Arbitration Law reform
Although the present Dutch Arbitration Act is relatively young and (still) qualifies as a modern pro-arbitration statute, a legislative proposal has recently been presented to parliament to further enhance the efficiency and flexibility of the arbitral process in the Netherlands. After stakeholders were given the opportunity to comment on a draft legislative proposal in a formal consultation process last year, the proposal was slightly modified.9 The most significant revisions of the Act, including the latest modifications in relation to the consultation document, are addressed below. The draft amendment was sent to Parliament on 16 April 2013. The new Act will likely enter into force at a somewhat later moment than earlier anticipated (namely, the second half of 2014).
Proceedings for setting aside reduced to a maximum of two instances
One of the proposals to increase the efficiency of the arbitral process is to limit the proceedings for the setting aside of arbitral awards to a maximum of two instances. The legislative proposal provides that a request for the setting aside of an arbitral award must be addressed directly to the Court of Appeal (instead of the District Court), after which it is only possible to appeal to the Supreme Court on limited grounds. This helps reduce cost and time and improves efficiency, as the parties are prevented from possibly having to go through three instances after completion of the arbitration.
Asymmetry in the right to appeal in enforcement proceedings
Present Dutch arbitration law provides that only decisions denying leave for enforcement of arbitral awards can be appealed; it does not permit an appeal against the grant of leave to enforce. The consultation document suggested removing this asymmetric appeal prohibition by opening up the possibility to lodge cassation appeal proceedings against a decision of the Court of Appeal in case leave for enforcement is granted. The parties could choose opt-out of this possibility to appeal to the Supreme Court. The proposal to abolish the so-called asymmetrical recourse system in enforcement proceedings therefore did not make it to the legislative proposal presented to Parliament.10 Also the proposal to have enforcement proceedings heard by the Court of Appeal instead of the District Court has been abandoned. As a result, decisions denying leave for enforcement of arbitral awards can be appealed up to the Supreme Court; judgments granting leave to enforce cannot.
Introduction of a system of remission
With regard to the consequences of setting aside proceedings, the legislative proposal introduces a system of remission in which, unless the parties agree otherwise, the state court’s jurisdiction revives only if the arbitral award is set aside due to the absence of a valid arbitration agreement. However, the state courts’ jurisdiction will no longer revive if and to the extent the arbitral award is set aside on another ground. The proposal also provides for the possibility for the Court of Appeal to suspend the setting aside proceedings to allow the arbitral tribunal to right a wrong by resuming the arbitral proceedings or by taking another measure that the arbitral tribunal deems appropriate. Such a decision of the Court of Appeal cannot be appealed. These amendments further limit the intervention of state courts in the arbitral process, making the arbitral process more efficient.
Confirmation that arbitrators should primarily rule on their own jurisdiction
Another proposal resulting in more independence from the state courts is the introduction of a new provision stipulating that a declaration of the state court that it has no jurisdiction shall not be subject to appeal. Only the opposite decision that the state court does have jurisdiction can be appealed. This underscores one of the basic principles already underlying the current arbitration law: that arbitrators should primarily rule on their own jurisdiction.
Power to issue interim measures in the main proceedings
In addition to the already existing authority of the arbitral tribunal to grant interim measures in summary proceedings, the legislative proposal explicitly confirms the arbitrators’ power to issue interim measures in the main proceedings (without any party initiating summary proceedings). This possibility was already recognised in, for instance, article 38 of the NAI Rules, and thus already used in practice. The order for interim measures will qualify as an arbitral award and is enforceable.
Reduced administrative burden
The legislative proposal presented to Parliament removes some practical obstacles by means of a reduction in the administrative burden. One example is the abolishment of the compulsory filing of arbitral awards with the District Court; doing so is only required if the parties agreed to it. Another example is the opening up of the possibility for parties to use electronic means where written form is currently required. These new features should help reduce the costs involved in arbitration, and further enhance the competitive position of the Netherlands as a venue for both domestic and international arbitration.
Maximized party autonomy
Parties choosing the Netherlands as a forum for the resolution of their arbitral disputes already enjoy broad freedom in determining the procedure to be followed by the arbitral tribunal in conducting the proceedings. The legislative proposal builds on this basic principle by ensuring maximum party autonomy. Examples are the parties’ right to exclude the authority of the arbitral tribunal to order the appearance of a witness or expert, to render interim measures or to order the disclosure of documents.
Confidentiality
Although it is a generally accepted principle, there currently is no specific provision for confidentiality in arbitration in the Netherlands. The consultation document suggested to codify a principle already adopted in the NAI Rules, being that arbitral proceedings are confidential and that all persons involved either directly or indirectly are bound to secrecy, save and insofar as disclosure ensues from the law or the agreement of the parties. This proposal did not survive. The legislative proposal presented to parliament does not include a confidentiality provision. This means that it remains for the parties to decide whether to include a confidentiality provision in their arbitration agreement, or to opt for a set of arbitration rules that include such provision.
Partial setting aside
The draft proposal extends the possibilities for the partial setting aside of arbitral awards. If a ground for setting aside only involves part of the arbitral award, the remainder of the award shall not be set aside to the extent that it is – with a view to the content and purport of the award – not inextricably linked to the part of the award to be set aside.
Challenges to arbitrators
One of the proposed amendments fiercely criticised in the consultation process – by the ICC, the PCA and the NAI, among others – was the provision stipulating that an arbitration institute involved in an arbitration seated in the Netherlands would no longer be able to take a legitimate decision on the challenge of an arbitrator. The proposed draft provided for the president of the District Court to decide on the merits of any challenge to an arbitrator. Stakeholders commented that this approach runs counter to international best practices. Many arbitration rules that are widely used in the Netherlands – including the UNCITRAL Rules and the ICC Rules – include their own provisions for the resolution of challenges. Commentators reasoned that the arbitral institution administering a dispute would consistently be better placed to decide on a challenge, a process that requires a combination of neutrality and familiarity with the details of the case. It would be both unusual and undesirable to require parties to bring their challenge before a state court, particularly in an international context. By refusing to allow parties to agree upon an alternate procedure, the proposed draft would cast a cloud on the validity of any arbitration conducted in the Netherlands in which a challenge would be decided in accordance with arbitration rules agreed upon by the parties. To alleviate the concerns expressed, the proposal was modified. The draft amendment sent to parliament now allows parties to agree upon an alternate procedure for challenges to arbitrators.
