbitral tribunal even before it is determined that the seat is in the Netherlands. Under Article 1073(2) of the DCCP, if the parties have not determined the seat of the arbitration, the arbitrator(s) (and the secretary to the tribunal) may be appointed (and challenged) in accordance with Articles 1023-1035(a) of the DCCP, if at least one of the parties is domiciled or has an actual residence in the Netherlands.

Number of Arbitrators

The Dutch Arbitration Act does not provide for a default number of arbitrators if the parties have not agreed on a number, unlike other popular arbitration laws, such as the  1996 English Arbitration Act (Section 15(3)), which provides for a sole arbitrator by default or the  UNCITRAL Model Law (Article 10(2)), which provides for three arbitrators by default.

Pursuant to Article 1026(2) of the DCCP, if the Parties fail to agree on the number of arbitrators, the number shall be determined by the provisional relief judge of the district court.

In practice, this provision would be displaced by the agreement of the parties to subject their arbitration to a set of (institutional or ad hoc) arbitration rules, which routinely contain provisions on the default number of arbitrators (see, e.g., Article 5.8 of the  2020 LCIA Arbitration Rules, under which the default number of arbitrators is a sole arbitrator; under Article 6.1 of the  2018 HKIAC Arbitration Rules, the decision is left to the HKIAC to decide on a sole arbitrator or three arbitrators, “taking into account the circumstances of the case.”).

Arbitral Proceedings

Fundamental Principles

Article 1036 of the DCCP contains four fundamental due process principles that govern the arbitral proceedings:

1. the arbitral proceedings are conducted in the manner agreed by the parties, without prejudice to any mandatory provisions of the Dutch Arbitration Act (paragraph 1);
2. the equal treatment of the parties (paragraph 2);
3. the parties' right to be heard (paragraph 2);
4. the tribunal shall ensure that the proceedings are conducted without undue delay, and the parties have a mutual obligation towards each other to prevent any undue delay (paragraph 3).

Confidentiality

The Dutch Arbitration Act is silent on the issue of confidentiality. Arbitrations seated in the Netherlands are, nevertheless, generally confidential, as a principle of unwritten Dutch arbitration law (A. Marsman, International Arbitration in the Netherlands  (2021), ¶ 13-002).

Notably, in the context of the recent reform of the  1996 English Arbitration Act, which is also silent on the issue of confidentiality, the Law Commission of England and Wales decided against adding a statutory rule on confidentiality, reasoning that there is no one-size-fits-all when it comes to confidentiality, so it would arguably not be sufficiently comprehensive, nuanced or practical to codify a duty of confidentiality (see further  Reform of the 1996 English Arbitration Act).

A duty of confidentiality may typically arise from the following sources:

• First, the applicable arbitration rules may contain provisions on confidentiality. For instance, LCIA arbitrations are confidential by default, under Article 30 of the  2020 LCIA Arbitration Rules (arbitrations are not by default confidential under the  2021 ICC Arbitration Rules, however, which leaves the issue of confidentiality to the will of the parties and the arbitral tribunal).
• Second, parties may also agree to make the arbitral proceedings confidential.
• Third, absent an agreement between the parties, the arbitral tribunal can also decide on confidentiality in a procedural order, taking into account the circumstances of the case. The arbitral tribunal can also delineate the scope of confidentiality (confidentiality can cover, for instance, written submissions, documentary evidence, procedural orders, hearings and awards).

Arbitrability of Disputes

Article 1020(3) of the DCCP provides, in a general manner, that the arbitration agreement shall not serve to determine legal consequences that may not be freely determined by the parties. However, the provision does not specify the types of disputes that are non-arbitrable. Due to public policy considerations, disputes related to family law (divorce or guardianship) and bankruptcy are typically entrusted to state courts.

Multi-Party Arbitrations

Articles 1045 and 1046 of the DCCP offer procedural mechanisms that enable the involvement of third parties in arbitration proceedings.  By addressing related claims and parties together within the same arbitral process, this allows for a more comprehensive, efficient, and likely cost-effective resolution of disputes.

