When should parties consider choosing the Dutch NCC for arbitration annulment proceedings?



Parties that seek a tailor-made and specialized form of dispute resolution often prefer arbitration over court proceedings. But the annulment of arbitral awards place before a state court. This week, the Netherlands Commercial Court (NCC) announced that it can offer customized annulment proceedings in the English language for arbitral awards with Amsterdam as the place of arbitration. When should parties consider choosing the NCC for annulment proceedings?

Annulment of arbitral awards

Parties to a contract have various reasons to opt for private dispute resolution via arbitration proceedings instead of going to a state court. Specialized arbitrators for highly technical issues, a a customized course of proceedings according to an agreed timetable, or being able to argue the case in the English language can all be advantages of arbitration. Another characteristic of arbitration is that an arbitral award, in principle, is not subject to appeal. Arbitration proceedings therefore often bring finality to a dispute sooner than court proceedings, where judgments are open to appeals. The one exception to this is that it is possible to request the annulment of an arbitral award, with the competent state court located in the place of arbitration. For example, if an arbitral award is the result of proceedings with the place of arbitration in Amsterdam, the annulment proceedings will take place before the Amsterdam court of appeal, in Dutch, and under Dutch procedural rules.

Annulment proceedings before the NCC

The NCC is a specialized division of the Amsterdam District Court and the Amsterdam Court of Appeal which offers high-end international dispute settlement for international commercial cases. Proceedings before the NCC are conducted in English, result in an English law judgment, and are heard by a three-judge panel which has knowledge of international commercial litigation. Furthermore, the NCC offers parties active involvement in the setting of the procedural agenda. The NCC is only competent to hear a claim if parties have made an explicit choice for the NCC to be the forum and have agreed to proceedings in the English language.

The abovementioned advantages that arbitration proceedings bring are not present in the court proceedings on annulment of an arbitral award. The NCC has made it clear to interested parties that if they opt for the NCC as the competent forum for annulment proceedings, these proceedings can still have the benefit of being held in the English language and will have a flexible procedural schedule. The NCC has also published a new standard clause so that parties can ensure that potential annulment proceedings must be settled by the NCC of appeals. This form can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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