Belgian courts are usually seen as an effective forum for commercial disputes, although commercial parties are sometimes concerned by the backlog of cases before certain courts (most notably the courts of appeal) and the fact that it is not possible to use English in the course of the proceedings. For these reasons, and the well-known advantages of arbitration (international enforcement, procedural flexibility, neutral forum, etc), international arbitration is frequently provided for in commercial contracts, especially international ones.
As Belgian courts have been heavily impacted by the COVID-19 pandemic and the associated government measures, it is expected that more parties will resort to arbitration in order to avoid the backlog of cases before the state courts and to benefit from the procedural flexibility of arbitration.
Arbitration is often provided for in M&A agreements in a number of industries, as well as in commercial contracts in the construction and energy sectors.
The Belgian Centre for Arbitration and Mediation (CEPANI) is the prevalent arbitration institution in Belgium. A significant number of cases, especially where one of the parties is non-Belgian, are also brought before the International Chamber of Commerce (ICC). There were 29 Belgian parties in the 2019 filings of the ICC.
Arbitrations seated in Belgium are governed by the Belgian Law on Arbitration (BLA), which is set out in part VI of the Belgian Judicial Code (BJC). An unofficial English version of the same is available on CEPANI’s website. Domestic and international arbitrations are governed by the same provisions.
The BLA is largely based on, and consistent with, the UNCITRAL Model Law. The major improvements of the 2006 UNCITRAL Model Law on interim and conservatory measures ordered by arbitral tribunals, and the limited grounds for setting aside arbitral awards, have been implemented into the BLA.
The most important differences with the UNCITRAL Model Law lie in:
There has been no significant change to the BLA in the past year.
Modification of the Belgian Code of Economic Law
The Act of 4 April 2019 modified the Belgian Code of Economic Law in order, among other changes, to extend protections traditionally benefiting consumers – namely, the prohibition of unfair contractual terms and of unfair market practices – to relationships between enterprises. Four B2B contractual terms will always be deemed unfair, without the possibility to rebut their unfairness, including a clause which, in case of a dispute, leads the other party to waive any legal recourse against the enterprise. Surprisingly, the preparatory works of the Act of 4 April 2019 mention as an example of such a clause, the clause imposing arbitration on the other party. This has been criticised by a number of commentators, who consider that the mention of this is a mistake. There is no case law on this as yet, since the provisions on B2B unfair contractual terms will only come into force on 1 December 2020 for contracts concluded, renewed or modified after such date.
The Brussels International Business Court
A draft bill was submitted by the Belgian government in 2018 in order to set up a specialised English-speaking court with jurisdiction over international commercial disputes, the Brussels International Business Court (BIBC). The BIBC should have been effective by 1 January 2020. However, due to a lack of political support in parliament, the Bill has not been adopted.
The BLA does not impose any specific formal requirement for an arbitration agreement to be enforceable. In particular, it is not required that an arbitration agreement be recorded in a written document.
In order to be valid under Belgian law, any agreement requires:
Pursuant to Article 1676 BJC, two types of disputes may be arbitrated:
As a result, disputes relating to citizenship, filiation, divorce, etc are not arbitrable under Belgian law.
Beyond this general rule, a number of mandatory provisions limit the parties’ autonomy to submit certain disputes to arbitration. The main ones are the following:
Belgian courts generally enforce valid arbitration agreements and narrowly interpret provisions limiting arbitrability.
The separability doctrine is expressly recognised by Article 1690(2) BJC. An arbitral clause may thus be ruled valid even if the rest of the contract in which it is contained is invalid.
Parties are free to decide on the number of arbitrators provided that the arbitral tribunal is composed of an uneven number (Article 1684(2) BJC). An arbitration agreement providing for an even number of arbitrators in not per se invalid: such agreement will be considered pathological and will have to be corrected by appointing an additional arbitrator.
The parties are free to choose their arbitrator, and their freedom of choice is only limited by the requirement to choose an independent and impartial person (Article 1685(2) BJC). No minimum experience or legal qualification is required, but the parties may agree on such qualifications.
Parties have the right to choose an arbitrator of the same nationality. They may also agree on limitations or restrictions regarding the arbitrator’s nationality (Article 1685(1) BJC).
The BLA foresees a procedure for the selection of arbitrators:
In both cases, the appointment will be made by the president of the Court of First Instance.
The BLA does not contain any default rule specifically for the appointment of arbitrators in the framework of multi-party arbitrations. However, most of the arbitration institutions, including CEPANI, have adopted rules which foresee that the institution will appoint all members of the arbitral tribunal in the event of a disagreement between parties on the same side in the proceedings regarding the choice of an arbitrator, or in the case of multilateral arbitrations.
