Parties can initiate main proceedings or summary proceedings, but arbitration can also be an option.
What is arbitration?
Arbitration is jurisdiction through arbitration, sometimes called arbitrators. Arbitration is regulated by law. The starting point is that arbitration is (roughly) the same as legal proceedings. The question then is why and when should you choose for arbitration?
In some cases, there is no (valid) choice for arbitration and one has to go to court.
What are the benefits of arbitration?
The main argument for arbitration is the arbitrators’ specific knowledge and skills. For example, there are many arbitrators with specific expertise, such as the Arbitration Board for Construction. However, it may also be better in other cases to appoint arbitrators to settle a dispute, namely in specific disputes about companies.
Another major benefit is that arbitration takes place on a confidential basis and that the arbitration procedure is not open to the public. A judgment of the ordinary court is (almost always) public and this is unfavorable for some companies. These judgments are published on the Internet and can cause unwanted adverse media attention.
In addition, arbitration is more flexible than litigation in ordinary courts. Numerous agreements can be made in an arbitration agreement. For example, appeals can be ruled out, agreements can be made about the number of arbitrators (usually three, sometimes one), agreements can be made about costs. Although that is not always the case, arbitration is also perceived as less confrontational, in the sense that certain trading parties continue to do business despite the arbitration.
What are the disadvantages of arbitration?
An important disadvantage of arbitration is the cost aspect. The dispute to be settled often involves specialist matters, whereby arbitrators are appointed who work on the basis of a specific hourly rate. Judges do not have an hourly rate. Although litigation is expensive, litigation costs in ordinary courts in the Netherlands (compared to other countries) are relatively limited. However, in the case of arbitration, a court costs order can be very significant.
In principle, arbitration proceedings are no different from proceedings in court. However, there are separate procedural rules for arbitration. Many of these aspects correspond to the rules that are laid down in our Code of Civil Procedure. It is (for example) even possible to start summary arbitral proceedings if there is sufficient urgent interest.
Arbitration proceedings normally begin with a request for arbitration, after which written statements (written documents containing the views of the parties) are exchanged.
Lawyer specialized in arbitration
Unlike in court, a lawyer is not required in arbitration proceedings. However, it is common for the procedures – because of the interests – to be conducted by lawyers. It is advisable to have any clause in which you want to include arbitration tested by a lawyer. It often happens that in a conflict, parties (or one of the parties) are less happy with the arbitration clause/arbitration agreement.
If you have any questions about arbitration, please contact Jasper Hagers, our arbitration lawyer.