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A foreign arbitral award can only be enforced in the Netherlands after a Dutch court has granted leave for enforcement (verlof tot tenuitvoerlegging), known as an ‘exequatur‘. The request goes to a court of appeal (gerechtshof). For awards made in another New York Convention state, Article 1075 of the Dutch Code of Civil Procedure (DCCP) applies; otherwise Article 1076 DCCP.
Arbitral awards are made by arbitral tribunals, often under the rules of an institution such as the Netherlands Arbitration Institute (NAI) or the International Chamber of Commerce (ICC). An award made in the Netherlands is not a foreign award. Leave to enforce it is granted by the preliminary relief judge (voorzieningenrechter) of the district court at the place of arbitration (Article 1062 DCCP), the judge who also hears interim relief proceedings in the Netherlands. Our litigation lawyers in Amsterdam explain below how enforcement works and on which grounds it can be refused.
What is the definition of arbitration?
Arbitration is best defined as a method of dispute resolution to resolve a conflict, without going to the (civil) courts. In arbitration, the judge does not decide, but experts (also called arbitrators) decide on the present dispute.
Arbitration in the Netherlands is therefore an alternative to proceedings before the civil courts. If a party relies on a valid arbitration agreement before putting forward any other defence, the court declares that it has no jurisdiction (Article 1022 DCCP). The arbitrators often have knowledge of a particular industry. Together they form the arbitral tribunal (scheidsgerecht). It must consist of an odd number of arbitrators or of a sole arbitrator; if the parties agreed on an even number, the arbitrators appoint an additional arbitrator as chair (Article 1026 DCCP). The arbitrators are appointed in the way the parties have agreed (Article 1027 DCCP).
Their decision is an arbitral award, not a binding opinion (bindend advies): the Dutch rules on settlement agreements do not apply to arbitration (Article 7:900(4) Dutch Civil Code). Unlike a binding opinion, an award can be enforced once a court has granted leave. Particularly in the business world, parties often choose arbitration. Below, our lawyers discuss the enforcement of arbitral awards and the conditions attached to it.
How does the New York Convention (1958) apply to enforcement in the Netherlands?
The lawyers at MAAK in Amsterdam more often point out the so-called United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958)(in short: New York Convention (1958)) when entering into a commercial agreement. This is not without reason. The 1958 New York Convention governs the recognition and enforcement of arbitral awards made in the territory of a state other than the state where recognition and enforcement of those awards is sought.
The New York Convention is not as well known to all entrepreneurs, but it matters greatly in international contracting. More than 170 States are party to it (UNCITRAL status table). For enforcement, what counts is where the award is made (the place of arbitration) and where the debtor has assets, not where your contracting party is established. The Netherlands applies the Convention only to awards made in the territory of another Contracting State (reservation under Article I(3) of the Convention). An award made in a State that is not a party is dealt with under Article 1076 DCCP, unless another treaty applies.
What is the advantage of arbitration over a Dutch court?
There is a substantial advantage to agreeing on a Dutch arbitration clause in international contracts (or in international purchase or sales conditions): because so many States are party to the New York Convention, an arbitral award made in the Netherlands is often easier to enforce, especially outside Europe. That is a substantial difference from a Dutch or other European court judgment, which in that sense has a more limited reach. For this reason, our contract lawyers often point this out.
Other possible advantages are that arbitrators can have sector-specific knowledge and that proceedings can be faster. Arbitral awards are not published in the way court judgments often are. Dutch law does not, however, impose a general duty of confidentiality in arbitration: it only provides that no copy of a deposited award is given to third parties (Article 1058(4) DCCP). Confidentiality therefore depends on the arbitration rules chosen or on a separate agreement. In short, arbitration can be a good alternative to going to the civil court, and you can provide for it in general terms and conditions or in a commercial contract. That can prevent many problems when a business dispute arises with a trading party located ‘far from home’.
In many national and international commercial contracts, arbitration is agreed upon to settle disputes; it then takes the place of the state courts. Whether it is faster or cheaper than court proceedings depends on the case, the rules and the tribunal.
When can a foreign arbitral award be enforced in the Netherlands?
A foreign arbitral award is enforced only after leave from the court. Where the New York Convention applies, the request is made under Article 1075 DCCP. Articles 985 to 990 DCCP then apply accordingly, so far as the Convention does not provide otherwise, with the court of appeal (gerechtshof) taking the place of the district court (Article 1075(2) DCCP). The court does not examine the merits of the dispute again (Article 985 DCCP).
How does the exequatur procedure at the court of appeal work?
- The application (verzoekschrift) must be filed by a lawyer and must contain an address for service within the court’s district (Article 986(1) DCCP). Under Article 985 DCCP, read with Article 1075(2), the court for the place where the other party is domiciled or where enforcement is sought has jurisdiction.
