1. What is binding advice and a binding advice agreement
Binding advice is a form of alternative dispute resolution based on Article 7:900 of the Dutch Civil Code. This entails that Dutch law needs to be the law applicable to the contract. The decision is considered binding between parties. Binding advice comes in two different forms: declaratory (zuiver) and adjudicatory (onzuiver) binding advice or rather binding advice without a legal dispute and binding advice in a legal dispute. In the first form, the parties agree to leave the determination of their undetermined or partially determined legal relationship to a third party to whose judgement they commit themselves in advance. In the second form, a third party gives a binding decision on behalf of the parties in a legal dispute between them. The NAI administers both forms of binding advice. The NAI Binding Advice Rules 2015 offer adjudicatory binding advice, while the NAI Rules for the appointment of a binding advisor in ad-hoc proceedings 2015 offers declaratory or adjudicatory binding advice, depending on the wording of the binding advice agreement.
2. Binding advice services
When it comes to binding advice, the NAI offers two different types of proceedings:
- Binding advice proceedings; and
- Appointment of binding advisors in ad hoc proceedings.
Within the aforementioned, the most important task of the Netherlands Arbitration Institute is to administer the binding advice. The NAI monitors the binding advice proceedings from the moment that proceedings are commenced until the binding advice is made and sent to the parties.
The NAI performs its work independently, impartially and confidentially.
The key characteristics of each of the proceedings can be found below.
2.1 Binding advice proceedings on the merits
Binding advice proceedings on the merits is a form of administration of justice by binding advisors. Binding advisors can be viewed as private judges in the way that binding advisors decide on the dispute to be resolved in binding advice. Binding advisors must be impartial and independent. The parties may agree on a number of binding advisors themselves, in the absence of which the NAI will determine the number of binding advisors. A binding advisor’s secretary may be appointed to assist the binding advisor with administrative tasks.
Binding advice replaces proceedings before the court. Binding advice is more flexible in the sense that the parties have more ownership over the course of the proceedings. The binding advice which is given is binding on all parties. However, unlike an arbitral award, binding advice is enforced through the enforcement of specific performance under the agreement. The court may perform a limited judicial review of the binding advice.
For a detailed schematic overview of the proceedings, go to section 7 of this page.
2.2 Disputes in the Healthcare Sector and Binding Advice
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. For more detailed information on the proceedings go to Overzicht Zorgcontractering.pdf (nai-nl.org).
3. 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.
4. 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 correct way forward. Generate your personalized submission agreement below.
5. NAI Binding Advice Rules
The NAI Binding Advice Rules and commentary provide a comprehensive framework for a successful procedure. Click the link below for a clear presentation of the NAI Binding Advice Rules and commentary.
6. NAI appointment of a binding advisor in ad hoc proceedings
Parties can also only agree to the appointment of a binding advisor by the NAI. Should the parties agree to this form of binding advice, the involvement of the NAI ends after the appointment of the binding advisor and transmission of the file to the arbitral tribunal. The rules for the Appointment of binding advisors in ad hoc proceedings apply. Noteworthy differences in comparison to the binding advice proceedings under the Binding Advice Rules are that the administration costs owed are fixed at € 3000 excluding VAT, that the NAI will not determine the hourly rate of the binding advisor or any other payment scheme and that the NAI will not request a deposit from the parties. Click here for the Rules.
7. Submit a request for binding advice
NAI binding advice is initiated by submitting a request for binding advice. A request for binding advice can be submitted here (alternatively, a request may be submitted by email). You will be requested to upload (i) the request and (ii) the binding advice agreement as PDF-documents. You may also use the NAI request for binding advice PDF-form (link). 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.
8. Overview of the proceedings
9. Costs of the proceedings
The NAI provides a calculator to estimate costs for an upcoming proceeding. This estimation of costs includes the NAI administration costs and the costs of the binding advisors. Costs of the binding advisors are based on an hourly rate and also include disbursements.
The costs for initiating the appointment of binding advisors 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 binding advisors or any other payment scheme, and the NAI will not request a deposit from the parties.