It is widely accepted that arbitral awards can be set aside if the arbitral tribunal has violated its mandate. However, a party to the arbitration that is aware of this breach, and does not address this issue during the arbitration, may lose the possibility to invoke such a violation as a ground for setting aside the award according to the Netherlands Arbitration Act.

In a recent decision, the Supreme Court dealt with this issue. The case at hand involved a party who had indeed not addressed an apparent violation of a tribunal's mandate during the course of the arbitration, despite it being aware of the violation. Under DCCP 1065 para. 4 a failure to raise an objection to the apparent breach of a tribunal´s arbitral mandate is tantamount to a waiver of said breach by the parties. This has clear implications for parties who may wish to later use the violation by the tribunal of its mandate as a grounds for challenging an award.

Upon the conclusion of the arbitration in the present instance, the final award was challenged before the Court of Appeals of Amsterdam. During those proceedings the party resisting the challenge failed to raise DCCP 1065 para. 4 as a defense to the arguments for setting the award aside. Despite this omission, the Court of Appeals applied the waiver rule of DCCP 1065 para. 4 of its own motion and denied the challenge to the award.

The decision by the Court of Appeal was later brought to the Hoge Raad or Netherlands Supreme Court, where the argument was raised that the Court of Appeal should not, of its own motion, have invoked the DCCP 1065 para. 4 waiver. The Supreme Court found that this was correct, as the waiver rule does not concern a right that may be considered a part of Netherlands public policy. Therefore the Court of Appeals was incorrect in its application of such a defense, sua spontae,  since this rule of law does not touch upon what is known in the Netherlands as the "public order".

Supreme Court 23 April 2010, LJN: BK8097.