Sep 2019

The Netherlands Commercial Court: Litigation in a Global Age

Efficient and speedy resolution of disputes in English is the future of international commercial litigation.  In a truly global age, international business cannot be burdened with inefficient and costly litigation.  The Netherlands Commercial Court (NCC) is a specialized commercial court, opened on January 1, 2019 (post-Brexit), to provide an English language forum located in Amsterdam for the speedy disposition of disputes with an international element.

The NCC consists of the NCC District Court, NCC District Court in Summary Proceeding and the NCC Court of Appeal.  All three chambers are within the Amsterdam Courts.  Proceedings and submissions are in English.  Matters in the NCC District Court are heard by a three-judge panel while the NCC in Summary Proceeding is heard by a single judge.  The judges are selected based on their fluency in English and specialized knowledge of commercial and civil disputes.  All judgments are in English.

Why the Netherlands?  The World Justice Project ranks the Netherlands courts an overall 5th out of 126 in various categories including, absence of corruption, right to information, equal treatment, due process, and efficiency.  In comparison, the United States ranks 20th.  The Netherlands courts boast an astounding efficiency in delivering disposition of civil matters in an average of 130 days, measured from the first notice of appearance to the final judgment.  This stands in stark contrast to matters in the United States that typically drag on for months, if not years.  At the same time, the NCC applies comprehensive and active case management.  The timeline for each matter is decided on an individual basis.

The NCC rules of procedure set an efficient tone from the outset by requiring the initial pleading to set out the facts and theories of law supporting the claim(s) but also the anticipated defenses of the other party with a response to each such defense.  All available exhibits are to be included in the initial pleading.  The other party’s initial pleading must contain their defenses, witnesses and exhibits.  The NCC may order either party to supply any missing elements.  The pleadings have a similar effect to the Rule 26 Disclosures of the U.S. federal courts.  However, the NCC procedure is to compel those disclosures with the initial pleadings rather than waiting for the early stages of litigation after issue has been joined.

The NCC fees range between 7,500€ – 20,000€ per party.  The loser typically pays the costs of the other party.  Attorney fees are also shifted to the loser.  Only that portion of the fees related to a specific process like a motion or a court appearance, ranging from 1,000€ – 12,000€ per process, are shifted.  However, the parties can agree to allocate costs and fees differently.

The NCC maintains a digital portal through which all communications with the court and pleadings are filed.  It is like the electronic filing systems found in the U.S. federal and state courts.  Matters are conducted in person, via video conference, conference call or other type of remote participation in keeping with global best practices.

The jurisdiction of the NCC is civil or commercial cases with the consent of the parties.  The case must have an international element; for example, where one party is from a jurisdiction other than the Netherlands, where one party is incorporated under foreign law, or where a convention or foreign law applies to the dispute.

Mutual consent to jurisdiction must be by specific agreement and cannot be contained in a general terms and conditions section of a contract.  The consent agreement on jurisdiction can be reached before or after the dispute arises.  The NCC proposes the following model language:

All disputes arising out of or in connection with this agreement will be resolved by the Amsterdam District Court following proceedings in English before the Chamber for International Commercial Matters (“Netherlands Commercial Court” or “NCC District Court”) to the exclusion of the jurisdiction of any other courts.  An action for interim measures, including protective measures, available under Dutch law may be brought in the NCC’s Court of Summary Proceeding (“CSP”) in proceedings in English.  Any appeals against NCC or CSP judgments will be submitted to the Amsterdam Court of Appeal’s Chamber for International Commercial Matters (“Netherlands Commercial Court of Appeal” or “NCAA”).

The final judgment is in English.  It is enforceable in the Kingdom of the Netherlands (Netherlands, Aruba, Bonaire, Curacao, St. Martin, St. Eustace and Saba) and the EU.  It is also enforceable pursuant to various conventions including the Lugano Convention and the 2005 Hague Convention on Choice of Court Agreements.

The future of international commercial litigation will see more of these specialized courts with streamlined procedures.  The NCC is such a forum located in the gateway to Europe.  Clients engaged in international commerce would do well to consider the NCC in their choice of forum agreements.