Arbitration

1. What is arbitration and the arbitration agreement

Arbitration means justice by private judges, known as arbitrators. Arbitration requires an agreement and serves as an alternative to state court litigation. Such an agreement may consist of a clause in an agreement, the arbitration clause. Arbitrators render a decision in an arbitral award. The award is final and binding upon the parties.

2. NAI arbitration compared

2.1 Compared to state court litigation

Subject
Target audience	Companies and organisations (national and international). Less suitable for individuals.	Individuals, companies and organisations (national and international).	Companies and organisations (national and international).
Duration of the proceedings	The duration of NAI arbitration proceedings on the merits is on average 8.8 months and of NAI arbitration summary proceedings 38 days (2021).	The judiciary does not publish processing times. The processing time is perceived as a disadvantage (can be years instead of months).	Reasonably fast. Not much data is available (11 cases in the period 2019 – 2021 were completed within a year).
Number of bodies of proceedings on the merits	As a rule, one instance (sometimes setting aside proceedings).	Possibly two courts of fact and sometimes cassation.	Possibly two courts of fact and sometimes cassation.
Expertise	Parties have a say in the choice of those who will settle their dispute. Through expertise in a particular industry (e.g. energy, transport, construction, IT or post-M&A) or area of law, the arbitrators are well placed to settle the dispute and reason the award.	Parties have no influence on the choice of persons who will settle their disputes.	Parties have no influence on the choice of persons who will settle their disputes. The NCC focuses in particular on competition law, intellectual property law and restructuring.
Confidentiality	Confidential by default	Generally public	Generally public
Enforcement outside Europe	Good on the basis of the New York Convention (to which 172 countries are parties).	In the absence of a treaty, the proceedings will generally be re-done.	In the absence of a treaty, the proceedings will generally be re-done.
Costs	The parties pay NAI administration costs and the arbitrators’ fees and costs. Because there is only one instance and the duration is short, parties tend to save on lawyers’ fees.	Parties pay court fees (usually lower than NAI administration costs). Judges are paid by the government. Total lawyer fees can add up due to multiple instances.	Parties pay court fees (higher than in normal proceedings and usually lower than in NAI proceedings). Judges are paid by the government. Total lawyer fees can add up due to multiple instances.
Cost order	Full(er) litigation costs order against the unsuccessful party (costs of the NAI, arbitrators and lawyers’ fees).	Litigation costs award is a fraction of the successful party’s costs.	Litigation costs award is a fraction of the successful party’s costs.
Party autonomy and flexibility	Parties have a lot of flexibility to design the procedure to their liking.	Standard summons procedure.	Procedure with some flexibility.
Decision measure	According to the rules of applicable law, unless otherwise agreed.	Applicable law.	Applicable law.
Substantive law	Frequent choice of law by parties. Application of non-Dutch law, depending on the composition of the arbitral tribunal, no problem.	Frequent choice of law by parties. Foreign law is somewhat more complex for Dutch courts (input from parties is extra important).	Frequent choice of law by parties. Foreign law is somewhat more complex for Dutch courts (input from parties is extra important).
Who decides?	The arbitral tribunal (consisting of 1 or 3 arbitrators): arbitrators are legally qualified natural persons. NAI database contains about 200 qualified arbitrators from home and abroad.	Dutch (Court of Appeal) judges (or deputy judges).	The NCC(A) consists of 24 Dutch (Court of Appeal) judges.
Language	Parties can agree on any language. About 40 per cent of proceedings at the NAI are conducted in the English language.	Dutch (possibly the Friesian language)	NCC(A): proceedings/ judgment in English  Supreme Court: proceedings and ruling in Dutch
Electronic proceedings	Full through NAI arbitration platform (as of 1 January 2024).	Limited. Messaging with courts takes place only partly electronically.	Full through eNCC platform.

