Dutch Supreme Court applies strict interpretation of the (alternative) time limit for filing for the annulment of an arbitral award
In Supreme Court 15 June 2018, ECLI:NL:HR:2018:914 (Bursa/Güris et al.) the Dutch Supreme Court ruled in favour of a strict application of the (alternative) time limit for filing for the annulment of an arbitral award. If the first time limit of three months after the deposit or dispatch of the award has lapsed, a claim for annulment cannot be filed until the start of the second time limit of three months after service of the award and leave for enforcement.
Background
The municipality of Bursa, a large city in north-western Turkey, entered into a contract with a consortium of construction companies for the construction of an urban railway system in its municipality (the ‘Bursa Light Rail System’). The construction agreement contains a submission to arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce (ICC) of 1 January 1998. The place of arbitration is The Hague.
The Bursa Light Rail System project, which dates back to 1997, has led to a number of disputes. This has resulted in several ICC arbitral awards as well as several annulment proceedings before the Dutch courts. The present case relates to an arbitral award of 11 July 2011 in which Bursa was ordered to reimburse a number of the construction companies, Güris et al., for additional costs incurred as a result of a delay of the project.
On 3 October 2011, Güris et al. deposited the arbitral award at the registry of The Hague District Court. Güris et al. then requested leave for enforcement of the award before the interim relief judge of the same court, which it granted on 6 June 2012. Güris et al. also filed for the recognition and enforcement of the award before the Bursa District Court in Turkey, which it granted on 30 May 2013.
Annulment proceedings
On 19 September 2012, Bursa filed a claim for annulment of the arbitral award before The Hague District Court on the grounds that one of the arbitrators had not been impartial and independent (under current Dutch procedural law, a claim for annulment is filed before the competent Court of Appeal). The Hague District Court rejected the claim for annulment, and that decision was upheld in appeal proceedings before The Hague Court of Appeal. The Hague Court of Appeal ruled that Bursa lacked a cause of action because the claim for annulment was not filed within the applicable time limits.
Under Dutch procedural law applicable to the award against Bursa (article 1064(3) Dutch Code of Civil Procedure (DCCP) (old), currently article 1064a(3)), there are two time limits for filing a claim for annulment:
- The first time limit is three months, commencing on the date the award is deposited with the registry of the district court of the place of arbitration. Under the current article 1064a Dutch Code of Civil Procedure, however, this time limit commences on the date the award is dispatched to the parties. The date commences on the date the award is deposited with the registry of the district court only if parties have agreed to such deposition.
- The second time limit is three months, commencing on the date the award is served together with a leave for enforcement.
Bursa had filed the claim for annulment after the first time limit had lapsed. The Hague Court of Appeal ruled that Bursa had not shown that the award and leave for enforcement were served on Bursa and therefore failed to show that the second time limit had commenced. As a result, Bursa’s claim for annulment fell within neither of the two time limits.