Artikel W.J.L. de Clerck, ‘Uitgestelde werking van de nieuwe arbitragewet: pleidooi voor een eenvoudige(r) lezing van het overgangsrecht’, in: R. de Graaf en D.F.H. Stein (red.), Het pleit beslecht. Opstellen ter gelegenheid van het 210-jarig bestaan van het genootschap Iustitia & Amicitia, Den Haag: Boom Juridisch (2020).
Earlier this week an interim decision of the The Hague Court of Appeal of 8 September 2020 was published, issued in enforcement proceedings between a Dutch ConocoPhillips entity as applicant and the Venezuelan state oil and gas company and one of its subsidiaries as respondents. The decision is perhaps unremarkable insofar as the court refused to hear the petition ex-parte until the requirements of the Hague Service Convention (1965) (“Convention”) on completion of service are fully complied with. However, the decision also shows that there is room to optimise the proceedings before the Dutch courts and gain time in cases where obtaining proof of service on the award debtor is likely to be very difficult.
The Dutch proceedings were initiated by ConocoPhillips Gulf of Paria B.V. on 3 December 2019, when it filed a petition with the Court for recognition and leave to enforce a USD 31.5m ICC award issued against Petróleos de Venezuela S.A. and Corporación Venezolana de Petróleo S.A. Following receipt of the petition, the Court scheduled a hearing for 2 July 2020 and instructed ConocoPhillips to serve the hearing date on the respondents at least four months prior thereto. Neither Petróleos de Venezuela nor Corporación Venezolana de Petróleo appeared at the hearing. ConocoPhillips had submitted service documents prior to the hearing, which evidenced that service had been initiated timely and correctly out of the Dutch jurisdiction, but was unable to submit the certificate of service and delivery to be issued under the Convention in the prerequisite form by the designated Venezuelan “central authority”. In this case the certificate was the only document with which ConocoPhillips could substantiate that service had been completed in accordance with the Convention. Transmission via postal channels was unavailable by virtue of the formal objection made thereto by Venezuela.
Decision on article 15 (2nd paragraph)
The Court was thus presented with the question whether it could proceed to hear the petition in the absence of the respondents under article 15 (2nd paragraph) of the Convention, which is applied by the Dutch courts pursuant to a formal declaration made by the Dutch State under the Convention. Article 15 (2nd paragraph) provides for an exception to the rule that service must be completed in accordance with the Convention before a Dutch court may proceed on an ex-parte basis. A three-limb test is to be performed: a) the document was transmitted by one of the methods provided for in the Convention; b) a period of time of at least six months, considered adequate by the judge in the particular case, has lapsed since the date of the transmission of the document; and c) no certificate of any kind has been received, even though every reasonable effort has been made to obtain it through the competent authorities of the State addressed.
With reference to a 2019 interim decision of the Amsterdam Court of Appeal on article 15 (2nd paragraph) in enforcement proceedings between state energy companies Naftogaz of Ukraine and Gazprom of the Russian Federation, the court held that ConocoPhillips was in any case not able to meet the second limb of the test i.e. that a period of at least six months has lapsed since the date of the transmission of the service documents and the hearing. The time period between the date of service out of the Netherlands (28 February 2020) and the hearing (2 July 2020) was four months and two days. The court dismissed an alternative interpretation of the Convention provided by ConocoPhillips, being that the six month period provided for in article 15 (2nd paragraph) would extend beyond the date of the hearing to the (expected) date of issuance of the court’s decision. The court went on to reschedule the case for a further hearing in seven months’ time (19 April 2021) so as to allow ConocoPhillips to serve the hearing date on the respondents while observing a service term of at least six months.
Observations on the decision and on how optimise Dutch procedure
The decision highlights that Dutch courts can be expected to require award creditors to submit proof of service that is complete and fully compliant with the Hague Service Convention, even if the political or economical situation in the state addressed makes it near impossible to deliver and serve the documents on the counterparty. This may seem a bit harsh on award creditors who are entirely dependent on the proper functioning of the central authority in a foreign State and who may suffer considerable delays – as this decision goes to show – if service documents are not returned timely by the central authority.
A counterbalance to the strict application of service requirements under the Convention is provided for in article 15 (2nd paragraph) of the Convention, which the Dutch courts are known to apply liberally if at least the required six months have lapsed since the date of service out of the Dutch jurisdiction and the applicant can show that reasonable efforts have been made by the process server to obtain the certificate of service and delivery. Clearly however, this alternative to proof of completion of service is less useful in practice if the six month-period is added to the initial service term for a hearing date, because that date was set at less than six months from the date of initiation of service out of the Netherlands. It is here that Dutch procedural law holds promise for optimisation and time gains.
Recognition and leave to enforce a foreign arbitral award in the Netherlands is applied for in ‘petition proceedings’ (verzoekschriftprocedure), which have as a distinct procedural feature that the hearing date and the minimum period for service of the hearing date on the respondent are set by the court and confirmed to the applicant following receipt of the petition. These procedural instructions are given sua sponte by the court. However, the relevant court regulations (procesreglementen) for the Dutch appellate courts specify – in summary – that a party in petition proceedings may apply to the court to (re)schedule a hearing in accordance with that party’s availability and that the court will strive to adjust its planning accordingly. Thus, one may assume the court to entertain an ancillary request made by an award creditor in the petition for recognition and leave to enforce to schedule the hearing at a specific minimum period after the envisaged date of service out of the Dutch jurisdiction.