2.2 Compared to the ICC and LCIA

Subject
Target audience	Companies and organisations (both national and international).	Companies and organisations (both national and international).	Companies and organisations (both national and international).
Costs	With 10 million EUR in dispute, the estimated total costs for the administration and arbitrators (3) would be 150,500 EUR.	With 10 million EUR in dispute, the estimated total costs for the administration and arbitrators (3) would be 370,659.97 EUR.	The LCIA website does not contain a cost calculator or any way to deduce the average cost of a proceeding accurately.
Duration of the proceedings	The NAI has an average case duration of 8.8 months.   Interim relief cases last an average of 38 days.	The ICC has an average case duration of 26 months. (2020)    No average on the duration of interim relief cases is available online.	The LCIA has an average case duration of 16 months.   No average on the duration of interim relief cases is available online.
Summary/emergency proceedings	Available.   The NAI does not oblige parties to initiate proceedings on the merits in case of interim measures.   The result of interim proceedings is in the form of an arbitral award.	Available.   The ICC obliges parties to initiate proceedings on the merits in case of interim measures.     The result of interim proceedings is in the form of an order.	Available.   The LCIA obliges parties to initiate proceedings on the merits in case of interim measures.     The result of interim proceedings is in the form of an order.
Expedited proceedings	Expedited proceedings are available (as of early January 2024). This can be used to resolve claims. The expedited procedure is the default procedure for claims under 2 million EUR (under NAI Arbitration Rules 2024).	Expedited proceedings are available. This can be used to resolve small claims. The expedited procedure is the default procedure for claims under 3 million USD.	Expedited proceedings are not available.
Scrutiny	The NAI provides a light form of scrutiny for the formal requirements of an award (codified under the 2024 NAI Rules). For arbitration proceedings on the merits, the NAI scrutinises the award within five working days and in summary proceedings within three days after receipt thereof.	The ICC Court scrutinizes awards on points of form and substance.       The ICC Rules do not provide a time frame for scrutiny.	The LCIA does not formally review or scrutinize awards produced by tribunals
Appointment of arbitrators	Party nomination is the standard. Parties may opt for the list procedure provided by the NAI.   If parties fail to nominate, the arbitrator is appointed in accordance with the list procedure.	Party nomination is the standard.    If parties fail to nominate, the ICC Court appoints the arbitrator.	The standard position is that the LCIA Court nominates and appoints the arbitrator.   Parties may agree on party nomination.

3. Our arbitration services

When it comes to arbitration, the NAI offers five different types of proceedings:  

1. Arbitration proceedings on the merits; 

2. Summary arbitral proceedings; 

3. Expedited proceedings; 

4. Small Claims proceedings; and 

5. Appointment of arbitrators in ad hoc proceedings. 

Within the aforementioned, the most important task of the Netherlands Arbitration Institute is to administer the arbitrations. The NAI monitors the arbitral proceedings from the moment that proceedings are commenced until the arbitral award is made and sent to the parties. The NAI performs its work independently, impartially and confidentially. For example, the NAI awards are not made available to third parties for inspection, nor does the NAI provide third parties with information on pending or formerly pending arbitrations. Several awards are published anonymously in the Tijdschrift voor Arbitrage arbitration journal, provided that the parties do not object.  

The key characteristics of each of the proceedings can be found below. 

3.1 Arbitration proceedings on the merits

Arbitration proceedings on the merits involve the administration of justice by arbitrators, who can be viewed as private judges responsible for resolving disputes. Arbitrators must maintain impartiality and independence throughout the process. The arbitral tribunal is composed of an odd number of arbitrators. The parties can agree on the number of arbitrators themselves; however, in the absence of such an agreement, the NAI will determine the number of arbitrators. Additionally, an arbitral tribunal may appoint a secretary to assist with administrative tasks.

Arbitration is an alternative to court proceedings, offering greater flexibility as parties have more control over the course of the proceedings. On average, NAI arbitration proceedings on the merits take approximately 8.8 months from the request for arbitration (request) to the issuance of the final arbitral award (award). This award is binding on all parties involved. Furthermore, an arbitral award can easily be declared enforceable through leave for enforcement granted by the provisional relief judge, granting it the same legal force as a court judgment.

For a detailed schematic overview of the proceedings, go to section 9 of this page. 

