Arbitration means that a private tribunal, not a state court, decides your dispute because you and the other party agreed to that. The award is binding and enforceable, and a court can set it aside only on a few narrow grounds; there is no appeal on the merits unless you agreed on one.
That finality is the trade-off. In return you get a decision-maker with expertise in your sector, a procedure you can shape yourselves and an award that can be enforced in more than 170 countries under the New York Convention. Arbitration is often more expensive than a first-instance court case, and a mistake in the award can usually not be corrected.
What is arbitration and how does it differ from court proceedings?
Arbitration is a form of private adjudication: one or more arbitrators hear both sides and give a decision, the arbitral award (arbitraal vonnis). Unlike a mediator, an arbitrator does not help you reach a deal but decides the case.
In the Netherlands the rules are in Book 4 of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering, Rv), Articles 1020 to 1077. This Dutch Arbitration Act was modernised on 1 January 2015 and follows international practice closely, including the UNCITRAL Model Law. Dutch courts support arbitration and intervene only where the Act says so.
The main differences with a court case are practical. You choose the arbitrators, the language and the place of arbitration. Hearings are not public. Court proceedings, by contrast, are in principle public, the judge is assigned to you and the procedure follows the Code of Civil Procedure and the court rules.
How do you agree to arbitration?
You need an arbitration agreement (overeenkomst tot arbitrage). This can be a clause in your contract that covers future disputes, or a separate agreement made once a dispute has arisen.
Under Article 1020 Rv the agreement can cover existing disputes and disputes that may arise from a specific legal relationship. The subject must be something the parties can freely dispose of. Matters such as divorce or the legal status of a person cannot be decided by arbitrators. Under Article 1021 Rv the arbitration agreement is proven by an instrument in writing, which includes an e-mail or general terms and conditions that one party has accepted.
A well-drafted clause names the arbitration institute or rules, the number of arbitrators, the place of arbitration and the language. A vague clause invites a separate dispute about whether the tribunal has jurisdiction at all. That dispute costs time and money before the real case has even started.
Can you rely on an arbitration clause against a consumer?
Only to a limited extent. Under Article 6:236 (n) of the Dutch Civil Code (BW), an arbitration clause in general terms and conditions used against a consumer is presumed unreasonably onerous. That is unless the consumer is given at least one month, after the business invokes the clause, to choose the competent court instead.
Who decides your case in arbitration?
The arbitrators decide. You and the other party appoint them, directly or through the procedure of the arbitration institute you chose.
An arbitrator acts much like a private judge. Many arbitrators are lawyers, but a construction engineer, an accountant or another expert can also sit on a tribunal when the dispute calls for technical knowledge. Under the Dutch Arbitration Act the tribunal must consist of an odd number of arbitrators. An arbitrator must be independent and impartial. A prospective arbitrator has to disclose any circumstances that could give rise to justified doubts about this, and a party can challenge an arbitrator on those grounds.
One arbitrator or three?
That depends on the size and complexity of the dispute. A sole arbitrator keeps the costs down and suits a relatively simple case with a limited amount at stake.
In a complex or high-value case a panel of three is common. Each party then appoints one arbitrator, and those two arbitrators, or the institute, appoint the chair. A three-member panel brings more perspectives but also costs roughly three times as much in arbitrators’ fees. Put the number in your arbitration clause, so you avoid a debate about it later.
Which rules and institutes can you choose?
You can choose ad hoc arbitration, where the parties and the tribunal organise the procedure themselves, or institutional arbitration under the rules of an arbitration institute. For most businesses an institute is the safer choice.
The rules of an institute cover the appointment of arbitrators, the exchange of written submissions, the hearing, the handling of evidence and the costs. Where the rules are silent, the Dutch Arbitration Act fills the gaps if the place of arbitration is in the Netherlands. Parties are also free to agree on specific points, such as the number of written rounds or a deadline for the award.
How do the NAI and the ICC work?
The Netherlands Arbitration Institute (NAI) in Rotterdam is the main general arbitration institute in the Netherlands. The International Chamber of Commerce (ICC) in Paris is widely used for international commercial disputes.
Both institutes administer the case from the request for arbitration to the final award. They check whether the arbitrators are independent, set or supervise the costs and deal with challenges. The ICC Court also scrutinises draft awards on their form before they are issued. The NAI rules contain an express confidentiality obligation for the parties and the arbitrators. In several sectors there are specialised institutes, for example the Arbitration Board for the Building Industry (Raad van Arbitrage voor de Bouw) for construction disputes.
Why do businesses choose arbitration in the Netherlands?
Because the Dutch Arbitration Act is modern, the courts respect arbitration agreements and Dutch awards are enforceable abroad. The Netherlands is also seen as a neutral place for parties from different countries.
