Lexology GTDT Market Intelligence provides a unique perspective on evolving legal and regulatory landscapes. This interview is taken from the Dispute Resolution volume discussing topics including Brexit’s impact on choice of law and jurisdiction, market competition and the popularity of ADR within key jurisdictions worldwide.


1 What are the most popular dispute resolution methods for clients in your jurisdiction? Is there a clear preference for a particular method in commercial disputes? What is the balance between litigation and arbitration? What are the advantages and disadvantages of the most popular dispute resolution methods?

In commercial and corporate matters, there are a range of dispute resolution methods. The parties’ preference for a particular option depends on the type of proceedings and the characteristics of the subject matter in issue. As the quality of the Dutch judiciary is highly regarded both nationally and internationally, a large and, until recently, stable number of cases have been litigated before the Dutch courts. The number of commercial matters submitted to the Dutch judiciary showed a material decrease in 2020 in comparison to 2019. Although the trend has been one of a gradual decline, with 2019 as an exception, the current downward trend can most likely be attributed to effects related to covid-19 and we expect that 2021 will, ultimately, return towards the average. Statistics can be misleading, as the number of cases may have fallen, but those that have started are reported to have grown in complexity and duration.

Looking at the statistics for arbitration and litigation of new commercial cases, most cases that do not settle tend to end up with litigation rather than arbitration. Value does not necessarily play a role in this assessment, as high value cases are litigated before the courts and in arbitration (eg Yukos, Petrobras, Steinhoff and previously Fortis). In addition, the Enterprise Chamber of the Amsterdam Court of Appeal remains the go-to forum for company-related matters, such as takeover disputes between bidders and minority shareholders (eg, Altice), squeeze-out proceedings and rare, but impactful, matters regarding compensation to holders of expropriated securities (SNS Reaal). However, commercial matters involving high stake interests tend to become protracted and vulnerable to delaying tactics. Compared to some other jurisdictions, the Dutch system might still be preferable over many of its European counterparts from a timing perspective, but one should expect complicated and high value matters to take at least a couple of years from service to judgment by the court of first instance.

2 Are there any recent trends in the formulation of applicable law clauses and dispute resolution clauses in your jurisdiction? What is contributing to those trends? How is the legal profession in your jurisdiction keeping up with these trends and clients’ preferences? What effect has Brexit had on choice of law and jurisdiction clauses?

In Dutch contracts, Dutch parties generally prefer the applicability of Dutch law, regardless of the preferred dispute resolution mechanism. This is for a good reason, since extensive Dutch case law on the interpretation and application of (commercial) contracts has resulted in an interpretative framework, which consists of a gradual transition from a more flexible approach based on the parties’ intentions to a stricter one, based a more objective interpretation of the contract.

Dispute resolution clauses are often multilayered and regularly contain escalation mechanisms in, for instance, the following order:

  • a limited period in which the parties should engage in amicable discussions;
  • negotiations between members of senior management (including the requirement to meet in person);
  • mediation with explicit reference to names of mediators or a more general selection mechanism; and
  • the appointment of a binding expert determination process, or arbitration or litigation. The expert determination would constitute a binding contractual obligation.

With the creation of the Netherlands Commercial Court (NCC) on 1 January 2019, it has become possible to litigate international commercial matters in English before a specifically designated court, which essentially is a branch of the Amsterdam District Court and the Amsterdam Court of Appeal. Although market parties cherished high hopes of luring matters from London to Amsterdam, this has not yet materialised. It is too early to say that Brexit has resulted in a shift of litigation to the Low Countries. Meanwhile, the situation concerning recognition and enforcement of judgements between the UK and the Netherlands seems a bit unclear, since the EU–UK Trade and Cooperation Agreement of 30 December 2021 contained no alternative for the existing Brussels I bis Regulation (recast). Dutch procedural law does not provide for automatic recognition of UK judgements, potentially meaning that parties will have to fall back to the 1969 bilateral treaty on the mutual recognition and enforcement of judgments in civil and commercial matters until the UK accedes to the Lugano Convention.

3 How competitive is the legal market in commercial contentious matters in your jurisdiction? Have there been recent changes affecting disputes lawyers in your jurisdiction? How is the trend towards ‘niche’ or specialist litigation firms reflected in your jurisdiction?

Disputes lawyers can be found in full-service firms and litigation boutique or niche firms and even as in-house counsel. The more successful full-service firms have rigorously streamlined their character by demerging specialisations offering limited synergies and cross-selling opportunities, and focusing their efforts on blue chip clients and high value matters. Non-essential specialisations have been disposed of.