3.2 Summary arbitral proceedings

NAI summary arbitral proceedings are comparable to summary proceedings before a Dutch court. Summary proceedings result in an award for provisional relief rather than in a final decision on the merits. Summary proceedings may be requested without any proceedings on the merits having been commenced (independent summary arbitral proceedings) or during pending proceedings. The NAI ensures that arbitrators in summary proceedings make an award within a very brief time limit. The arbitral tribunal shall consist of one independent and impartial arbitrator who is directly appointed by the NAI within one working day of receipt of the request for the summary proceedings. On average, NAI summary proceedings take 38 days from the request to the award.

3.3 Expedited proceedings

In its 2024 Arbitration Rules, the NAI provides for expedited proceedings. In expedited proceedings, the parties receive a final decision on the merits. In this way, expedited proceedings are a form of proceedings on the merits. The key difference is the time frame: on average, the duration of the expedited proceedings is prescribed to take 6.6 months from request to award. Moreover, the arbitral tribunal shall consist of one independent and impartial arbitrator who is appointed via the list procedure.  

Expedited proceedings are not suited for all disputes. The NAI and the arbitral tribunal, once appointed will always look at the nature of the case (the monetary interest of the claims, the complexity of the case etc.) and can decide at any stage of the proceedings whether the case is suited for expedited proceedings. 

3.4 Small Claims proceedings

As a socially committed non-profit foundation, the NAI has a separate arbitral procedure for arbitral proceedings with smaller financial interests. This procedure is referred to as the Small Claims proceedings.  

In that event, the following conditions and rules apply:   

• the monetary interest of the claims is in total less than € 100,000 inclusive of any VAT
• all parties agree to a Small Claims proceedings and sign the additional arbitration agreement which further specifies all the applicable conditions and rules
• all parties involved reside and/or have their registered office in the Netherlands
• The language of arbitration is Dutch
• The place of arbitration is located in the Netherlands

The NAI Arbitration Rules are applicable throughout the procedure, insofar as they do not deviate from the framework of the Small Claims proceedings arrangement. The NAI will determine whether arbitration is eligible for Small Claims proceedings. The number of arbitrators will always be one. The NAI directly appoints one independent and impartial arbitrator. Moreover, the procedures are faster and cheaper than the abovementioned arbitration proceedings. 

3.5 Aviation Disputes & The Hague Court of Arbitration for Aviation

Technical expertise is highly relevant and valued in resolving disputes in certain specialised industries. In July 2022, The Hague Court of Arbitration for Aviation (The Hague CAA) launched at the Farnborough International Airshow in service of the global aviation industry. 

The Hague CAA is seated in The Hague, the Netherlands. The NAI is a founder of The Hague CAA and the sole administrating body for disputes referred to The Hague CAA for resolution under the arbitration and mediation rules of The Hague CAA.   

The Hague CAA offers the global aviation industry deeply specialized arbitration as a fast, fair, flexible and final form of binding dispute resolution conducted before an expert neutral tribunal, in private, pursuant to arbitration rules and procedures specifically tailored to the unique needs of a unique industry.  

Please visit The Hague CAA’s website for more detailed information on the proceedings. 

3.6 Art Disputes & the Court of Arbitration for Art

A joint initiative of the NAI and Authentication in Art led to the founding of the Court of Arbitration for Art (CAfA). CAfA was founded to resolve disputes in the wider art community through mediation and arbitration. 

CAfA is seated in The Hague, the Netherlands. The NAI is a founder of CAfA and the sole administrating body for disputes referred to CAfA for resolution under the arbitration and mediation rules of CAfA.   

The cases will be administered by the NAI and will be heard by arbitrators and mediators who are seasoned lawyers and are familiar with industry practice and issues specific to art disputes. For arbitrations in which forensic science and provenance issues arise, which are often at the core of disputes in the art industry, tribunal-appointed experts will provide neutral expert evidence. Through involving leading industry arbitrators, mediators and experts, CAfA aims to increase the quality of the decision-making and the market acceptability of the outcome of disputes. CAfA further aims to provide cost and time efficient dispute resolution services. 