- Under Article IV of the New York Convention, you must supply the duly authenticated original award or a duly certified copy, and the original arbitration agreement or a duly certified copy. If these documents are not in Dutch, a certified translation must be produced.
- The court decides with due speed, but only after hearing the other party or summoning it properly (Article 987(1) DCCP). The parties appear through a lawyer (Article 987(5) DCCP).
- The decision states its reasons and is given in public. It is provisionally enforceable without security, unless the court decides otherwise (Article 988 DCCP). An appeal in cassation to the Supreme Court (Hoge Raad) must be lodged within three months (Article 1075(2) DCCP).
- Once leave has been granted, the award is enforced through a bailiff (gerechtsdeurwaarder), for example by attaching bank accounts or other assets. Disputes about the enforcement itself go to the district court, and in urgent cases to the preliminary relief judge (Article 438 DCCP).
On what grounds can enforcement be refused?
Under Article V(1) of the Convention, enforcement may be refused only at the request of the party against whom the award is invoked, and only if that party proves that:
- a party to the arbitration agreement was under some incapacity, or the agreement is not valid under the law the parties chose or, failing that, under the law of the country where the award was made;
- it was not given proper notice of the appointment of the arbitrator or of the proceedings, or was otherwise unable to present its case;
- the award deals with a difference not falling within the terms of the submission to arbitration (a part that falls within it and can be separated may still be enforced);
- the composition of the tribunal or the procedure was not in accordance with the parties’ agreement or, failing such agreement, with the law of the country where the arbitration took place; or
- the award has not yet become binding, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.
The court may also refuse enforcement if the subject matter cannot be settled by arbitration under Dutch law, or if enforcement would be contrary to Dutch public policy (Article V(2)). If setting aside or suspension of the award has been requested in the country of origin, the court may adjourn its decision and, at the applicant’s request, order the other party to give suitable security (Article VI).
What applies if the New York Convention does not apply?
If no recognition and enforcement treaty applies, or if an applicable treaty allows reliance on the law of the country of enforcement, Article 1076 DCCP applies. The applicant submits the original or a certified copy of the arbitration agreement and of the award. Recognition and enforcement are granted unless the other party asserts and proves that there is no valid arbitration agreement under the law applicable to it, that the tribunal was constituted in violation of the applicable rules, that the tribunal did not comply with its mandate, that the award is still open to appeal to arbitrators or to a court in the country where it was made, or that it has been set aside by a competent authority of that country (Article 1076(1)(A)). The court also refuses if recognition or enforcement would be contrary to public policy (Article 1076(1)(B)).
Some of these grounds cannot be relied on by a party that did not object in time in the arbitration, and a failure to comply with the mandate only counts if it is serious (Article 1076(2) to (4) DCCP). Here too the court of appeal decides and the period for cassation is three months; no documents are needed to show that the award is enforceable in the country where it was made (Article 1076(6) DCCP).
Can a foreign arbitral award be set aside in the Netherlands?
No. The Dutch rules on setting aside (vernietiging) apply only if the place of arbitration is in the Netherlands (Article 1073(1) DCCP). Setting aside a foreign award must be sought in the country where it was made; in the Dutch exequatur procedure, that is relevant as a ground for refusal or for adjournment. For an award made in the Netherlands, the claim for setting aside is brought before the court of appeal of the district in which the place of arbitration is located (Article 1064a(1) DCCP), and only on one or more of the following grounds (Article 1065(1) DCCP):
a. there is no valid arbitration agreement;
b. the arbitral tribunal is constituted in violation of the applicable rules;
c. the arbitral tribunal did not comply with its mandate;
d. the award is not signed or does not state reasons in accordance with Article 1057;
e. the award, or the manner in which it was made, is contrary to public policy.
Can an award made in the Netherlands be revoked?
Revocation (herroeping) of an award made in the Netherlands is governed by Article 1068 DCCP. It can only take place on one or more of the following grounds:
a. the award is based in whole or in part on fraud discovered after the award, committed by or with the knowledge of the other party in the arbitration proceedings;
b. the award is based in whole or in part on documents that turn out to be false after the award was made;
c. a party has obtained, after the award, documents that would have influenced the decision of the arbitral tribunal and were withheld through the fault of the other party.
Strict time limits apply. A claim for setting aside must be brought within three months after the award was sent to the parties or, if the parties agreed on deposit with the court registry, after deposit; an award is deemed to have been sent four weeks after its date (Article 1058(2) DCCP). If the award is served with leave for enforcement, the other party can still bring the claim within three months after service (Article 1064a(2) DCCP). A claim for revocation must be brought within three months after the fraud or forgery became known or the new documents were obtained (Article 1068(2) DCCP). A claim for setting aside does not suspend enforcement, but the court of appeal can suspend it on request (Article 1066 DCCP).
Can a foreign award that is time-barred abroad still be enforced in the Netherlands?
