Arbitration offers an efficient alternative procedure outside Dutch courts for construction disputes. You submit the dispute to one or more independent arbitrators who issue a binding decision within an average of 12 months. The procedure is characterized by expertise, confidentiality, and customized proceedings. Our construction lawyers in the Netherlands shall explain the most important aspects.
Construction projects regularly generate complex disputes over defects, additional work, delays, or contract interpretation. The Netherlands Arbitration Institute for the Construction Industry handles dozens of disputes annually between contractors and principals. The total duration typically amounts to 11 to 12 months, considerably shorter than proceedings before government courts which average two years in first instance and another two years on appeal.
Why do contractors and principals choose arbitration under Dutch law?
Choosing arbitration in construction disputes offers seven essential advantages over going to court. Expertise comes first: you select arbitrators with specific knowledge of construction engineering, contract law, or offshore construction. Additionally, confidential treatment protects your business reputation, avoids negative publicity about project problems, and shields competition-sensitive construction techniques from public disclosure.
Dutch construction companies operate internationally, making arbitral awards directly enforceable in 170 countries through the New York Convention. A judgment from the Dutch court, however, often requires lengthy recognition procedures abroad. Moreover, you conduct the procedure entirely in English if desired, essential for international consortia or foreign principals.
The Netherlands Arbitration Institute registered a 45% increase in 2022 since 2018, reaching 133 new arbitration cases. This growth illustrates companies’ growing confidence in arbitration as dispute resolution. Especially in the construction sector, where technical complexity and high financial interests converge, arbitration provides added value.
How do you initiate a construction dispute in arbitration under Dutch law?
You file a request for arbitration, also called statement of claim. This request contains your claim, substantiation, and relevant documents such as the construction contract, construction reports, invoices, and any expert reports. Preferably use the model forms from the Council, as these align with procedural requirements from the Woningborg Dispute Regulations or the applicable arbitration rules.
Specify clearly what you claim: repair of defects, substitute compensation, payment for additional work, or a combination thereof. The claim forms the guideline for the arbitral tribunal, which cannot award more than you explicitly claimed. For Homeowners Associations, the procedure requires authorization from members for common areas or special authorization per member for private sections.
Application costs vary according to the financial interest of the dispute. Pay these costs within the stated period to the Council of Arbitration. In case of late payment, the Council closes the file and the dispute is deemed no longer pending. The date of receipt by the Council marks the official commencement of your procedure.
What claims arise in construction arbitration according to Dutch legislation?
Repair constitutes the most common claim for construction defects. The contractor has a contractual obligation to repair defects in accordance with the construction contract and Guarantee Scheme. Should the contractor fail proper repair within reasonable time, you claim condemnation to repair within a period to be determined by the arbitral tribunal.
Substitute compensation comes into play when repair is impossible or when you no longer trust repair work by the original contractor. This compensation includes the costs of repair by a third party or the depreciation of the structure, increased by statutory interest and reasonable extrajudicial collection costs.
Additional compensation covers consequential damage from construction defects. A leak damages wall or floor finishes, for instance, creating repair costs separate from the original defect repair. You substantiate damage items with invoices, quotations, and evidence demonstrating the causal connection with the defect.
Can a penalty be claimed in arbitration in the Netherlands?
A penalty functions as financial incentive for compliance with the arbitral award. The arbitral tribunal attaches a penalty to concrete obligations such as repair work within stated deadlines. This measure stimulates timely execution and prevents the condemned party from ignoring the condemnation.
Penalties can never be instituted as independent claims, however, but exclusively in combination with a main claim for repair or another non-monetary performance. For pure monetary claims such as compensation, no penalty applies, because the creditor can recover through attachment and execution. The arbitral tribunal does not impose penalties on its own initiative – you must specifically claim this in your request for arbitration.
Primary and subsidiary claims are expressly permitted. You claim, for example, primarily repair within six weeks and subsidiarily substitute compensation when repair does not qualify for award. The reverse order is also possible depending on your strategic considerations and confidence in execution by the opposing party.
How does the arbitration procedure proceed in construction disputes under Dutch law?
The opposing party receives the request for arbitration after commencement and typically gets four weeks for a statement of defense. Therein the contractor or principal responds substantively to your positions and can file a counterclaim (reconvention). With a counterclaim, you subsequently get the opportunity to respond within stated deadlines through a statement of defense in reconvention.
Submit relevant documents as much as possible simultaneously with the statements. Unsolicited forwarding of correspondence in between disrupts procedural economy and burdens the arbitral tribunal with fragmentary information. You need not forward email exchanges between parties to the Council, unless these contain crucial evidence for disputed points.
