International

31-08-2017

Netherlands Commercial Court: litigation in the English language at the Dutch courts

Introduction

It is expected that the Dutch legislator will consider the draft legislation regarding the Netherlands Commercial Court (“NCC”) and the Netherlands Commercial Court of Appeal (“NCCA”) after the summer recess. The NCC will be a special chamber of the Amsterdam district court. The NCCA will be a chamber at the Amsterdam court of appeals. Litigation at the NCC and NCCA will in principle be in the English language. Assuming that the Dutch parliament and the senate approve the bill, the expectation is that the NCC can be operational in the course of 2018. Please find the draft legislation here (in Dutch).

Purpose of the NCC

There is a demand for dispute resolution in the English language in the Netherlands. English is widely used in international trade and drawing up contracts, as well as in correspondence between legal, fiscal and commercial advisers and their international clients. At the same time, the Dutch court system has an excellent reputation internationally. Dutch courts are known to be competent, efficient and reliable. With the draft legislation, the legislator is responding to market demands and is attempting to strengthen the competitive position of the Dutch courts and the Dutch market economy.

Main characteristics of the NCC procedure

  • The procedure will in principle be in the English language, meaning that all legal documents – e.g. a writ of summons, statement of defense etc. – will be in English, the court hearing will be in English and the court decision will be rendered in English.
  • An action may be brought before the NCC when (i) there is a civil of commercial matter within the autonomy of parties that is not subject to the jurisdiction of the Dutch cantonal court or the exclusive jurisdiction of another chamber or court, (ii) the matter has an “international aspect” and (iii) the parties have explicitly chosen to have the proceedings at the NCC.
    • There is no nationality requirement. This entails that the NCC may settle disputes between two Dutch parties, disputes between one Dutch party and one foreign party, but potentially also disputes between two foreign parties, as long as the case also has an “international aspect”. Such an international link can soon be present. An international aspect will for example be present if one of the parties is domiciled abroad, if foreign law is applicable, if the facts of the case involve some cross-border element, etcetera.
    • Parties may submit all kinds of commercial, civil cases to the NCC, such as contractual disputes – including claims regarding a breach of contract, rescission, termination and damages – and claims for unlawful acts.
    • The NCC’s jurisdiction will be based on consent. Parties must thus choose to submit their disputes to the competence of the NCC. This consent may be incorporated in for example a choice of forum in a contract, but parties can also at a later stage agree to litigate at the NCC.
  • The NCC will apply Dutch procedural law, including the Dutch code of civil procedure, and the substantive rules of Dutch private international law. The facts of the case – and potentially: the choice of law – will determine the law applicable to the substantive matter at hand.
  • The NCC will be a special chamber with dedicated judges who have the necessary expertise and experience in large commercial disputes and have active and passive knowledge of legal English.
  • There will be paperless litigation and legal documents can be submitted electronically.
  • The NCC and NCCA court fees will be higher than the court fees for regular Dutch court cases. However, these fees will still be low compared to, for example, the average arbitration costs. The fees for the NCC are currently envisaged to be EUR 15,000 for substantive proceedings and EUR 7,500 for summary proceedings. The fees for the NCCA are envisaged to be EUR 20,000 for substantive proceedings and EUR 10,000 for summary proceedings.
  • A possible appeal to a decision of the NCC will go to the NCCA. The NCAA procedure will be similar to the NCC procedure, with some exceptions. A decision by the NCCA may in principle be appealed at the Dutch Supreme Court level. However, the Dutch Supreme Court procedure will be in the Dutch language.
  • Summary proceedings will also be possible at both the NCC and NCCA level.
     

Comments

  • It is at this stage still uncertain how much support the draft legislation will receive in the Dutch parliament. The general expectation is that the legislation will receive sufficient support to become law.
  • Some possible advantages of the NCC compared to foreign courts/arbitration/normal courts: (i) use of the English language, (ii) specialized judges with experience with complex, international cases, (iii) use of the trusted, efficient Dutch court system, (iv) relatively short procedures, (v) evidence may in principle also be provided in Dutch, French and German, (vi) less risk of an order to pay the legal costs of the counterparty in case of loss due to Dutch procedural rules and (vii) the procedure will in principle be paperless (digitalization of the procedure).
  • If parties want to contract that the NCC – and NCCA – are competent to take on the matter, parties should not only choose the forum, but also explicitly choose to litigate in the English language. The NCC provides draft language for the forum choice, but it is advisable to verify with legal advisors whether the wording works.
  • Draft Rules of procedure for the NCC and the NCCA are available here (in English).
  • It should be noted that courts in the Netherlands already generally allow parties to provide exhibits in the English language and often allow parties to fully or partially conduct hearings in English. Moreover, the Rotterdam district court has a pilot which allows for certain cases – maritime, transportation and international trade cases – to be conducted in the English language. The decision by the Rotterdam district court are, however, still in the Dutch language. The draft NCC language is necessary for the courts to provide binding decisions in the English language.

 

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