Litigation in the Netherlands: Interesting Option in Challenging Times
Bart-Adriaan de Ruijter and Simon Polkerman, of the law firm CMS, briefly outline litigation in the Netherlands, and how disputes are managed from a legal perspective.
Introduction: challenging times with rising conflicts
There are challenging times in the global economy, with accumulation of uncertain factors in the aftermath of the COVID-19 crisis, such as the current wars and rising inflation, ESG transition costs, and interest rates. In the last period there has been a significant rise of bankruptcies throughout Europe and the US. These uncertainties give rise to conflict of interest between companies, which result in disputes and, if not managed, litigation.
Going Dutch: unique legal facilities for efficient and balanced dispute resolution
The Netherlands offers a favourable legal environment for businesses involved in complex litigation. Because a lot of multinationals have holding companies and related assets, this can be an option.
Dutch courts are impartial, reliable, and relatively inexpensive. The Netherlands ranks seventh out of 142 in the overall WJP Rule of Law Index, and third out of 142 in the Index for Civil Justice. There are a number of reasons why the Netherlands is an attractive jurisdiction for litigation, such as the prompt and expert handling of cases.
The Netherlands have unique legal facilities, including the possibility of prejudgment attachments, efficient dispute resolution in English in commercial disputes, a balanced collective claim system, and good enforcement in international matters.
- Under Dutch law, it is relatively easy to vest prejudgment attachments (conservatoir beslag) with respect to third-party assets in the Netherlands before and pending Dutch or foreign proceedings for the purpose of safeguarding recovery of a claim. The court decides without the debtor being heard (ex parte)within a couple of days. Upon the court’s authorisation of the prejudgment attachment, the creditor is required to initiate the main proceeding against the debtor within a specific period determined by the court. In addition, once it has been placed, a prejudgment attachment is difficult to lift. Because a prejudgment attachment is easy to obtain, this provides a valuable safety net to ensure claims are secured.
- Another Dutch perk is the opportunity for companies to submit a dispute to the Netherlands Commercial Court (NCC) for efficient and innovative dispute resolution, which is a specialised court for complex commercial disputes handled in English. This is a very cost-efficient alternative for other international venues with optimal enforcement due to international treaties.
- Moreover, the Netherlands have an unique balanced class-action system and economy around it. That makes it an interesting place for investors and law firms to file their collective claims. On the other hand, it is also an interesting venue for the defending multinational to have a balanced and reliable outcome.
Not only the conduct of proceedings, but also the enforcement of arbitral and foreign judgments is efficient and effective in the Netherlands. As the Netherlands is party to the New York Convention, foreign arbitral awards can be easily recognised and enforced. European judgments can be directly recognised and executed in the Netherlands.
Proactive strategy to optimise dispute risk management
In complex international disputes, the strategy and ideal use of the advantages of international jurisdictions, such as the Netherlands, is decisive. Therefore, a proactive approach in this respect is advisable. The combination of reliable and efficient courts and favourable procedural options makes the Netherlands a valuable choice for companies involved in disputes. To avoid and mitigate risks, litigation attorneys should be engaged at an early stage.
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