If one party starts court proceedings despite a valid arbitration agreement, the Dutch court declares that it has no jurisdiction, provided the other party invokes the arbitration agreement before submitting a defence (Article 1022 Rv). A Dutch court can, however, still grant interim relief in summary proceedings (kort geding) while the arbitration is pending, for example to secure evidence or assets.
The Netherlands is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. An award made in Amsterdam or Rotterdam can therefore be enforced in all other contracting states, subject only to the limited refusal grounds in that Convention. Hearings can be held in English and many Dutch arbitrators and lawyers work in English every day.
What happens during an arbitration?
The claimant files a request for arbitration, the tribunal is formed, the parties exchange written submissions and there is usually an oral hearing. The tribunal then gives its award.
The Dutch Arbitration Act requires the tribunal to treat the parties equally and give each of them the opportunity to put forward its case. Evidence is mostly documentary, supported by witness statements and, where needed, expert reports. There is no broad obligation to hand over all internal documents; a party can ask the tribunal to order the other side to produce specific documents. The tribunal can also order a party to pay the costs of the arbitration, including reasonable legal costs.
How long an arbitration takes depends on the case and on how quickly the tribunal is formed. A straightforward case can be decided within months; a complex international case with several rounds of submissions and experts can take considerably longer.
Can you challenge an arbitral award?
Only on narrow grounds. You can ask the court of appeal (gerechtshof) to set aside the award, but the court does not look at whether the arbitrators decided the case correctly on the merits.
Under Article 1065(1) Rv an award can only be set aside if there is no valid arbitration agreement, the tribunal was constituted in breach of the applicable rules, the tribunal did not comply with its mandate, the award was not signed or does not contain reasons, or the award or the way it was made conflicts with public policy. The claim for setting aside must be brought before the court of appeal within three months after the award was sent to the parties (Article 1064a Rv). An appeal to a second arbitral tribunal is only possible if the parties agreed on it (Article 1061b Rv).
How is an award enforced?
To enforce a Dutch award against an unwilling party you need leave for enforcement (exequatur) from the preliminary relief judge (voorzieningenrechter) of the district court (Article 1062 Rv). Once leave is granted, a bailiff can enforce the award in the same way as a court judgment. For a foreign award, the New York Convention applies.
When should you choose arbitration, and when not?
Arbitration suits international contracts, technical disputes and cases where confidentiality matters. It is less suitable for small claims or where you may want a full appeal.
Consider three questions before you sign. Is the other party based in a country where a Dutch court judgment is hard to enforce, while an arbitral award is recognised? Does the dispute require specialist knowledge that you would rather not explain to a generalist judge? And is the amount at stake large enough to justify the arbitrators’ fees and the institute’s administrative costs? If the answer to all three is no, a Dutch court may serve you better. Dutch courts also offer the Netherlands Commercial Court (NCC), which hears international commercial cases in English.
What should you do if a dispute arises?
First check your contract for an arbitration clause and read which rules and institute it names. Those rules set the first deadlines and tell you how to start the case.
If you are the claimant, prepare your request for arbitration with the documents that support your claim. If you are the respondent, note the deadline for your answer and for the appointment of your arbitrator; missing it can mean the institute appoints one for you. If you believe there is no valid arbitration agreement, raise that before you put forward your defence on the merits, otherwise you may lose the argument. And if you want to challenge an award, keep the three-month period of Article 1064a Rv in mind.
In summary
- Arbitration is binding private adjudication based on an agreement between the parties, governed in the Netherlands by Book 4 of the Code of Civil Procedure.
- You choose the arbitrators, the rules, the place and the language; hearings are not public.
- An award can only be set aside on the narrow grounds of Article 1065 Rv, by the court of appeal, within three months.
- Awards made in the Netherlands are enforceable in more than 170 countries under the New York Convention.
- A clear arbitration clause, drafted before a dispute arises, prevents a costly fight about jurisdiction.
Frequently asked questions
Is an arbitral award binding?
Yes. The award has the same binding force as a court judgment between the parties. To enforce it you need leave from the preliminary relief judge of the district court.
Is arbitration confidential?
Hearings are not public. Confidentiality of the documents and the award depends on the rules you chose; the NAI rules, for example, contain an express confidentiality obligation.
Can I still go to court if my contract contains an arbitration clause?
Not for the merits of the dispute, provided the other party invokes the clause in time. You can still ask a Dutch court for urgent interim measures in summary proceedings.
At Law & More we draft arbitration clauses, advise on whether arbitration suits your contract and represent clients in arbitral proceedings and related court cases. For the text of the Dutch Arbitration Act, see the Dutch Code of Civil Procedure; for the countries that apply the New York Convention, see the UNCITRAL status list.
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