Please visit CAfA’s website for more detailed information on the proceedings. 

3.7 Disputes in the Healthcare Sector & Arbitration

On Thursday 2 June 2016, several professional and industry associations in the healthcare sector signed a Covenant establishing the Independent Dispute Resolution and Settlement Body for Healthcare Contracting (Onafhankelijke Geschilleninstantie voor Geschillenoplossing en -beslechting Zorgcontractering). The Covenant was then presented to Minister Schippers (VWS) by the signatories. The implementation of the dispute settlement body has been placed with the NAI. 

In the context of healthcare contracting, the NAI offers three forms of dispute resolution: mediation, binding advice and arbitration. A major advantage of these forms of dispute resolution is that the dispute mediators/resolvers can come from within the industry itself. They therefore have all the knowledge of a particular field, unlike the government courts. The procedures are faster and cheaper.

3.8 Arbitration in Curaçao

The NAI also offers fast and effective arbitral proceedings for Curaçao. Parties could choose arbitrators who have experience doing business in Curaçao. Proceedings can take place in any language, including Papiamentu. 

4. Draft a model clause

The NAI offers model clauses to include in your contract. Fill in your preferences and generate your personalized model clause by clicking here.

5. Draft a submission agreement

When a dispute has arisen and parties agree on arbitration as a preferred method of resolution, a submission agreement is the best way forward. The NAI will offer an arbitral submission agreement generator soon. 

6. NAI Arbitration Rules

With its renowned track record, the NAI has well-established, tested and user-friendly arbitration rules. Please find here a link for the user-friendly and easy-to-navigate web version of the 2024 NAI Arbitration Rules.

Furthermore please find below the links to the different versions of the NAI arbitration rules.

7. NAI Rules on the Appointment of arbitrators in ad hoc proceedings

Parties can also agree to the appointment of arbitrators by the NAI in ad-hoc proceedings. If the parties agree to this form of arbitration, the involvement of the NAI ends after the appointment of the arbitral tribunal and the transmission of the arbitration file to the arbitral tribunal. The rules for the appointment of arbitrators in ad hoc proceedings apply. The administration costs owed for the appointment are fixed at € 3000, excluding VAT. The NAI will not determine the hourly rate of the arbitrator or any other payment scheme, and the NAI will not request a deposit from the parties. For the remaining proceedings, if the seat of arbitration lies within the Netherlands, the third section and onwards of the Dutch Code of Civil Procedure applies.

You can find the Rules here.

8. Submit a request for arbitration

NAI arbitration is initiated by submitting a request for arbitration. A request for arbitration can be submitted here (alternatively, a request may be submitted by email). You will be requested to upload (i) the request and (ii) the arbitration agreement as PDF-documents. For the request, you may also use the NAI request for arbitration PDF-form (here). The request should meet the requirements set out in Article 8(2) of the Rules. Article 41 sets out additional requirements for a request for emergency arbitration. In all cases, please specify the monetary interest of the claims as the NAI requires an estimate thereof for the determination of the NAI administration costs due.  

9. Overview of the proceedings

9.1 Proceedings on the merits

9.2 Summary proceedings

10. Cost of the proceedings

10.1 Arbitral proceedings on the merits

The NAI provides a calculator to estimate costs for arbitral proceedings on the merits. This estimation of costs includes the NAI administration costs and the costs of the arbitral tribunal. Costs of the arbitral tribunal are based on an hourly rate and also include disbursements.

The hourly rates of arbitrators and secretaries as of 15 February 2022 can be found here.

10.2 Appointment of arbitrators in ad hoc proceedings

The costs for initiating the appointment of arbitrators in ad hoc proceedings consist of administration costs which are fixed at € 3000, excluding VAT. The NAI will not determine the hourly rate of the arbitrator or any other payment scheme, and the NAI will not request a deposit from the parties.

11. Dutch Arbitration Act

Positioning the Netherlands as an arbitration-friendly jurisdiction, the Dutch Arbitration Act is paramount. Through this link, you will find a useful web version of the English translation of the Dutch Arbitration Act.