THE ENFORCEMENT OF FOREIGN ARBITRAL AWARDS IN THE NETHERLANDS
Sub a of the BIMCO Standard Dispute Resolution Clause 2017 starts with: ‘This Contract shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London [..]. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) [..]’.
Parties to a standard BIMCO time, voyage, slot or bareboat charter often opt for sub a, even where the Owners and Charterers are not based in England. Once a claim is awarded, and the Respondent does not voluntarily comply with the Arbitral Award or the Claimant is, depending on the conditions, entitled to demand payment under a guarantee (e.g. the Rotterdam Guarantee Form 2008) or security deposit, the Claimant may wish to proceed with the enforcement of the Arbitral Award against assets of the Respondent outside the country of its Seat Of Arbitration. In the Kingdom of the Netherlands leave to enforce the Arbitral Award must be granted by the ‘exequatur’ court. The following is an outline of various aspect relating to the exequatur procedure of foreign Arbitral Awards in the Netherlands.
General comments on the exequatur procedure on foreign Arbitral Awards
A distinction must be made between (I) an Arbitral Award rendered in a foreign State to which a treaty concerning recognition and enforcement is applicable (e.g. the New York Arbitration Convention 1958) as mentioned in article 1075 Dutch Code of Civil Procedure (DCCP) and (II) when no treaty concerning recognition and enforcement is applicable (article 1076 DCCP).
The New York Arbitration Convention 1958 (Convention) contains regulations regarding the recognition and enforcement of Arbitral Awards. It follows from Art. III of the Convention that: ‘There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.’. The ‘onerous conditions’ mentioned in art. III do not relate to the substantive provisions for recognition and enforcement (these are determined solely by the Convention itself), but concern procedural provisions on recognition and enforcement, according to the Dutch Supreme Court.
For an application to which no treaty is applicable these provisions can be found in article 1076 DCCP.
Furthermore, for both grounds most of the formalities required for the enforcement procedure of foreign judgements (Article 985 et seq. DCCP) and the conditions for the contents of a petition in general (Article 261 et seq. DCCP) apply.
It is recommended to invoke both grounds in the application for an exequatur. The application for an exequatur must be submitted by a lawyer with rights of audience before the Dutch courts. The Dutch Court of Appeal is subject-matter competent to hear the application for an exequatur of a foreign Arbitral Award. The application can be challenged by the respondent (Articles 1065 sub 1, 1068 sub 1 and 1056 DCCP). If the Respondent fails to appear in the exequatur procedure, the summons shall be served by a bailiff. The applicant shall furnish the court before or at the hearing with written evidence that the summons has been served.
Ex articles IV sub 1 of the Convention and 1076 sub 1 DCCP the application must be accompanied by a duly authenticated original award or a duly certified copy thereof and the original Arbitration Agreement or a duly certified copy thereof.
Koksokhimtrans LTD versus Cool Consultancy B.V.
A dispute arose between a Dutch company and a Russian company concerning damage suffered under a Charterparty. The Charterparty provided for English law and arbitration. Arbitration proceedings were commenced in accordance with the terms of the Charterparty. The Dutch Charterers did not make an appearance in the arbitration proceedings. After the claim was awarded against the Dutch Charterers, the Russian company (the Applicant) had requested, pursuant to Article 1076 DCCP, leave to enforce the English Arbitration Award in the Netherlands. The Dutch Charterers did not make an appearance in the exequatur procedure.
After the petition was filed, the Court of Appeal ’s-Hertogenbosch gave the Applicant the opportunity to provide (I) a duly authenticated original or a certified copy of the Arbitration Award as well as (II) a statement that the printed email exchange, which contained the alleged Arbitration Agreement, was authentic and complete. The Applicant failed to fulfil the latter condition. In its final decision, the Court of Appeal found that the Arbitral Award was the original Arbitral Award. However, the Court of Appeal rejected the application, because it was not able to determine whether the printed email exchange was authentic and complete. The Court of Appeal considered as follows. The Applicant submitted an affidavit from an employee who worked in the IT department of the law firm that handled the case on behalf of the Applicant. According to the Court of Appeal, this was not an independent IT expert. Furthermore, the employee’s statement was conditional in nature and did not exclude manipulation of the email which contained the alleged Arbitration Agreement. In addition, no explanation was given for the time difference between the time of sending and receiving of the email in the matter at hand and which contained the alleged Arbitration Agreement. According to the Court of Appeal, the methodology proposed in the ‘International Council for Commercial Arbitration’s 2011 ICCA’s Guide to the Interpretation of the 1958 New York Convention: a Handbook for Judges’ had not been complied with. The Court of Appeal was not able to determine that the signatures were electronically reliable and that there had been an effective exchange of electronic communication between the parties. Therefore the Applicant failed to provide evidence to the Court of Appeal that there was a valid Arbitration Agreement between the parties and the Court of Appeal rejected the application. Despite an appeal, the decision of the Court of Appeal was upheld by the Dutch Supreme Court.
Conclusions
The conditions for enforcement need to be strictly adhered to when seeking enforcement in the Netherlands of foreign Arbitral Awards. An Arbitration Agreement concluded by email does not mean that there is an invalid Arbitration Agreement between the parties. However, the court may request the Applicant to prove that the email communication in which the arbitration was agreed between the parties is authentic and complete. It is recommended to safeguard the original Arbitration Award and the original Arbitration Agreement (contained in the standard BIMCO time, voyage, slot or bareboat charter agreement). The Arbitration Award must be duly authenticated in order to prove its authenticity. In case the Arbitration Agreement is contained in an email exchange, it must be shown that the email exchange is authentic and complete (e.g. by means of a statement of an independent IT expert).
For more information, please contact:
DAAN KOMEN
Telephone : +31 10 217 77 20
Mobile : +31 6 37 47 05 56
Email : komen@caland.nl
Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice and no rights can be derived from it.
