WILLEMSTAD – The introduction of a formal dispute settlement mechanism within the Kingdom of the Netherlands appears closer than ever after the Council of State of the Kingdom issued a positive opinion on the draft Kingdom Disputes Act.
The proposal aims to establish a formal procedure for resolving disputes between the countries of the Kingdom. Discussions about such a mechanism have been ongoing since 2010, when the current constitutional structure of the Kingdom took effect.
Although the obligation to create a dispute settlement arrangement is included in the Charter for the Kingdom of the Netherlands, the Dutch government has long resisted allowing an independent body to issue binding rulings in conflicts between the countries.
The draft legislation prepared by the parliaments of Aruba, Curaçao and Sint Maarten proposes that the Council of State of the Kingdom act as the dispute settlement authority, with decisions that are binding.
Legal and political considerations
In its advisory opinion, the Council of State supports the creation of the mechanism but included an important qualification. According to the advisory division, a dispute resolution system must still leave room for political and administrative considerations.
The council therefore suggested that the Council of Ministers of the Kingdom should not be able to deviate from rulings related to legal matters. However, it could deviate from conclusions on political or administrative aspects of a dispute if there are exceptionally compelling reasons.
Under this approach, the body resolving the dispute would determine which elements relate to legal issues and which involve political or administrative considerations.
Similar approach in financial supervision law
The advisory division already applies a similar model in disputes handled under the Kingdom Act on Financial Supervision. In that framework, the Kingdom Council of Ministers cannot deviate from legal judgments but may depart from other conclusions under very exceptional circumstances.
Dialogue remains essential
The Council of State also emphasized that referring disputes to the arbitration mechanism should be considered a last resort.
According to the advisory body, constructive dialogue between the countries of the Kingdom remains the most important way to prevent and resolve disagreements before they escalate into formal disputes.