As indicated in 4.2 Default Procedures, the president of the Court of First Instance will assist in the choice of arbitrators in the event that a party, an arbitrator or an arbitration institution fails to appoint an arbitrator.
Parties are free to lay down the rules for a challenge or removal procedure (Articles 1687(1) and 1688(1)). When parties agree on such procedures, they are bound to resolve any application for a challenge or removal pursuant to these rules.
The BLA also provides for default procedures before the president of the Court of First Instance for the challenge or removal of an arbitrator, on exceptional grounds:
Arbitrators must be impartial and independent, on the following basis:
Arbitrators also have an ongoing duty to inform the parties of potential situations of conflict of interests (Article 1686(1) BJC).
See 3.2 Arbitrability.
The Kompetenz-Kompetenz doctrine is enshrined in Article 1690(1) BJC. Arbitral tribunals may thus rule on their own jurisdiction in the event a party raises jurisdictional or admissibility objections, including any objection with respect to the existence or validity of the arbitration agreement.
The jurisdictional or admissibility objections should in principle be raised no later than with the first written submission of the objecting party (Article 1690(2) BJC). Late pleas concerning jurisdiction can be taken into consideration only if the arbitral tribunal considers the delay justified (Article 1690(3) BJC).
The arbitral tribunal may rule on its own jurisdiction either in a preliminary award or in the award rendered on the merits (Article 1690(3) BJC).
The competence of arbitral tribunals to rule on their own jurisdiction is subject to the Court of First Instance’s subsequent control, including when the arbitral tribunal holds that it lacks jurisdiction (Article 1690(4) BJC). Belgian courts are not interventionist but are willing to intervene when asked.
The arbitral tribunal’s decision that it has jurisdiction may only be challenged together with the award on the merits. The decision that it lacks jurisdiction may be challenged immediately (Article 1690(4) BJC).
The Court of First Instance conducts a de novo review of the arbitral tribunal’s decision on its own jurisdiction.
In the presence of a valid arbitration agreement, Belgian courts must declare themselves without jurisdiction if a defendant raises the exceptio arbitri (arbitration exception) in its first written submission (Article 1682(1) BJC).
The start of state court proceedings in the breach of an arbitration agreement does not suspend the arbitration proceedings or prevent a party from commencing arbitration proceedings (Article 1682(2) BJC).
In the absence of an arbitration agreement, an arbitral tribunal will in principle not assume jurisdiction over third parties.
Most legal scholars consider that the extension of an arbitration agreement to non-signatories is possible under several legal theories, such as consent by conduct, assignment of contract, subrogation or legal succession of parties. In a 2016 decision, the Brussels Court of First Instance held that arbitration clauses may be “extended” to non-signatories where they have participated to the conclusion and/or performance of the agreement, thereby implicitly, but certainly, accepting the arbitration clause.
Arbitral tribunals can grant interim or conservatory measures, provided the parties did not exclude that option in their arbitration agreement (Article 1691 BJC). Parties may still apply for these measures before domestic courts, even in the case of exclusion (Article 1683 BJC).
Arbitral tribunals can order any interim or conservatory measures they deem necessary, with the exclusion of attachment orders which may only be ordered by domestic courts (Article 1691 BJC). Due to the contractual nature of arbitration proceedings, arbitral tribunals cannot issue orders vis-à-vis third parties. Furthermore, they are not allowed to grant ex parte interim and conservatory measures.
Arbitral tribunals may grant interim and conservatory measures by means of an order or an award. In the absence of voluntary enforcement of such measures, the claimant must obtain their exequatur before the Court of First Instance. Enforcement can only be refused if one or several grounds for refusal of recognition and enforcement set out in Article 1697 BJC exist.
Arbitral tribunals may, at the request of one of the parties, amend, suspend or terminate an interim or conservatory measure they ordered or those which were ordered by state courts (Article 1692 BJC).
In principle, the existence of an arbitration agreement does not prevent the parties from seeking relief for interim and conservatory measures from domestic courts (Article 1691 BJC), including foreign-seated arbitrations if Belgian courts are competent pursuant to the applicable private international law. Belgian courts may order any interim or conservatory measures they deem necessary, including penalties.
Emergency arbitration is not dealt with by the BLA, but its validity is not challenged. It is provided for in Article 27 of the 2020 CEPANI Rules of Arbitration. The emergency arbitrator, like the arbitral tribunal, may order any interim or conservatory measures it deems necessary, including penalties, except for attachment orders (which may only be granted by state courts). These measures are binding but, in the absence of voluntary enforcement, the claimant must obtain their exequatur before the Court of First Instance (see 6.1 Types of Relief).