Joinder and Intervention

First, under Article 1045(1) of the DCCP, the arbitral tribunal may allow a third party who has an interest in the arbitral proceedings to participate as a party (joinder) or intervenor (intervention), upon the third party's written request and provided that the same arbitration agreement as between the original parties applies or has entered into force between the parties and the third party.

Joinder refers to the situation where a third party seeks to support the position of one of the existing parties in the dispute (for instance, the third shareholder in a three-party joint venture may join an arbitration initiated between two shareholders to support one of them).

Intervention, by contrast, refers to the situation where a third party seeks to submit a claim against one or more of the existing parties to the arbitration (for instance, a third party may seek to intervene to claim title to certain goods against either or both of the parties to an arbitration).

Impleader

Second, under Article 1045a(1) of the DCCP, at the written request of a party, the arbitral tribunal may allow that party to implead a third person, provided that the same arbitration agreement as between the original parties applies or enters into force between the interested party and the third person. For instance, a contractor held liable by an employer may seek to implead the subcontractor who performed the actual work for the employer.

Consolidation

Third, Article 1046(1) of the DCCP allows the consolidation of arbitrations. In particular, if arbitral proceedings are pending in the Netherlands, a party may request that a third person designated to that end by the parties order consolidation with other arbitral proceedings pending within or outside the Netherlands, unless the parties have agreed otherwise. In the absence of a third person designated to that end, the provisional relief judge of the Amsterdam district court may be requested to order consolidation.

Consolidation may be ordered insofar as it does not cause unreasonable delay in the pending proceedings, also in view of the stage they have reached, and the arbitral proceedings are so closely connected that good administration of justice renders it expedient to hear and determine them together to avoid the risk of irreconcilable decisions resulting from separate proceedings, as Article 1046(2) of the DCCP specifies.

Arbitral Award

The Dutch Arbitration Act does not prescribe a time limit within which the tribunal must render its final award. Instead, Article 1048 of the DCCP leaves the determination of the date on which the award will be made at the exclusive discretion of the arbitral tribunal.

Other leading arbitration laws (such as the  1996 English Arbitration Act) and arbitration rules (such as the  2020 LCIA Arbitration Rules and the  2021 ICC Arbitration Rules) are also silent on the time limit within which the arbitrators must make their final award, leaving the matter to the arbitrators' discretion.

Arbitral Appeal

Section Three A, Article 1061a to Article 1061l, of the DCCP governs the issue of arbitral appeals.

Arbitral appeals are generally not allowed in arbitrations. The absence of a second round of proceedings is also one of the compelling reasons (aside from the enforceability of the resulting awards) that parties choose to opt for arbitration in the first place, instead of court litigation, where a decision of a court of first instance can typically be appealed before an appellate court (on a point of fact or law) and then before the Supreme Court (on a point of law).

Under Article 1061b of the DCCP, parties may explicitly agree to permit arbitral appeals, and this agreement shall be evidenced in writing.

Section Three A of the DCCP contains limited provisions regarding the actual conduct of the arbitral appeal proceedings, which is left to be determined by the parties. For instance, the parties are free to determine the scope of the appeal. The parties are also free to agree on the composition of the arbitral appeal tribunal (DCCP, Article 1026(1)).

Arbitral appeals may be instituted against a final award and a last partial final award (Article 1061d(1)) or other partial final awards, unless the parties have agreed otherwise Article 1061d(2)).

Unless the parties have agreed otherwise, under Article 1061c of the DCCP, an arbitral appeal must be lodged within three months after the award has been dispatched to the parties.

Unless the law or the nature of the case requires otherwise, the arbitral tribunal at first instance may, if this is claimed, declare that its award shall be immediately enforceable notwithstanding the arbitral appeal (DCCP, Article 1061i(1)).

The arbitral appeal results in an appellate arbitral award, which either confirms or revokes the first instance arbitral award (DCCP, Article 1061j and Article 1061k).

Due to the time, cost and effort needed for arbitral appeals, parties are generally advised against agreeing on arbitral appeals.

Annulment and Revocation of an Arbitral Award

An arbitral award may be set aside for the limited grounds set out in Article 1065(1) of the DCCP:

1. if there is no valid arbitration agreement;
2. if the arbitral tribunal has been constituted in violation of the applicable rules;
3. if the arbitral tribunal has not complied with its instructions;
4. if the judgment has not been signed in accordance with the provisions of Article 1057 (which provide that the award shall be in writing and signed by the arbitrator(s)) or has not been substantiated;
5. if the judgment, or the manner in which it was arrived at, is contrary to public order.