What role does an expert play in construction arbitration in the Netherlands?
The Council of Arbitration typically appoints an independent expert for construction disputes for factual on-site investigation. This expert inspects the structure, establishes defects, photographs findings, and reports to the arbitral tribunal. Parties receive an invitation to attend the inspection and explain their positions orally.
The expert report forms essential evidence in the procedure. After receipt, parties can respond in writing to the findings, signal any inaccuracies, or advance additional technical arguments. The expert also explores possibilities for amicable settlement, although parties are not obliged to cooperate.
Amicable agreements during expert investigation are documented and signed by both parties. This settlement agreement can subsequently be recorded in an arbitral settlement award, provided parties explicitly request this. Note: claims on the Guarantee Scheme normally cannot be derived from settlement awards unless the arbitral tribunal explicitly determines otherwise.
When does the oral hearing take place in Dutch arbitration proceedings?
The arbitral tribunal schedules the oral hearing after completion of the written round and any expert investigation. The Council of Arbitration determines the date in consultation with parties, taking into account the schedules of arbitrators and lawyers. On average, the hearing takes place eight to ten months after commencement.
During the hearing, both parties get the opportunity to explain their positions orally. You have the right to have witnesses or experts heard at your own expense, provided you timely inform the arbitral tribunal which persons you wish to hear and about what they will testify. This announcement must take place at least two weeks before the hearing according to procedural rules.
The arbitral tribunal can decide ex officio or upon request for a site visit to the construction project. For complex structural defects or doubt about expert findings, a joint inspection provides clarity. The arbitral tribunal can also order additional witness examinations when crucial facts remain disputed.
What happens after the oral hearing in Dutch arbitration?
The arbitral tribunal can allow parties to submit further statements or documents within stated deadlines. This possibility arises when new perspectives emerge during the hearing or when uncertainties require additional evidence. Typically the arbitral tribunal limits this phase to one round to avoid unnecessarily prolonging the procedure.
Parties can still reach agreement on the disputed points. A settlement reached during the oral hearing is recorded upon parties’ request in an arbitral settlement award. This award has the same enforceability as a contradictory award but differs in evidentiary value: claims on the Guarantee Scheme can only be derived from settlement awards when the arbitral tribunal explicitly mentions this.
Documents submitted only after closure of statement exchange are assessed by the arbitral tribunal case-by-case for admissibility. Late submission can lead to postponement of the decision or even inadmissibility of the relevant evidence. The procedural consequences are weighed at the latest during the hearing, whereby adversarial principles are guiding.
What costs does construction arbitration entail under Dutch law?
Total procedure costs in arbitration consist of arbitrator compensation, administrative costs of the Council of Arbitration, and attorney fees. These costs are substantially higher than court fees before government courts. However, the shorter duration often compensates for higher initial costs because attorney hours are considerably lower than for multi-year procedures in first instance and appeal.
The financial risk for the applicant remains limited to a maximum of the application costs amount. The Woningborg Dispute Regulations 2024 contain some exceptions to this rule, for example in case of manifestly unreasonable procedural conduct or abuse of procedural rights. For regular disputes, however, application costs constitute the capped procedural cost risk.
Upon condemnation for 50 percent or more in costs, Woningborg can charge the contractor the total procedure costs. The contractor receives the invoice not through the Council of Arbitration but directly from Woningborg. This system protects the applicant against unforeseen cost risks and promotes careful procedural conduct on both sides.
How are attorney fees divided in arbitration in the Netherlands?
The arbitral tribunal condemns the losing party to compensation of all reasonable attorney fees that the winning party incurred. This differs fundamentally from proceedings before government courts, where only a statutory liquidated rate is awarded which often represents a fraction of actual costs.
This cost arrangement functions as incentive against instituting hopeless claims. Parties with weak cases are disciplined by the risk of full cost condemnation. Simultaneously it offers certainty to parties with strong legal positions: they need not hesitate to engage adequate legal assistance, knowing this investment will be compensated upon success.
With partial award, the arbitral tribunal divides costs proportionally according to the extent parties prevailed. Should you win 70 percent of your claim, for instance, you typically receive compensation for 70 percent of your attorney fees and bear 30 percent yourself. This proportional division is perceived as fair and stimulates realistic negotiation positions.
What does the arbitral award contain according to Dutch law?