Other full-service firms have preserved their identity as, for example, the go-to-practice for small and medium-sized enterprises (SMEs), or as the cheaper alternative for big companies’ lower value work. As a result, they might be increasingly unable to attract higher value and challenging work and justify significant hourly rates. To the extent that SMEs form part of the clientele, these firms tend to be more vulnerable. Recent surveys have shown that large numbers of smaller and larger law firms face significant challenges because of the covid-19 pandemic. Government financial rescue has also been used by a significant number of law firms and, since these measures have only provided for temporary relief, the permanent effects may only become visible after these come to an end.

Going boutique is still very much in vogue. This development started 15 years ago with the first IP boutiques and it is still ongoing in an increasing number of areas of law, including insolvency and restructuring, finance, data protection, commercial and corporate litigation. Recently, Birkway, as another litigation-only boutique, has entered the scene with a seasoned team consisting of well-established practitioners. This reflects the overall trend of litigation-only firms setting up shop, with a focus, for example, on commercial and corporate litigation, IP, claimant work and private enforcement of competition mass claims. One of the existing firms, bureau Brandeis expanded with a Paris office and more of this expansionist behaviour might become visible as a sort of response to litigation becoming more multi-jurisdictional.

4 What have been the most significant recent court cases and litigation topics in your jurisdiction?

Two significant matters from the viewpoint of corporate responsibility concern Royal Dutch Shell (RDS). The first one was initiated by an environmental organisation and a number of Nigerian farmers against RDS for damages caused by oil spills in the Niger delta between 2004 and 2007. After accepting jurisdiction in 2015, the Hague Court of Appeal ruled in January 2021 that Shell was liable to the farmers as it failed to demonstrate under the applicable Nigerian law that the oil spills were caused by sabotage. The second matter resulted in the court ordering RDS to cut carbon emissions by 45 per cent by 2030, a decision which will likely incite litigation against large, polluting corporates, both internationally and domestically. These decisions open a new chapter on corporate responsibility: for Dutch parent companies for damages caused by subsidiaries abroad, set new standards for corporate responsibility, and for all large corporates in relation to the environmental effects of their business and the business of suppliers and customers.

Another noteworthy matter relates to the expropriation, on 1 February 2013, of shares and bonds issued by the Dutch bank and insurance company SNS Reaal. This expropriation took place against the backdrop of the financial crisis, when SNS Reaal threatened to collapse, which, at the time, was perceived as a systemic risk. For years, the Dutch state had argued that no compensation was due as no value had been lost to the bondholders and shareholders as the company was facing bankruptcy. However, in February 2021, the Enterprise Chamber of the Amsterdam Court of Appeal awarded €800 million plus legal interest, being the difference between the amount that the bondholders would have received in case of bankruptcy and the amount they received in the nationalization process. The shareholders, who would not have received anything in a bankruptcy, received no compensation. This matter is the first of its kind.

Finally, another noteworthy matter is the litigation between Grandvision and EssilorLuxottica on the takeover of Grandvision by Essilor. Due to the economic situation caused by the covid-19 pandemic, Grandvision was forced to take precautionary measures that, according to Essilor, would have contravened the covenants under the merger contract. Although arbitration is running, Essilor argued that Grandvision failed to continue to operate its business in an ordinary manner during the covid-19 pandemic. Essilor argued that Grandvision failed to properly inform them of this and made an attachment on sensitive company information to prove its point. Both the District Court and the Amsterdam Court of Appeal, however, denied Essilor’s request to review this information, once again demonstrating the relatively limited possibilities in Dutch style discovery proceedings, especially if disclosure arrangements have specifically been stipulated in the takeover documentation. Nevertheless, the matter is an interesting example of covid-19-related litigation, of which more fallout can be expected in the coming years.

In terms of value and international exposure, Yukos keeps dominating the landscape, but we discuss this matter in more detail under question 7.

5 What are clients’ attitudes towards litigation in your national courts? How do clients perceive the cost, duration and the certainty of the legal process? How does this compare with attitudes to arbitral proceedings in your jurisdiction?

Apart from a number of exceptions, from an international perspective, court fees and adverse cost risks are considered hardly material in major commercial disputes. The exceptions are to be found in IP-infringement cases, in matters brought before the NCC. Lastly, the situation will be different in cases brought under the new collective actions regime, as claimants can claim for compensation of their expenses, including their liabilities to litigation funders. This provision is asymmetric, as claimants can be fully reimbursed in the event of success while defendants can only receive limited compensation in the event of frivolous litigation.