The annulment application must generally be made within three months from the date the award is dispatched to the parties (DCCP, Article 1064a(2)).

Furthermore, Article 1068(1) of the DCCP sets out the exhaustive grounds based on which an arbitral award may be revoked, i.e.:

1. if it is wholly or partially based on fraud committed in the arbitration; or
2. if it is wholly or partially based on documents which, after the award was made, are discovered to have been forged; or
3. if, after the award was made, a party obtains documents that would have had an influence on the decision of the arbitral tribunal and which were withheld as a result of the acts of the other party.

A claim for revocation shall be brought within three months after the fraud or forgery of documents becomes known or the party obtains the new documents (DCCP, Article 1068(2)).

A set-aside or revocation application does typically not suspend the enforcement of an award (DCCP, Article 1066(1) and 1068(2)). However, the court may, at the request of a party, and if there are grounds to do so, suspend enforcement until a final decision has been made on the set-aside or revocation application (DCCP, Article 1066(2) and Article 1068(2)).

Enforcement of an Arbitral Award

The Netherlands has been a party to the  1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) since 1964 (see  status here).

The limitation period applicable to the commencement of legal proceedings for recognition and enforcement of foreign arbitral awards is 20 years from the day following that of the decision or, if conditions have been set for its enforcement (the fulfilment of which does not depend on the will of the person who obtained the decision), from the day following that on which such conditions were fulfilled ( DCC, Article 3:324) (see further Limitation Periods for Enforcement of Foreign Arbitration Awards).

Investment Arbitration in the Netherlands

The Netherlands is frequently selected as a seat for investment arbitrations, likely due to the Permanent Court of Arbitration, headquartered in the Peace Palace in The Hague.

Notable examples of investment arbitrations seated in the Netherlands include the  Yukos arbitrations, which resulted in three parallel arbitral awards rendered in 2014, in favour of three major shareholders of Yukos, ordering Russia to pay the unprecedented amount of circa USD 50 billion in compensation for forcing Yukos into bankruptcy and expropriating the claimants' interests in the company. Dutch courts also played a crucial role in these proceedings, as Russia challenged the tribunals' jurisdiction before them. The District Court of The Hague initially ruled in favour of Russia, but the Court of Appeal of The Hague later overturned this decision, reinstating all three arbitral awards (see, e.g., The Hague Court of Appeal, Veteran Petroleum Limited et al. v The Russian Federation, 18 February 2020, ECLI:NL:GHDHA:2020:234, TvA 2020/31, available  here in Dutch).

The Netherlands is also a party to the  1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which facilitates the resolution of disputes between States and foreign investors (see also ICSID Arbitration; The New ICSID Arbitration Rules).

The Netherlands is also a party to several bilateral investment treaties (“BITs”). Following the  Achmea judgment of the European Court of Justice, however (which ruled that investor-state arbitration clauses in BITs between EU Member States are incompatible with EU law), the Netherlands, along with other EU Member States, signed an  agreement to terminate intra-EU BITs (see further  Intra-EU Investment Arbitration After Achmea).

Dutch-Based Arbitration Institutions

The leading international arbitral institutions seated in the Netherlands are:

1. the Permanent Court of Arbitration (“PCA”), established in 1899, which has its own  2012 PCA Arbitration Rules;
2. the Netherlands Arbitration Institute (“NAI”), founded in 1949, which also has its own recently revised  2024 NAI Arbitration Rules;
3. the Panel of Recognised International Market Experts in Finance (“P.R.I.M.E. Finance”), established in 2012, which also recently launched its  revised P.R.I.M.E. Finance Arbitration Rules (see our commentary on the  2022 Revised P.R.I.M.E Finance Arbitration Rules).

In sum, international arbitration in the Netherlands, especially after its  2015 reform, presents a robust framework for resolving disputes efficiently and effectively. With established arbitration institutions and a supportive legal environment, the Netherlands is a compelling seat for international commercial and investment arbitrations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.