The arbitral tribunal tests construction defects through dual assessment: both against requirements from the Guarantee Scheme and construction technical provisions in the construction contract. Upon condemnation of the contractor, the award specifies which portion is granted under the Guarantee Scheme. This specification is crucial for possible reliance on repair warranty when the contractor fails to fulfill obligations.
Should the contractor fail to fulfill the portion awarded under the Guarantee Scheme within the stated period, you activate the repair warranty with Woningborg. Should you file this appeal within the three-month appeal period, Woningborg suspends settlement until clarity exists whether appeal will be filed. Upon appeal of the portion falling under the Guarantee Scheme, Woningborg suspends treatment until the final decision on appeal.
Award portions not related to the Guarantee Scheme fall outside the repair warranty. For enforcement of these portions, you request leave from the preliminary relief judge of Amsterdam District Court through a decree. With this leave you engage a bailiff for actual execution of the award, for example through attachment of the contractor’s assets.
How long does an arbitral award remain valid in the Dutch jurisdiction?
The enforceability of an arbitral award does not expire according to Article 3:324 Dutch Civil Code, but the underlying claim does according to regular limitation periods. For construction claims, a limitation period of five years typically applies per Article 3:310 Dutch Civil Code, calculated from the day after the entitled party became aware of the defect and the liable person.
The arbitral award interrupts limitation according to Article 3:316 Dutch Civil Code. After delivery of the award, a new five-year limitation period begins for execution of the awarded claim. This period is interrupted again by, for example, attachment or written reminder to the debtor for performance.
Pay attention to the formulation of your claim in the request for arbitration. The arbitral tribunal cannot award more than claimed, even when the expert report shows that additional repair work is necessary. Careful inventory of all defects and solid substantiation of claimed amounts prevents disappointments afterward.
What possibilities does appeal offer in arbitration in the Netherlands?
The Woningborg Dispute Regulations and NAI rules provide for appeal possibility against an arbitral award. You file appeal with the same Council of Arbitration within three months after the award date. For interim relief or urgent substantive disputes, a shortened appeal period of one month applies.
Application costs for appeal amount to €3,800 as of January 1, 2026, considerably higher than first instance costs. Should you lose the appeal procedure, these costs are definitively lost in addition to condemnation in opposing party’s procedural costs. Solid assessment of success probability in appeal prevents costly disappointments.
In appeal, the grievance system applies: you formulate concrete objections against the first arbitrators’ decision. These grievances limit the scope of review by the appeal arbitral tribunal. Appeal can also be filed pro forma, whereby you reserve the right to present grievances within a further stated period.
What happens upon withdrawal of arbitration according to Dutch legislation?
Parties can reach agreement in any phase of the procedure and withdraw the dispute. The Woningborg Dispute Regulations contain provisions regarding possible restitution of paid application costs. This restitution depends on the withdrawal moment and whether an expert was appointed.
Upon withdrawal before expert appointment, you receive a larger portion of application costs back than upon withdrawal after expert appointment. Expert costs constitute a substantial component of total procedure costs. Should you settle during expert investigation, these costs are already incurred and come at your expense according to cost division in the settlement agreement.
Withdrawal without underlying settlement sometimes occurs when parties reach arrangement elsewhere or when the applicant does not maintain the claim. Even then the cost arrangement from regulations applies, whereby the applicant typically bears incurred costs. Consult timely with your attorney about financial consequences of withdrawal in your specific situation.
Why is arbitration suitable for international construction projects in the Netherlands?
Arbitral awards are enforceable in over 170 countries through the 1958 New York Convention. For Dutch construction companies realizing offshore wind farms, infrastructure, or industrial complexes abroad, this offers essential protection. A judgment from the Dutch court, however, requires lengthy and uncertain recognition procedures in the country where the principal or assets are located.
The possibility to conduct proceedings in English lowers the threshold for international principals and consortia. Translation costs of procedural documents and witness statements disappear, making the procedure more efficient and accessible. Moreover, you prevent misunderstandings through translation errors or legal nuance differences between Dutch and English legal terminology.
Offshore wind projects, LNG terminals, or complex tunnel constructions require arbitrators with specific technical expertise. The NAI and Council of Arbitration for the Construction Industry have extensive lists of arbitrators with backgrounds in civil engineering, offshore engineering, maritime law, and contract law. This expertise ensures the arbitral tribunal understands the technical core of the dispute and formulates adequate solutions in the decision.
How does confidentiality protect your business reputation in Dutch arbitration?