In a 2015 decision, the Supreme Court dealt with a request under Article 1076 DCCP for leave to enforce an award made in Moscow by the International Commercial Arbitration Court. The Supreme Court held that the limitation or lapse of the right to enforce an award under the law of the country where it was made is not a ground for refusal under Article 1076(1)(A) DCCP. Nor does it make recognition or enforcement contrary to public policy under Article 1076(1)(B) (Supreme Court 17 April 2015, ECLI:NL:HR:2015:1077, para. 3.4.2). The decision concerned the route of Article 1076 DCCP; it does not address the New York Convention.
What does it cost to enforce an arbitral award in the Netherlands?
You can divide the costs of enforcing an arbitral award into three components: 1. the court fee (griffierecht), set by the Court Fees in Civil Cases Act (Wet griffierechten burgerlijke zaken); 2. the lawyers’ fees; and 3. the bailiff’s costs of enforcement. The rules on legal costs apply to the exequatur proceedings, so the court can order the unsuccessful party to pay the costs (Article 988(3) DCCP).
If the other party does not oppose the request, the costs are usually easier to estimate. This is different if it relies on grounds for refusal, if setting aside is pending in the country of origin, or if a dispute arises about the enforcement itself (executiegeschil, Article 438 DCCP). Ask a lawyer experienced in procedural law for an estimate in advance.
Frequently asked questions about enforcing foreign arbitral awards in the Netherlands
Which Dutch court decides on the enforcement of a foreign arbitral award?
A court of appeal (gerechtshof), which takes the place of the district court (Articles 1075(2) and 1076(6) DCCP). Under Article 985 DCCP, the court for the place where the other party is domiciled or where enforcement is sought has jurisdiction. For an award made in the Netherlands, the preliminary relief judge of the district court at the place of arbitration decides instead (Article 1062 DCCP).
Do you need a lawyer to enforce an arbitral award in the Netherlands?
Yes, for a foreign award. The application must be filed by a lawyer and the parties appear at the hearing through a lawyer (Articles 986(1) and 987(5) DCCP, which apply under Articles 1075(2) and 1076(6)). This differs from an arbitration seated in the Netherlands, where parties may appear in person (Article 1038 DCCP).
Which documents are needed to enforce a foreign arbitral award?
Under the New York Convention: the duly authenticated original award or a duly certified copy, and the original arbitration agreement or a duly certified copy, with a certified translation if they are not in Dutch (Article IV). Under Article 1076 DCCP: the original or a certified copy of the arbitration agreement and of the award; proof that the award is enforceable in its country of origin is not required (Article 1076(6)).
On what grounds can a Dutch court refuse to enforce a foreign arbitral award?
Under the New York Convention, only on the grounds of Article V: incapacity or an invalid arbitration agreement, lack of proper notice or of an opportunity to present one’s case, an award beyond the submission to arbitration, an irregular composition or procedure, an award that is not yet binding or has been set aside or suspended, non-arbitrability and public policy. Article 1076 DCCP contains a similar but not identical list.
Can the debtor stop enforcement by challenging the award abroad?
Not automatically. If setting aside or suspension has been requested in the country of origin, the Dutch court may adjourn its decision and order the other party to give suitable security (Article VI New York Convention; for Article 1076 cases, Article 1076(8) with Article 1066(2) to (6) DCCP). If the award is actually set aside there, that is a ground for refusal (Article V(1)(e) Convention; Article 1076(1)(A)(e) DCCP).
Primary sources
- Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering): Articles 438, 985, 986, 987, 988, 1022, 1026, 1027, 1038, 1058, 1062, 1064a, 1065, 1066, 1068, 1073, 1075 and 1076
- Dutch Civil Code (Burgerlijk Wetboek): Article 7:900
- Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958), Articles I, IV, V and VI; UNCITRAL status table (reservation of the Netherlands)
- Court Fees in Civil Cases Act (Wet griffierechten burgerlijke zaken)
- Supreme Court (Hoge Raad) 17 April 2015, ECLI:NL:HR:2015:1077
Dutch litigation lawyers for the enforcement of a foreign arbitral award
Are you looking for a Dutch arbitration lawyer for the enforcement of a foreign arbitral award in the Netherlands? A lawyer with excellent knowledge of Dutch procedural law? An arbitration law firm in the Netherlands with knowledge of international law? A law firm that knows what it means when an arbitral award is enforced in the Netherlands?
Our litigation lawyers for the enforcement of foreign arbitral awards in the Netherlands focus on procedural law. They assist you throughout the exequatur procedure, from the application to the court of appeal to the actual enforcement through a bailiff. Conversely, we assist you if a foreign arbitral award is being enforced against you in the Netherlands: you can then rely on the grounds for refusal in the New York Convention or in Article 1076 DCCP, while setting aside the award must be sought in the country where it was made.