On that basis and taking into account that article 15 (1st paragraph) of the Convention stipulates in general terms that article 15 (2nd paragraph) may be applied as soon as “the defendant has not appeared”, there seems to be nothing against an applicant proactively requesting a hearing to be scheduled in at least six months’ time, in order to account for a scenario where the service documents are not returned timely and article 15 (2nd paragraph) of the Convention may have to be relied on. In that way, the court may decide already at the first hearing, by way of an oral procedural instruction, to hear the petition ex-parte, rather than having to reschedule for a second hearing, only to be able to observe a six month service term. This approach may yield significant time gains for the award creditor, taking into account also that Dutch petition proceedings are in principle heard in a single hearing, following which the final decision on the petition for recognition and leave to enforce the foreign arbitral award may be issued.
 The author was a member of the Dutch counsel team for Gazprom in that case.
As from 1 April 2020 Wouter de Clerck will join the dispute resolution practice of Legaltree as partner. Wouter was previously employed with DLA Piper and before that with Houthoff. He specialises in international arbitration and cross-border litigation. According to Wouter, Legaltree’s ‘partners only’ approach is the perfect match for the type of cases he handles.
‘Legaltree has a reputable and flourishing dispute resolution practice, which I will be happy to add my experience to’, says Wouter. ‘With three experienced arbitration partners we will be able to serve our clients even better in complex disputes’.
‘Arbitration cases are often complex and intensive’, explains Wouter, ‘with matters coming to a climax at the hearing. In my view this requires a highly specialised team of lawyers, each member of which should know and have command of the case in detail. Personal partner attention is in Legaltree’s DNA, which means that it represents a perfect match with my own practice. Together with partners Max van Leyenhorst and Sander Oorthuys I will be able to team up quickly and efficiently. In addition, Legaltree can count on excellent backup in terms of file management and legal research, to be used as the case requires. Clients will experience this as pleasant, economical and efficient.‘
About Wouter de Clerck
Wouter started his career as a lawyer with Houthoff in 2006, following which he joined the arbitration practice group of DLA Piper in 2012. In his largely international practice he has clients in the energy, technology and mining sector. He is regularly involved in high-profile cases. Recently he represented Gazprom in a dispute with Ukrainian state-energy company Naftogaz regarding recognition and enforcement in the Netherlands of a USD 3bn Swedish arbitral award. Wouter regularly writes on subjects of arbitration law and of private international law and has been a guest lecturer at Leiden University and at Erasmus University Rotterdam. In Chambers Europe 2020 Wouter is recommended as Up and Coming in the Dispute Resolution category. His clients say: ‘He is able to keep a complex matter running flawlessly and to relentlessly pursue the success of the case.‘ In Legal500 2019 Wouter is recommended for international arbitration.
About Legaltree’s arbitration practice
Legaltree assists its clients in international arbitration and related proceedings before the national courts. Legaltree partners have wide experience in both commercial arbitration and in public law and semi-public law arbitration, including arbitration on the basis of investment treaties. They also regularly act as arbitrators themselves. Legaltree works together with a network of international friend-firms, which network is based on personal quality and long-term working relationships.
Artikel M.C. van Leyenhorst, ‘Beschouwingen naar aanleiding van het Achmea-arrest van het Hof van Justitie EU’, TvA 2019/65, JCDI:ADS92104:1.
Op 6 maart 2018 wees het Hof van Justitie EU arrest in de zaak Achmea/Slowakije (zaak C-284/16, ECLI:EU:C:2018:158). Het arrest, dat in TvA 2018/39 (deels) is gepubliceerd, heeft belangrijke gevolgen voor intra-EU investeringsarbitrage. Arbitrage op grond van intra-EU investeringsverdragen (BITs die zijn gesloten tussen twee lidstaten van de EU) is met deze uitspraak een stuk lastiger, onzekerder en kostbaarder geworden. Het arrest heeft dan ook tot veel ophef geleid. In de Nederlandse vakliteratuur zijn al vele annotaties en commentaren op het arrest verschenen. Ook internationaal is er veel over geschreven. In deze bijdrage wordt ingegaan op de mogelijke gevolgen van het arrest voor verschillende varianten van intra-EU investeringsarbitrages.
W.J.L. de Clerck en E. Gras (red.), ‘Groots perspectief. Opstellen aangeboden aan mr. drs. T.D. de Groot’, Deventer: Wolters Kluwer (2017).
In Tijdschrift voor Arbitrage (TvA 2015/6).
Artikel W.J.L. de Clerck, ‘Tweede congres Dutch Arbitration Association – een verslag’, TvA 2015/18.
Na het openingscongres in 2013, heeft de Dutch Arbitration Association haar positie als arbitragevereniging bestendigd door een succesvol tweede congres te organiseren, op 1 september 2014 in de Hermitage in Amsterdam.