As pointed out, larger commercial disputes tend to take longer and this is usually perceived as a nuisance. On the other hand, clients with experience in pursuing disputes all over the globe consider the Dutch judiciary reliable and knowledgeable, relatively swift and affordable.

Still, proceedings in summary proceedings and regarding corporate disputes with the Enterprise Chamber offer viable routes for parties seeking clarity at short notice (within up to three months and sometimes even days). These type of proceedings generally tend to be ‘predictive’ to the outcome in litigation on the merits and this short-term clarity can therefore be helpful against the background of settlement attempts as well.

6 Discuss any notable recent or upcoming reforms or initiatives affecting court proceedings in your jurisdiction.

A noteworthy and long-expected development concerned the change of the Dutch legislation on collective actions. The Netherlands has had a collective actions regime since 1994 and it changed with effect as of 1 January 2020. As of that date, it has become characterised by the following features:

  • applicability in all areas of law;
  • collective actions for damages are allowed for matters concerning events that took place as of 15 November 2016 or commenced before and continued after that date (matters regarding events before that date will be covered by the former regime which only allows for a declaratory judgment);
  • the action can be initiated only by foundations or associations that meet certain criteria in terms of the formulation of their articles of association and their activities, governance and funding capability, if the collective interests are similar and the protection of the collective interests by the organisation are sufficiently guaranteed;
  • the non-profit entities can be pre-existing or ad hoc established;
  • during the certification phase, a lead claimant will be appointed if there are multiple competing candidates; and
  • there is a combined opt-out (for Dutch claimants) and opt-in or opt-out (for non-Dutch claimants) regime.

This revision marks an important change because, until the end of 2019, a foundation or association could only pursue proceedings with a view to getting a declaratory judgement on the defendants’ liability. This was possible for claims under all areas of civil law. However, it was not permitted to claim collectively for damages under this regime.

It remains possible to have settlement agreements court-approved under the Dutch Act on Collective Settlement of Mass Damages Claims. As a result, the settlement will become effective on all affected parties included within the scope of the settlement agreement who, following announcement of the court’s decision, may elect to opt out. As it concerns a Dutch court decision, it is recognised and enforceable in all member states to the Brussels I-bis Regulation. Notable settlements that have been approved in this manner include Ahold, Converium, Shell and, in 2018, the €1.3 billion settlement concerning Fortis, the largest settlement of its kind in Europe. This element has been preserved and, in the context of the recent legislative change, the district court will promote settlement negotiations between the litigants and, if successful, be in the position to declare this settlement generally binding.

7 What have been the most significant recent trends in arbitral proceedings in your jurisdiction?

Recently, there have been a number of court decisions in relation to the enforcement of a Stockholm Chamber of Commerce arbitral award against the state of Kazahstan, but by far the most significant arbitration matter conducted in the Netherlands is the Yukos arbitration before the Permanent Court of Arbitration. Although the arbitral decision was rendered a few years ago, litigation regarding the validity of this decision is still pending.

The Yukos arbitration resulted in the largest award ever in arbitral proceedings and relates to the bankruptcy of Yukos Oil and its subsequent expropriation by the Russian state in the early 2000s. Yukos’ international assets comprised two branches of the former oil company: the treasury group and the finance group. In 2005, during the Russian authorities’ attack on Yukos, Yukos’ management decided to insert a Dutch foundation into each of the finance and treasury branches of the company. Both the Russian bankruptcy order and the investment arbitration regarding the expropriation have resulted in a number of important court decisions.

The expropriation resulted in three awards, ordering the Russian state to pay US$50 billion in damages to former shareholders of Yukos (currently US$57 million including costs and interest). On application by the Russian state, the District Court ruled that the arbitral award was invalid. This decision was, however, overturned in February 2020 by the Court of Appeal, deciding that the arbitral clauses in an energy treaty from 1998 ought to be honoured. The purpose of this treaty was to protect investments in mid and eastern Europe. The Russian state then lodged an appeal with the Netherlands Supreme Court. Although the decision is still pending, the Supreme Court’s attorney general, advised to leave the Court of Appeal’s decision intact, so the saga continues. The Yukos matter is another example of the internationalisation of Dutch court litigation with political ramifications.

8 What are the most significant recent developments in arbitration in your jurisdiction?

Apart from the recent developments in the Yukos saga, it is worth pointing to the recent publication of an English commentary to the Dutch Arbitration law and arbitration awards (Albert Marsman, International Arbitration in the Netherlands) as it forms a useful manual on all things Dutch in arbitration.

