Arbitration in the Netherlands: how it works and when to choose it

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.

The main differences with a court case are practical. Within the limits of Book 4 Rv, you choose the arbitrators, the language, the place of arbitration and how the procedure is conducted. 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 jurisdiction, which the tribunal decides first itself (Article 1052 Rv) and which 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; if your clause is silent, the Act and most institutional rules leave the number to agreement between the parties or to the institute.

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 panel of three 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 under Book 4 Rv themselves, or institutional arbitration under the rules of an institute such as the NAI. 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.

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. 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.

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 can take considerably longer. You can agree a deadline for the award in your clause or in the first procedural order.

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). A bailiff can then enforce it like 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 check as the claimant?

Start with the clause: it determines where and under which rules you file. Then prepare the request for arbitration with the documents that support your claim.

• Check which institute, rules, number of arbitrators and place of arbitration the clause names.
• Check whether the clause requires negotiation or mediation first, and within what period.
• Check the limitation period of your claim; filing the request for arbitration interrupts it.
• Check whether you need urgent measures, such as prejudgment attachment or a kort geding, before the tribunal is formed (Article 1022a Rv).
• Budget for the advance on costs, which the institute calls before the merits are dealt with.

What should you check as the respondent?

Note the deadlines for your answer and for appointing your arbitrator at once. If you miss the appointment deadline, the institute can appoint an arbitrator for you.

• Check whether there is a valid arbitration agreement, proven in writing (Article 1021 Rv).
• Raise any objection to jurisdiction before you put forward your defence on the merits.
• Check the independence of the arbitrators and challenge one promptly if you have justified doubts.
• If you lose, note the three-month period for a setting-aside claim (Article 1064a Rv).

What can we do for you with arbitration?

We advise businesses on arbitration and represent them in arbitral proceedings and related court cases; see also our corporate lawyer page.

• We draft or review the arbitration clause in your contract: institute, number of arbitrators, seat and language.
• We assess whether arbitration or the Dutch courts, including the Netherlands Commercial Court, suit your dispute.
• We prepare the request for arbitration or the statement of defence, with evidence and witness statements.
• We represent you at the hearing before the NAI, the ICC or a sector institute.
• We apply for leave for enforcement (exequatur) under Article 1062 Rv or bring or defend a setting-aside claim.

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