Belgium Adopts New Law on Arbitration

by Erica Stein (Counsel, Hanotiau & van den Berg, Brussels)
and Maarten Draye (Senior Associate, Hanotiau & van den Berg, Brussels)

On 1 September 2013, a new arbitration law came into effect in Belgium.  The new law is modern and progressive, and underlines Belgium’s ambitions to increase its popularity as a venue for international arbitrations.

The new law generally adopts the wording and contents of the UNCITRAL Model Law on International Commercial Arbitration as amended in 2006. The legislator further drew inspiration from the French, German and Swiss arbitration laws and retained a number of specificities of the former Belgian law. In this regard, it is worth noting that the provision of the old law that entitles parties without domicile, registered office or branch in Belgium to exclude the possibility of annulment of an award by express agreement for arbitrations seated in Belgium is retained. Also, the legislator opted again to incorporate the law on arbitration in Title VI of the Code of Civil Procedure, and to maintain the uniform approach to domestic and international arbitration.

 

The most important novelties include the following.

First, the new law contains a clear definition of the scope of arbitrability to all disputes involving an economic interest, unless expressly excluded by law. In practice, this definition includes most commercial disputes, and will also be applicable to investment disputes.

Second, all arbitration-related court proceedings are centralized before the Courts of First Instance at the seat of the five Courts of Appeal (Brussels, Antwerp, Ghent, Liège and Mons).  Specific powers have been given to the Presidents of the Courts of First Instance, allowing them to make decisions in a matter of days or weeks that are final and not subject to appeal. Only limited recourse before the Supreme Court is possible on points of law. As a result of these changes, parties will now have the possibility to quickly obtain measures in support of arbitration proceedings from specialized local courts. Similarly, applications to set aside an award will be resolved much faster than before.

Third, parties may agree on a procedure for the challenge of arbitrators, either directly or by reference to the rules of an arbitration institution. In deviation of the Model Law and to avoid dilatory tactics, Courts may only hear applications on challenges when the parties did not agree on such a procedure.

Fourth, arbitral tribunals are given wide powers to order preliminary or interim measures. Such measures are enforceable in Belgium, regardless of the form in which they have been rendered. When necessary, courts may also assist, in particular regarding the taking of evidence.

Fifth, the drafting history of the law expressly indicates that setting aside an arbitral award must be a last resort. To accomplish this, arbitral awards may only be set aside on the basis of a reduced number of grounds listed in the law.  In addition, the new law provides that certain of these limited grounds may only give rise to setting aside to the extent that the outcome of the arbitral proceedings was affected.  Further, in order to save the award whenever possible, the competent Court may, upon the request of a party, suspend the setting aside proceedings and send the award back to the same arbitral tribunal to allow it to take the necessary measures to erase the possible ground for annulment.

Finally, the new law expressly puts forward a number of principles. In addition to the well established requirements of equality between parties and due process, the law also stresses that the parties must behave cooperatively. Similarly, the law contains the general principle that a party that considers its procedural rights to have been violated must flag the problem when it occurs, otherwise it is precluded from raising it later.

Belgium hosts the European capital and is a known center for international business, with its many multinational corporations. With the new law, Belgium has become part of an ever growing group of Model Law countries and has adequately addressed a number of flaws under the old regime. In combination with the country’s perceived neutrality, this should make Belgium well-placed to become a center for international arbitration as well.

The new law applies to all arbitration proceedings initiated on or after 1 September 2013 as well as to court proceedings initiated in relation to such arbitration proceedings. An unofficial English translation of the law may be consulted here.