Commercialising Litigation: The Case of the Netherlands Commercial Court
The last few years have seen the rise of international commercial courts both in Europe and in Asia. Examples of these are the Netherlands Commercial Court, the Singapore International Commercial Court, the Dubai International Financial Centre Courts, and the China International Commercial Courts. International commercial courts have multiple innovative features, and were established with the aim of improving dispute resolution by offering parties specialised court proceedings tailored to the features of commercial disputes and litigants. In addition, competitive and economic considerations played a role in their establishment. In Europe, for instance, ‘Brexit’ accelerated the establishment of these courts, most of which have been inspired by the London Commercial Court and its popularity among commercial litigants.
In our paper, we focus on the Netherlands Commercial Court (NCC), which was created on 1 January 2019. Now four years later, we reiterate the rationale for establishing this court, discuss its key features, and evaluate its potential to become a strong force in the international dispute resolution market.
The NCC is an English-language court, set up as a chamber of the Amsterdam District Court. The NCC operates in accordance with the general rules of Dutch civil procedure coupled with the NCC Rules. While court specialisation and conducting part of the litigation in English are not new to the Dutch civil justice system, the NCC is innovative in tailoring the procedure to international commercial disputes and in conducting the entire proceedings in English. The NCC was created to strengthen the investment climate by facilitating business litigation and offering companies, especially small- and medium-sized enterprises, an affordable alternative to common law courts and to arbitration.
The NCC is complemented by the second instance Netherlands Commercial Court of Appeal (NCCA), which in a similar way was established as a specialised chamber of the Amsterdam Court of Appeal. Judges are drawn from the Dutch judiciary and selected on the basis of their extensive experience in international commercial dispute resolution and English-language skills. The Court has jurisdiction over civil and commercial disputes having a cross-border element. The NCCA also has competence in arbitration-related matters as long as the parties have expressly agreed to litigate in English before it and the arbitration is seated in Amsterdam. The NCC’s international jurisdiction is based primarily on choice of court agreements. A case may also be brought before the NCC if the Amsterdam District Court has jurisdiction on other grounds, provided that the parties have again expressly agreed to litigate in English and according to NCC Rules. The parties’ agreement ensures that they are aware of their choice to litigate in a foreign language and before a court whose fees are substantially higher than those applicable to the rest of the Dutch courts.
NCC(A) proceedings are governed by the Dutch rules of civil procedure. These can also be found in the NCC Rules, which in addition incorporate multiple novel features. In line with global best practices, for instance, the NCC conducts an early case management conference to identify the disputed issues. One of the NCC’s main innovations is the use of English as the court language. Unlike other international commercial courts in Europe, which permit the use of English only with respect to documentary evidence or oral submissions, the NCC uses English throughout court proceedings, including the pronouncement of the judgment. Supreme Court proceedings, however, are required to take place in Dutch. We argue that while the use of Dutch at the level of the highest court is sensible and beneficial for the development of the law, it may be a disadvantage for foreign litigants.
One of the features that has generated significant debate involves court fees. The NCC currently applies a flat fee amounting to €15,856 per party on first instance and €21,141 per party on appeal. These fees are substantially higher than those of ordinary Dutch courts and were introduced to ensure that parties themselves would shoulder the costs of complex and time-consuming litigation. While the NCC fees are lower than those of other international commercial courts and arbitration, concerns have been voiced that they are too high for smaller businesses wishing to access the NCC.
At the time of writing, the NCC had issued 13 judgments in 10 different cases. The majority of these were applications for interim measures decided by a single judge. Based on the statistical data published by the court, most of the cases involved at least one party established in the Netherlands. Thus far, the foreign parties appearing before the court were from common law jurisdictions, including the United States of America, the United Kingdom, and Ireland. Interestingly, the non-Dutch party in 31 percent of the cases was from the United Kingdom.
While NCC case law has been limited to date, users report positive experiences, and are pleased with the court’s expertise and speedy handling of cases. The NCC is building a solid reputation and is actively promoting itself to gain familiarity, but it will take time to attract a more significant number of cases. The pre-eminence of London as a dispute resolution hub is after all not attributed exclusively to the high quality of the London Commercial Court but also to the widespread use of English law in business contracts. Furthermore, while arbitration is expected to remain the parties’ prime choice, the recent Hague Choice of Court Convention and the Hague Judgements Convention will improve the recognition and enforcement of court judgements abroad, and thereby facilitate changes in the international dispute resolution market, in which the NCC may become one of the hubs.
Xandra Kramer is a Professor at the Erasmus University, Erasmus School of Law and at Utrecht University, the Faculty of Law.
Georgia Antonopoulou is an Assistant Professor at the University of Birmingham, Birmingham Law School.
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