One ongoing development highlighted in the previous edition of this guide concerns the increasingly international dimension of court and arbitral cases. In part, this is a logical result of the relatively large number of Netherlands-based top holdings and (financing) entities of foreign companies. These local entities are frequently included in proceedings as anchor defendants. Also, Dutch structures are sometimes used as a protective shield, as highlighted by the Yukos case, discussed in question 7.

Additionally, international parties, including those from countries with a less accessible judiciary, opt to pursue litigation and arbitration in the Netherlands as it is known for its relatively affordable proceedings and reliable judiciary.

9 How popular is ADR as an alternative to litigation and arbitration in your jurisdiction? What are the current ADR trends? Do particular commercial sectors prefer or avoid ADR? Why?

Several applications of ADR are on the rise. Mediation is increasingly embedded in state court proceedings as sitting judges in hearings raise the opportunity of settlement negotiations through mediation. Also, some of the district courts are experimenting with the application of mediation in insolvency matters. This also happens with a view to preventing unnecessary insolvency proceedings and, in light of measures in response to the covid-19 pandemic, this alternative is likely to draw even more attention.

However, it appears that some policymakers in the administration of justice are already in favour of mandatory referrals to mediation. Although mediated solutions generally take place behind closed doors, it is well known that mediation plays a very important role in high value disputes. For instance, the negotiations preceding the Fortis settlement, discussed in question 1, involved US style ex parte mediation.

From these developments, it appears that a mediation-infrastructure is evolving in the Netherlands. The enthusiasm for mediation among private parties seems to be growing. Of particular interest seems the role of the Netherlands Measurement Institute (NMI) as a national umbrella organisation concerned with quality assessment and benchmarking, sitting above various specialised mediation institutes and professional associations of mediators. This structure may be interesting for the development of cross-border mediation in the nearby feature. Such cross-border mediation will depend on the existence of national clearing houses, such as NMI. This is borne out clearly by the European ADR Model Rules, which seek to facilitate cross-border mediation in Europe, using national clearing houses as a starting point. Also, the Ministry of Justice retains a firm interest in mediation, although it is sometimes suspected of promoting mediation out of budgetary considerations.

10 What is the position in relation to litigation funding in your jurisdiction? Is funding available? Have there been any significant developments in this area in your jurisdiction?

Third-party litigation funding is allowed, accepted and increasingly used in the Netherlands in personal injury matters, where no win no fee arrangements for lawyers acting for individual clients are allowed and in relation to mass claim dispute resolution. This applies both in collective actions and in procedures using the assignment model. Third-party funding is also used in high profile commercial disputes, often involving the enforcement of arbitral or judicial awards. Third-party funders financing mass claims seem to be subject to closer scrutiny than those funding single disputes in terms of capital requirements and exercising control over the proceedings. Unlike most other jurisdictions, in collective redress the (reasonable) fee of the funder can be recovered on top of the awarded damages and other costs related to the proceedings.


The Inside Track

What is the most interesting dispute you have worked on recently and why?

Instead of a single dispute, we would mention the three pending cases under the new collective actions regime against Volkswagen, Daimler and Fiat Chrysler and several co-defendants. The matters all concern the car manufacturers’ roles in the diesel emissions scandal. They are noteworthy because the litigation is pending in many jurisdictions and is filed under the new Dutch collective damages action regime. The pending matters are expected to set some interesting precedents for the future for example in terms of the international jurisdiction of Dutch courts, judicial case management of this type of dispute and damage calculation in aggregated litigation.

What do you consider to have been the most significant legal development or change in your jurisdiction of the past 10 years?

The introduction of the Dutch Act on Collective Settlements in 2005 and its interpretation by the judiciary in international matters has put the Netherlands on the global dispute resolution map for defendants willing to obtain ‘global peace’ via court approved collective settlements. The introduction of the Netherlands Commercial Court in 2019 should be seen in line with the wish of the Dutch judiciary to play a role in global dispute resolution. Although its effects remain to be seen, the 2020 collective actions regime has the ambition to promote access to justice in many areas where private enforcement and adequate legal protection were lacking due to, for example complexity, inequality of resources between the parties and the limited size of the individual damages. As a result, we expect litigation in relation to consumer and data breach matters to be on the rise.

What key changes do you foresee in relation to dispute resolution in the near future arising out of technological changes?

Covid-19 will undeniably leave a permanent mark on both the national and international litigation landscapes. The pandemic has demonstrated how technology can play a critical role in efficient and low cost running of litigation. This has manifested itself in online court hearings and online business meetings as well as mediations. Although the Netherlands is fairly advanced in using technology in law, the pandemic has accelerated the process. Furthermore, we expect that the case law referred to above will develop an adequate framework to deal with mass claims.