Proceedings before government courts are public: hearings are accessible to press and public, judgments are published on rechtspraak.nl. For construction companies with tenders in the market, negative publicity about defects, delays, or financial claims can prove disastrous. Contracting authorities and private principals avoid contractors with a reputation for disputes.
Arbitration guarantees confidentiality of the procedure, expert report, and decision. Only parties and their legal counsel receive access to procedural documents. The Council of Arbitration for the Construction Industry publishes anonymized decisions for jurisprudence development, but without mentioning party names or recognizable project details.
This discretion also protects competition-sensitive construction techniques and calculation methods. For innovative constructions or patented building methods, you do not want this information reaching competitors through public judgments. Arbitration provides space to resolve technical disputes without business secrets becoming public.
Would you like certainty about your legal position in a construction dispute? Our specialized lawyers in Amsterdam analyze your situation and advise on the best strategy. Whether involving repair of defects, a compensation claim, or choosing between arbitration and court – we guide you from commencement to execution of the award.
Can a construction dispute be resolved through expedited arbitration in the Netherlands?
Expedited arbitration comes into play with immediate urgency during ongoing construction work. Consider imminent standstill through payment dispute, acute danger to structural stability, or blocking disagreements about design changes. The Council of Arbitration schedules a hearing within weeks when urgency is demonstrated credibly.
In expedited arbitration, you file a statement of claim without prior deposit of security. The defending party receives limited time for statement of defense, often only one to two weeks. No reply or rejoinder takes place; the arbitral tribunal handles the dispute directly at hearing and sometimes even delivers oral decision.
The expedited arbitration decision has provisional character: it binds parties until definitively decided in substantive proceedings. Therefore, alongside expedited arbitration, regular arbitration proceedings can be commenced wherein the arbitral tribunal reaches final judgment with complete instruction and evidence presentation.
Does expedited arbitration differ from interim relief at court under Dutch law?
Both procedures aim for rapid provisional relief, but expedited arbitration requires agreement on arbitration agreement or arbitration clause in the contract. In its absence, only the civil court in interim relief remains available. The preliminary relief judge can deliver decision within two to four weeks, comparable to expedited arbitration duration.
An important difference: appeal is available within one month against arbitral interim relief judgment, while no appeal is possible against court interim relief judgment. This appeal possibility in arbitration can be procedurally attractive when complex technical or legal questions play that deserve further review.
Choosing the civil court in interim relief risks the opposing party subsequently invoking the arbitration clause in substantive proceedings. This leads to parallel procedures with uncertainty about binding force of the provisional relief. Consistency in forum choice prevents procedural complications and delays.
What is the legal secretary’s role in arbitration in the Netherlands?
Each arbitral tribunal is assisted by a legal secretary from the Council of Arbitration. This secretary supports arbitrators with procedural actions, monitors deadlines, and handles correspondence with parties. The secretary has no voting rights but can advise on procedural legal issues and support award drafting.
A professional secretary’s involvement ensures quality and progress. Arbitrators are often busy specialists with limited time for administrative actions. The secretary relieves them in this area, allowing arbitrators to concentrate on substantive dispute assessment and formulating solid decisions.
For parties, the secretary forms the contact point for questions about scheduling, deadline extension, or submitting documents. This operational support increases accessibility of the procedure and prevents misunderstandings about procedural expectations. Contact the legal secretary for clarification when doubting deadlines or formalities.
How is the arbitral tribunal composed under Dutch law?
For simple disputes, the Council of Arbitration appoints one arbitrator, for more complex cases a tribunal of three arbitrators. Parties receive a list of available arbitrators after commencement and can designate or strike arbitrators themselves. When parties disagree on choice, the Council appoints arbitrators ex officio based on required expertise.
In a three-member arbitral tribunal, each party typically designates one arbitrator. These two arbitrators jointly appoint the third arbitrator who simultaneously becomes chairman. The chairman is always a lawyer with extensive arbitration experience. Party arbitrators can be technical specialists providing the tribunal with specific construction or offshore knowledge.
Arbitrators must be independent and impartial according to Article 1033 Dutch Code of Civil Procedure. Upon possible conflicts of interest, an arbitrator discloses these to parties, who can subsequently consent to appointment or request recusal. Transparency about secondary positions, prior involvement with parties, or attorney relationships protects procedural integrity.
Contact our law firm in Amsterdam for personal legal advice about your specific situation. We guide construction companies, contractors, project developers, and principals through arbitration of disputes regarding construction contracts, GIW regulations, UAV conditions, and construction defects. From drafting the request for arbitration to execution of the award – we stand by your side.
