Council of State issues positive advice on draft Kingdom disputes act

THE HAGUE--The long-standing effort to establish a formal dispute settlement system within the Kingdom of the Netherlands has taken a significant step forward, following a positive advisory opinion from the Advisory Division of the Council of State of the Kingdom on the draft Kingdom Disputes Act.

The proposal, submitted for consideration by the President of the House of Representatives of the States General on September 16, 2025, concerns a draft Kingdom Act introduced by the Minister Plenipotentiary of Aruba. The bill contains provisions for the handling of disputes between the Kingdom and its constituent countries and is the result of consultations among the States of Aruba, Curaçao, and St. Maarten.

The proposed legislation gives effect to Article 12a of the Charter for the Kingdom of the Netherlands, which has, since 2010, required that a Kingdom Act be established to regulate the settlement of disputes between the Kingdom and the countries. The proposal seeks to address what has long been regarded as a structural imbalance within the Kingdom, where the Netherlands, as the largest country, holds the dominant position in the political bodies and procedures that shape Kingdom affairs.

Under the proposal, if a dispute arises within the Kingdom concerning the interpretation of the Charter or regulations based on it, and continued consultations do not produce a solution, Aruba, Curaçao, and St. Maarten would be able to submit the matter to the Council of State of the Kingdom, which would act as the dispute resolution body.

A key point in the current proposal is that the judgment of the Council of State of the Kingdom would be binding, with the Kingdom Council of Ministers not permitted to deviate from it. This marks an important difference from earlier proposals, including a 2018 bill, under which deviation would have been possible in the presence of compelling reasons. That earlier proposal was ultimately withdrawn after objections from the Caribbean countries.

In its advisory opinion, the Advisory Division said it understands the need for an adequate dispute settlement system, noting that such a mechanism is not only required by the Charter, but is also important for sound cooperation within the Kingdom. At the same time, the Division stressed that dispute resolution should be regarded as an extreme measure and not a substitute for sustained and constructive consultation between the countries.

The Council of State said the system must be designed in a way that allows for the assessment of the legality of decisions of the Kingdom Council of Ministers, while also preserving room for political-administrative consideration. It therefore advised that the draft law be amended so that the Kingdom Council of Ministers cannot deviate from judgments on legal aspects of a dispute, but may depart from findings on political-administrative aspects only for very serious reasons.

According to the Division, it should be up to the dispute resolution body itself to determine which parts of a judgment relate to legality and which concern political-administrative considerations. In that respect, the Advisory Division pointed to existing dispute resolution arrangements under the Kingdom Financial Supervision Act as a workable model.

The Advisory Division also called for greater clarity in the draft legislation. It noted ambiguities in the procedure, including whether the Netherlands itself may also submit a dispute for settlement. It also highlighted inconsistencies between the present proposal and existing Kingdom dispute procedures, particularly in relation to the adoption of procedural rules and the role assigned to the Minister of the Interior and Kingdom Relations.

The Council of State further recommended that the procedural rules in the bill be aligned more closely with those already in place under existing special dispute settlement mechanisms, in order to avoid confusion and ensure greater legal unity. It also advised amendments to address how disputes would be handled during continued consultations within the Kingdom Council of Ministers, including whether such consultations should be suspended pending a ruling by the Council of State.

In addition, the Advisory Division raised concerns about certain terminology used in the draft, including the phrase “Minister of the Kingdom,” which it said is not an established legal term, and the use of the word “countries,” which it said should be clearly defined in the legislation.

Despite these comments, the Advisory Division issued a positive recommendation overall and advised that the proposal be amended in line with its observations.

The draft Kingdom Disputes Act is widely seen as part of a broader effort to correct the asymmetry within the Kingdom and create a more balanced framework for resolving disputes between the Kingdom and the Caribbean countries. Discussions on the issue have been ongoing since the constitutional reforms of 10-10-10, with successive attempts reflecting differing views between the Netherlands and the Caribbean countries on whether dispute resolution should be fully binding.

The Advisory Division underscored that, regardless of the final design of the system, dispute settlement should remain a last resort. It emphasized that preventing disputes, and resolving them through constructive consultation whenever possible, remains of the utmost importance for the functioning of the Kingdom.

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