The exact conditions of the coexistence of the powers of state courts and arbitral tribunals/emergency arbitrators to issue interim and conservatory measures is subject to a number of debates which have not yet been settled by the Belgian Supreme Court.
Both domestic courts and arbitral tribunals may order security for costs if this is justified under the circumstances of the case. Such security can be ordered at the request of the opposing party or by the arbitral tribunal on its own motion.
As a general rule, parties to arbitration proceedings are free to determine the rules of procedure (Article 1700(1) BJC). This freedom is limited only by the requirements of fair trial and due process (Article 1699 BJC), and the few mandatory provisions of the BLA (listed in Article 1676(8) BJC).
In the event that the parties did not determine the rules of procedure, the arbitral tribunal may apply the procedural rules it deems appropriate, subject to the same limits (Article 1700(2) BJC).
No procedural steps are required by law, except those entailed in the requirements of a fair trial and due process (Article 1699 BJC), and the few mandatory provisions of the BLA (listed in Article 1676(8) BJC).
Arbitrators must be, and remain, impartial and independent throughout the proceedings (see 4.5 Arbitrator Requirements) and ensure fair trial and due process.
They are entrusted with the powers that allow them to conduct the proceedings (such as issuing interim and conservatory measures, or requesting the assistance of the president of the Tribunal of First Instance in taking evidence in certain circumstances).
Under the BLA, parties have complete discretion as to whom they choose as their legal representative, provided that the arbitral tribunal and the opposing parties are given due notice. This includes the right to choose representatives of any nationality or Bar affiliation, but also the right to choose someone who is not admitted to a Bar.
Arbitral tribunals can order the disclosure of documents held by a party and, if necessary, subject parties to penalties (Article 1700(4) BJC). Belgian practitioners are influenced by the Belgian litigation practice where the production of one or several identified documents can only be ordered if there are “serious, precise and concurring” indications that the other party is in possession of a document containing the proof of a relevant fact (Article 877 BJC). As a result, discovery and the broad production of documents have traditionally been uncommon. However, today, arbitral tribunals will most likely resort to the IBA rules on the taking of evidence in an international context.
The BLA does not contain specific provisions on professional privilege. Under the general principles of Belgian law, professional privilege mostly extends to:
Witnesses may be heard by the arbitral tribunal. They cannot be sworn in (Article 1700 (4) BJC). Witness evidence (including written statements and examination/cross-examination) is becoming increasingly common in arbitration proceedings seated in Belgium. It has traditionally had a limited role because of the influence of state court proceedings where witnesses' evidence is rarely used in the context of commercial disputes, but it is now also largely used in domestic cases.
Parties can freely agree on rules that will govern the admissibility and weight of evidence subject to compliance with mandatory provisions and principles of fair trial and due process (Article 1700(3) BJC).
In the absence of such agreement, the arbitral tribunal will have to determine the admissibility, importance (relevance and materiality), and weight of evidence. In particular, it will be up to the arbitral tribunal to determine both the applicable burden and standard of proof. The prevailing view, both in Belgium and in international practice, concerning the burden of proof, is that a party must demonstrate the facts on which it bases its claims. The standard of proof is generally considered to be an issue of substantive law.
As indicated, the arbitral tribunal may enjoin a party (as opposed to third parties) to disclose the evidence according to such terms it deems fit and, if necessary, under penalties (Article 1700(4) BJC). It may also enjoin a party to appear as a witness. If any party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the award on the evidence before it (Article 1706 BJC).
The parties may request the assistance of the president of the Court of First Instance in taking evidence (Article 1708 BJC). The arbitral tribunal remains in control of this process, as parties may not seize the president on their own motion and must first obtain the permission of the arbitral tribunal.
The president of the Court of First Instance can order all necessary measures for the taking of evidence. Examples of possible measures that can be ordered by the president of Tribunal of First Instance include ordering a (third) party to disclose documents directly to a party or an expert, ordering a (third) party to appear as a witness before the arbitral tribunal, allowing access to a property for inspection, etc.
As arbitral tribunals do not have the imperium to issue orders binding third parties, court assistance is usually requested for measures relating to third parties. In theory, court assistance may be required for the enforcement of measures regarding the taking of evidence against the parties, but this is fairly rare in practice as the arbitral tribunal may draw negative inference from the absence of collaboration of a party.
