We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
02 July 2019
NCC's and NCCA's jurisdiction
NCC choice-of-forum clause
NCC's first judgment
Proceedings before NCCA and Supreme Court
Recognition and enforcement of NCC and NCCA decisions
In December 2018 the Dutch Senate approved a bill to establish a commercial court in the Netherlands. As such, from 1 January 2019 the international trade chamber of the Amsterdam District Court – known as the Netherlands Commercial Court (NCC) and the Netherlands Commercial Court of Appeal (NCCA) – allows parties to resolve international civil or commercial disputes and litigate in the English language, both in first instance (NCC) and appeal (NCCA).
A dispute will typically be considered international if, for example:
Most of these claims will be contractual in nature, but they can also include:
In addition, the NCCA can be designated by parties for annulment claims of an international arbitration award.
For the NCC and the NCCA to have jurisdiction, four conditions must be met.
First, the parties involved in the proceedings must have designated the NCC – or the NCCA for appeals – as the forum to hear their case. Alternatively, the NCC or the NCCA must have jurisdiction to hear the case on other grounds.
Second, Dutch procedural law explicitly requires that the case be a civil or commercial matter in connection with a particular legal relationship within the parties' autonomy. Pursuant to the explanatory notes, all matters dealt with by a commercial chamber of a Dutch court are in scope with this requirement. These cases include, but are not limited to:
However, the NCC and the NCCA will not hear cases that are within a different chamber's exclusive jurisdiction, such as:
Further, the NCC will not hear cases that are within the jurisdiction of the sub-district court – for example:
Third, the civil or commercial matter must be an international dispute. Pursuant to the explanatory notes, such a matter would typically concern an international dispute when:
Finally, the parties to the proceedings must expressly agree in writing that proceedings will be brought before the NCC or the NCCA in English. Such jurisdiction can be conferred before and after a dispute arises.
However, pursuant to Dutch law, an agreement in which the designation of the NCC or the NCCA was included in a party's general terms and conditions and was accepted tacitly by the other party does not satisfy this requirement. In such an event, this designation has no legal effect unless, when the agreement was concluded, or at a later time, there is express written acceptance of the clause in the general terms and conditions, which shows agreement for the proceedings to be brought before the NCC or the NCCA in English.
Parties may agree a clause that confers jurisdiction and records their agreement for legal proceedings to be in English before the NCC or the NCCA. The NCC recommends using the following NCC choice-of-forum clause:
All disputes arising out 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). An action for interim measures, including protective measures, available under Dutch law may be brought in the NCC's Court in Summary Proceedings (CSP) in English.
If the parties agree that any annulment proceedings to set aside any international arbitration awards can be conducted in English, they must consequently confer jurisdiction to the NCCA (and not to the NCC). Further, the place of arbitration must be located in the jurisdiction of the Amsterdam Court of Appeal.
On 8 March 2019 the NCC issued its first judgment in summary proceedings (Elavon Financial Services DAC v IPS Holding BV). In this case, Elavon Financial Services DAC sought an order permitting the sale of pledged shares in a private transaction (debt-for-equity swap) instead of a public auction. Under Dutch law, a pledgee can enforce a pledge and sell the collateral in a public auction. However, to sell the shares in a private sale, juridical permission is required. The NCC judged that:
Accordingly, the NCC granted permission for the shares to be sold and transferred to the buyer under the conditions described in the proposed share purchase agreement.
The NCC's judgments will in principle be open to appeal before the NCCA within three months from the date of such judgment, and the NCCA's judgments will in principle be open to appeal in cassation before the Supreme Court within three months from the date of judgment. However, unlike the proceedings before the NCC and the NCCA, proceedings before the Supreme Court (including its decision) will be in Dutch.
The legal costs will typically include:
The NCC and the NCCA charge an upfront flat fee depending on where the action is initiated; this fee is not related to what the case is about, the duration of the case or how much money is being claimed. The fee for each party is €15,000 for the NCC and €20,000 for the NCCA. Where the claimant fails to comply, the court will – having heard the respective party's view – impose a penalty (eg, dismissal of the case). However, in principle, this does not prevent a party from initiating new proceedings on the same matter before the NCC or the NCCA.
Further, the parties involved may enter into an agreement on the allocation of the (actual) costs of the legal proceedings, including:
Such agreement should be made before the proceedings, but no later than the day on which the NCC or the NCCA determines when it will give its judgment in the main action. Where no agreement is made or notified on time, the NCC or the NCCA will apply the system of limited adverse costs awards (ie, disbursements and the legal fees of the lawyer representing the opposing party), which the unsuccessful party will be ordered to pay to the successful party. The disbursements, which include the actual costs paid by the relevant party in court fees, costs of serving the relevant judicial documents, compensation paid to witnesses and the fees of court-appointed experts, will be fully compensated. However, the actual legal fees incurred by the successful party will not be fully compensated. Instead, there is a system in which points are awarded for each act of the legal proceedings (eg, writ of summons, court hearing and motion). For cases before the NCC, these costs will range between €2,000 for a simple matter and €8,000 for a complex matter for each point. For cases before the NCCA, these costs will range between €3,000 and €12,000.
The aforementioned system does not apply in IP matters as a result of EU Directive 2004/48/EC.
NCC and NCCA judgments will be recognised and enforceable within the European Union under the recast EU Brussels Regulation (1215/2012) without any special procedure or declaration of enforceability. The same applies to the recognition and enforcement of these judgments in Switzerland, Norway and Iceland under the Lugano Convention. Further, the Netherlands is party to other conventions which allow enforcement in simplified proceedings, such as:
If no treaty or convention is in force on reciprocal recognition and enforcement of judgments, it depends on the applicable laws as to whether and to what extent a judgment of the NCC or the NCCA will be recognised and enforceable.
The NCC and the NCCA deal with complex international civil and commercial disputes (eg, contractual disputes, tort disputes, property law disputes and corporate law issues) but they can also be considered as an alternative option when enforcing an international arbitral award or to applying to set aside an international arbitral award at the NCCA.
A key advantage of submitting a case to the NCC or the NCCA is that the language of the entire proceedings (including the judgment) will generally be in English. Further, the judgments of the NCC and the NCCA will be automatically enforceable throughout EU member states and within Switzerland, Norway and Iceland. Depending on the circumstances of the case, the NCC and the NCCA may be attractive alternative forums to regular district courts, arbitration institutes and international commercial courts, such as the London Commercial Court, the International Chamber of the Paris Commercial Court, the Dubai International Financial Centre Court of First Instance and the Singapore International Commercial Court.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.