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ALTERNATIVE DISPUTE RESOLUTION IN THE NETHERLANDS

By: Karel Frielink, Attorney
Spigthoff Attorneys & Tax Advisers

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Biography of the Author

Court proceedings are time consuming and cost a lot of money. Furthermore, Court decisions do not always offer an acceptable solution. It is for that reason that more and more parties choose another form of conflict control: alternative dispute resolution (ADR). As a concept, ADR in the Netherlands comprises arbitration, binding advice and mediation.

Arbitration is a form of dispute resolution that is strongly institutionalized and incor­po­rated in legislation. Arbitration proceedings lead to a judgment that can be enforced by recourse to the courts. The binding advice given by a conciliation board (e.g. the consumer conciliation board, the Dutch Securities Institute conciliation board) is not a judgment. The binding advice can if necessary be made enforceable by recourse to the court following a marginal substantive and procedural review. Mediation is a method of reaching resolution of disputes without recourse to judicial procedures. An independent expert supports the parties in their negotiations until a mutually acceptable solution is found.

Mediation assumes the neutrality of the mediator and the autonomy and equality of the parties. They retain control and they themselves work towards a solution. In contrast to judicial procedures, where the differences between the parties are enlarged, mediation aims at seeking solutions in the mutual interest of the parties. Decisions that are arrived at in this manner appear to be more durable. Mediation improves the communication between the parties and may encourage them to adopt a more co-operative approach in their future dealings.

Source: http://www.adrinstituut.nl

The Netherlands Mediation Institute

 

The Netherlands Mediation Institute (NMI) is an independent institution established in 1995. It promotes the use of mediation for the settlement of disputes by parties them­selves with the aid of an independent third person, the mediator. The NMI maintains a register of mediators. Only mediators who have followed a mediation training course approved by NMI are eligible for listing in the register.

 

During a mediation certain rules are observed. These have been set down in the NMI-Mediation Rules 1995. The mediator is jointly appointed by the parties. If the parties are unable to reach an agreement, the NMI will make a proposal. The parties are required to reimburse the NMI for administrative costs. Also, the parties have to pay the fee and any other expenses of the mediator.

 

Each mediation takes place on the basis of voluntariness and non-commitment of all parties involved. This means that each party, as well as the mediator, at any time has the right to withdraw from the mediation. A successful mediation is concluded upon the parties’ signing of a settlement agreement in which the agreement reached is recorded. Such agreement is legally binding.

 

Secrecy and confidentiality are two essential characteristics of mediation, avoiding dama­ging public conflict. Consequently, during the mediation, parties can exchange ideas freely, orally as well as in writing. All persons present at the mediation are bound by the rules of secrecy and confidentiality.

 

Mediation can take place between two or more parties. Unlike judges and arbitrators, the mediator does not render a decision. He acts as a facilitator and mediator between the parties. He guides them in such a way that the parties themselves can solve the business and practical side of their dispute. Consequently, that resolution can turn out differently (for example more practically oriented or creative settlement which a court cannot im­pose) than a judgment rendered by a judge or arbi­trator. Also, mediation can effect­ively deal with all sorts of disputes, including disputes of a non-legal nature.

 

Due to their active role in settling their own dispute, the parties feel involved throughout the process. The parties and the mediator mutually determine how the mediation will be handled, so that the process has an informal character. Because of its flexible and infor­mal character, mediation generally leads to a quicker solution of a dispute than would be the case in a conventional proceeding (court or arbitration).

 

If the parties do not succeed in solving their dispute by mediation, they can still refer it to a judge or arbitrator; much can be gained as a result of greater mutual understanding about the dispute.

 

Source: http://nmi-mediation.nl

 

 

The Netherlands Arbitration Institute

 

The Netherlands Arbitration Institute (NAI) aims to promote arbitration as a means of settling disputes. As an independent organization, the NAI provides trade and industry with a well-organized arbitral procedure. The NAI was founded in 1949 as an indepen­dent, non-profit organization. The NAI has no connection with the government, nor does it receive any subsidy.

 

The NAI is the only general arbitration institute of the Nether­lands. Other arbitration institutions in the Netherlands cover specialized areas of domestic and international trade and industry, including oils, fats and oilseeds, flower‑bulbs, grain and feed trade, coffee trade, sports, services, and consumer affairs.

 

The NAI’s Arbitration Rules form the basis for pursuing said goal. They include the text of an arbitration clause which can be incorporated in all business agreements. The parties thereby agree that in the event of a disagreement the arbitration will be administered by the NAI in accordance with a previously established procedure.

 

Arbitration in the Netherlands is a true alternative to dispute resolution by courts of law. It should be noted that parties need not be Dutch to have their disputes resolved by arbitra­tion in the Netherlands, making it an attractive forum to foreign parties.

 

The Dutch rules on arbitration are incorporated in the Code of Civil Procedure. The chapter on arbitration consists of two titles. Title one deals with arbitration in the Netherlands. Title two contains provisions governing arbitration outside the Netherlands. Section 1 of the Arbi­tration Act contains provisions of a more general nature regarding the availability of arbi­tra­tion, the appointment of one or more arbitrators, and the commencement of the procee­dings. Arbitration is possible both for disputes that have already arisen and for disputes that may arise in the future. If there is an agreement between parties to submit their disputes to arbitration, the ordinary courts must declare that they lack jurisdiction over the same dis­pute, if the defendant invokes the existence of the arbitration agreement before raising other defenses.

 

The proceedings must be conducted in the manner agreed between the parties or, to the extent that the parties have not agreed, determined by the arbitral tribunal. There are in the Netherlands more than one hundred arbitral institutions, of which approximately thirty to thirty‑five are presently active. Most of these institutions have their own rules of arbi­tra­tion procedure, like the NAI. Many provisions of the arbitration law are not mandatory and the rules of the various arbitration institutes thus create their own procedural regime.

 

The Netherlands is a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Arbitral awards rendered in the Netherlands are therefore generally enforceable in most of the industrialized countries in the world, including most Western European countries, Japan, and the United States of America, and in an increasing number of developing countries.

 

If the parties have agreed that their disputes will be settled in accordance with the rules of an arbitration institute outside the Netherlands, but notwithstanding such agreement proceedings are initiated before a court in the Netherlands, said court shall declare that it lacks jurisdiction. A party must invoke the arbitration agreement before submitting any other defense, and the arbitration agreement must be valid under the laws applicable to it, which will not necessarily be Dutch law. An agreement to arbitrate abroad does not preclude a party from requesting a Dutch court to grant interim measures of protection, such as attachment or garnishment, or from applying to the preliminary relief proceedings judge of the district court.

 

As well as arbitration, the NAI also has a structured form of mediation which has its own rules: the Minitrial Rules.

 

NAI Minitrial is a form of ADR. The main feature of this type of dispute decision is that parties can try to reach a settlement with the assistance of a mediator and thus resolve their own problems. If parties are unable to reach a settlement, the dispute will have to be settled by arbitration or by the courts. The willingness of the parties to seek a decision will determine the success of alternative dispute resolution.

 

The main advantages arising from the incorporation of the NAI Minitrial agreement in a contract are as follows:

-          Parties agree to Minitrial proceedings before any dispute occurs

-          The clause can be included in national and international agreements

-          Minitrial proceedings will be conducted on a confidential basis and will not be made public

-          The mediator will ideally be chosen by the parties

-          The NAI can also propose an experienced and expert mediator

-          Minitrial is more economical in terms of time as well as costs

 

Source: http://www.nai-nl.org