The BLA is silent on the confidentiality of arbitration proceedings, but they are traditionally considered to be confidential. Parties are, however, advised to provide for appropriate measures regarding confidentiality in their arbitration agreement, either directly or by reference to arbitration rules (eg, Article 26 of the 2020 CEPANI Arbitration Rules provides that the arbitration proceedings, and all their materials, are confidential in the absence of the parties’ agreement to the contrary).
Despite this general principle, information in arbitration proceedings may be disclosed during the setting-aside proceedings (see 11 Review of an Award). In addition, awards may be invoked by the parties before other arbitral tribunals or state courts, as – between the parties – they have the same res judicata as a state court’s judgment (Article 1713(9) BJC).
Article 1713 BJC provides the legal requirements for an arbitral award as follows:
The parties can agree on a time limit within which the arbitral tribunal has to render its award. If such agreement does not exist and a period of six months has elapsed since the date on which the last arbitrator was appointed, the president of the Court of First Instance can impose a time limit on the arbitral tribunal, at the request of one of the parties. If the award is not rendered within this time limit, this immediately ends the mandate of the arbitral tribunal (Article 1713(2) BJC).
The Court of First Instance, when asked to set aside an arbitral award, may, where appropriate and if so requested by a party, suspend the setting-aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitration proceedings or to take such other action as, in its opinion, will eliminate the grounds for setting aside (Article 1717(6) BJC).
The types of remedies available to the arbitral tribunal depend on the law applicable to the dispute. For example, if Belgian law is applicable, compensatory and liquidated damages can be awarded by the arbitral tribunal. By contrast, Belgian law prohibits the award of punitive damages.
The same rationale applies to the types of injunctions that can be ordered by the arbitral tribunal. Anti-suit injunctions, for eg, are not available under Belgian law.
As indicated in 6.1 Types of Relief, the BLA provides for concurrent powers of arbitral tribunals and domestic courts to grant interim and conservatory measures, with the exception of conservatory attachment orders, which fall under the exclusive competence of domestic courts (see Articles 1683, 1691 and 1698 BJC).
Arbitral tribunals can order the payment of penalties in the event a party does not comply with their injunctions or awards (Article 1713(7) BJC).
The final award of the arbitral tribunal must fix the costs of the arbitration and decide which party shall bear them and in what proportion (Article 1713(6) BJC). There is no specific method for the allocation of costs. The issue is left to the discretion of the arbitral tribunal.
Unless the parties have agreed on a cost-shifting method, arbitral tribunals with a seat in Belgium will generally follow, at least partly, the “costs follow the event” approach. They will also take into account other circumstances that they might find of relevance, eg, the parties’ behaviour during the proceedings or the complexity of the issues at hand.
In principle, there is no right to appeal (de novo review) an arbitral award, except where the parties have specifically provided otherwise (Article 1716 BJC). Although not expressly stipulated in the BLA, parties may only provide for an appeal before another arbitral tribunal, composed of new arbitrators. Parties may not provide for an appeal before domestic courts. This theoretical possibility is very rarely used.
When providing for a right of appeal, the parties can agree on a specific timeframe within which the appeal must be lodged. Otherwise, the BLA sets out a default time limit of one month, starting the day the award is communicated to the parties in accordance with Article 1678(1) BJC (ie, the day of acknowledgement of receipt of the award). Pursuant to a 2019 decision of the Belgian Supreme Court, if the time limit has elapsed and no appeal has been lodged, setting-aside proceedings become unavailable.
Reasons to Set Aside
The only recourse made available by the law against an arbitral award is setting-aside proceedings before the Court of First Instance, on one of the grounds enumerated in Article 1717 BJC. The award may be set aside if a party demonstrates that:
In addition, the award may also be set aside if:
Article 1717 BJC is a mandatory provision and parties may not deviate from it. They are not allowed to expand or limit the scope of the judicial review on the listed grounds for setting aside.
The parties may not exclude the recourse for setting aside an award, except if none of them is a natural person of Belgian nationality or a natural person having domicile or normal residence in Belgium, or a legal person having its registered office, its main place of business or a branch office in Belgium (Article 1718 BJC).
Once the arbitral award has been rendered, the recourse that may be filed with domestic courts on the basis of Article 1717 BJC is not a full review of the merits of the case, as it is limited to the grounds enumerated in 11.1 Grounds for Appeal. In 2008, the Brussels Court of Appeal ruled that “an annulment constitutes an extraordinary recourse. The causes listed in Article 1704 of the Judicial Code must be interpreted strictly. The judge may not review whether the arbitrator has ruled appropriately on the merits and may not replace the appreciation of the arbitrator by its own.”
