Arbitration in the Netherlands
Arbitration is a common used form of dispute resolution besides the available recourse to a civil state court / District Court. An arbitral award has the same value as an award in civil court and can be enforced easily. However, there are limited circumstances under which a District Court may interfere with the jurisdiction of an arbitral tribunal and may even set aside or annul a final arbitral award. Dutch business lawyer Sander Schouten explains this procedure.
Setting aside or annul an arbitral award
After an arbitration procedure has finished and a final decision is given, a party can lodge an application to the District Court for setting aside this award. As this procedure basically goes against the purpose of having a fully competent and independent arbitral tribune, it has to be treated with caution. Setting aside of the award can therefore only take place on one or more of the following limited grounds:
- absence of a valid arbitration agreement;
- the arbitral tribunal was constituted in violation of the rules applicable thereto;
- the arbitral tribunal has not complied with its mandate;
- the award is not signed or does not contain reasons.
No second plea or appeal allowed
A setting aside proceedings cannot be used as a form to plea a case for the second time. The District Court will not judge the merits of the case but can only consider the grounds named before. This is to avoid random setting aside proceedings from parties who just cannot accept the final award. An application for annulment or setting aside will however not suspend the enforcement of the award. You have to request the suspension of enforcement pending the setting aside proceedings separately otherwise enforcement measures (like seizure of assets or execution) can be carried out. Of course a party is liable for damages when this party carries out enforcement and the award is eventually annulled.
District Court competent to decide on claim
If a District Court sets aside an award, the jurisdiction of the District Court revives with exclusion of the Arbitration Court. The District Court will then be the competent party to decide on the initial claim and the proceedings need to be started over.
Arbitration in The Netherlands: recognition and enforcement of arbitral awards
An arbitral award issued by a Dutch arbitration committee can easily be recognized and, subsequently, enforced in The Netherlands. An arbitral award issued in an international arbitration outside The Netherlands can, in many cases, also be recognized in The Netherlands. If you have any specific questions on such matters, please feel free to contact us.