Belgium has signed and ratified the New York Convention, which came into force in Belgium on 16 November 1975. Belgium has made a reservation under Article I(3), which deals with reciprocity: accordingly, Belgium applies the convention only to the recognition and enforcement of awards issued in the territory of other contracting states.
Belgium also signed the European Convention on International Arbitration of 1961. It has concluded five bilateral treaties on the enforcement of arbitral awards with France, the Netherlands, Germany, Switzerland and Austria.
Between the parties, the BLA grants res judicata to an arbitral award as soon as it has been issued and prior to its enforcement (Article 1713(9) BJC). An arbitral award also qualifies as a “private title” in the sense of Article 1445 BJC. Therefore, a conservatory attachment is allowed on the basis of an arbitral award, even prior to its enforcement procedure.
The enforcement of an award (exequatur) falls under the exclusive competence of the Court of First Instance.
Grounds for Refusal of Enforcement and Recognition
The application for exequatur is filed ex parte by means of a unilateral request. The party against whom enforcement is sought is therefore not informed during this initial stage. The claimant must file the original or a certified copy of the arbitral award and the arbitration agreement (Article 1720(4) BJC), which may have to be translated if they are not drafted in the language of the proceedings (French or Dutch). The Court of First Instance seized with the request will not review the merits of the case, but only control the award as it faces the exhaustive grounds for refusal of recognition and enforcement listed in Article 1721 BJC. These grounds are similar to those of the setting-aside proceedings and of Article V of the New York Convention. Enforcement and recognition may only be refused, at the request of the party against whom it is invoked, if that party furnishes proof that:
Enforcement and recognition may also be refused if:
If the Court of First Instance orders the enforcement of the award, its decision will have to be formally served to the party against whom enforcement is sought by act of bailiff. This person will then have one month to file a request to oppose this order in third-party opposition proceedings (Articles 1033, 1034 and 1125 BJC). Should the Court of First Instance refuse the enforcement, the only recourse possible is before the Supreme Court, as the decision of the tribunal is not subject to appeal (Article 1680(5) BJC). The Supreme Court’s review is limited to questions of law (as opposed to factual ones).
Immunity from Enforcement
Enforcement against assets owned by the State of Belgium or Belgian state entities (Article 1412bis BJC) and against assets owned by foreign states or state entities (Articles 1412ter and 1412quinquies BJC) is subject to strict conditions:
Enforcement is also not possible against financial instruments deposited in a settlement account held by an award debtor with specific recognised settlement institutions, such as Euroclear (Article 11 of Royal Decree No 62 of 27 January 2004).
The grounds for refusing to enforce an arbitral award are limited and are narrowly construed by Belgian courts, including the concept of public policy.
Public policy is construed by Belgian courts as referring to “Belgian international public policy” (including public policy provisions of EU law). It is therefore only if the recognition and enforcement of an award are deemed to be contrary to principles that are essential to the moral, political or economic order of Belgium that recognition and enforcement will be refused on this ground. “International public policy” is construed even more narrowly than “national public policy” under Belgian domestic law.
The violation of public policy can consist of a violation of procedural public policy (eg, violation of the rights of defence or the absence of reasoning in the award) or a violation of a material rule of public policy or a mandatory law (eg, violation of rules on consumer protection or competition law).
The BLA does not address the question of class-action arbitration.
Lawyers are bound by the ethical codes of the Bar to which they belong. The International Bar Association has issued guidelines for counsel appearing in international arbitration proceedings. Arbitration institutions generally provide guidelines with respect to ethical standards in their arbitration rules.
The BLA does not address the question of third-party funding. The mechanism is considered legal by virtually all the legal scholars, provided that a number of principles and rules are respected (eg, the protection of professional secrecy and legal privilege, the prohibition of fraud, the rules regarding the assignment of contested claims, and pledges on future claims, etc).
The BLA does not address the question of the consolidation of separate arbitration proceedings. However, most arbitration institutions now provide rules on the consolidation of proceedings (eg, Article 13 of the 2020 CEPANI Arbitration Rules).
Arbitration agreements are in principle only binding for the parties to the agreement (see 5.7 Third Parties).
As a general rule, an arbitral award has res judicata solely between the parties to the proceedings, and does not have any binding effect over third parties.
In 2017, the Belgian Constitutional Court held that interested third parties should be entitled to lodge third-party opposition against arbitral awards, without being limited to the grounds of annulment of arbitral awards.
The president of the Court of First Instance can order all necessary measures for the taking of evidence, including measures binding third parties (see 8.3 Powers of Compulsion).