Belgian arbitration law

By Dirk De Meulemeester, Partner at Lexlitis and Prof. dr. Maud Piers

Introduction
As of September 1st 2013 Belgium has a brand new arbitration law in line with the UNCITRAL Model Law (Arbitration Act of 24 June 2013 – published in the Belgian State Gazette on 28 June 2013).

For two years a group of experts (*) drafted a new Part VI of the Belgian Judicial Code. The working group unanimously decided that the Belgian arbitration law – enshrined in Part VI of the Judicial Code – should be revised entirely, and should be based on the UNCITRAL Model Law.
The arguments were threefold: (1) Its global structure and universal destiny make the UNCITRAL Model Law most suited to deal with the international aspects of arbitration. (2) The UNCITRAL Model Law is renowned around the globe and thus very recognizable. (3) The adoption of the UNCITRAL Model Law is compatible with a number of so-called ‘belgo-belges’-policy choices.

One of the main topics raised was the question whether to make a distinction between national and international arbitration cfr. Article 1(3) of the Model Law. The working group was unanimous again, stating that making any such difference would not be advisable. In the final working paper reference was made to the article of P. Mayer and the problems that can occur when national and international arbitration are subject to a different set of rules within one jurisdiction. The working group adopted the one great bumper sticker that makes it clear to all: If it is good enough for international arbitration, it is good enough for national arbitration. In other words, there is no reason why national arbitration should not enjoy the same features of autonomy and flexibility we grant international arbitration.

The text was submitted to the Commission of Justice on 23 April 2013 and sent over to the Plenary Session of the Chamber of Representatives, where it was adopted unanimously on 16 May 2013.

By implementing the UNCITRAL Model Law, Belgium followed the examples of Germany (Zivilprozessordnung (ZPO), Book X of 22 December 1997), Ireland (Arbitration Act of 20 May 1998), Spain (Act of 23 December 2003), Italy (Act of 2 February 2006), Austria (Act of 1 July 2006) and the efforts of the Netherlands (See: A.J. van den Berg, Voorstellen tot wijziging van het vierde boek (Arbitrage) – Artikelen 1020-1076 Rv., TvA, 2005, Special, p. 65 en volg.)

In this contribution we merely give the highlights of the new arbitration law. More elaborate contributions will be published in the next ASA Bulletin and b-Arbitra (the new biannual peer-reviewed journal on arbitration in Belgium).

The main changes to the current arbitration law introduced by the new Arbitration Act can be summarized as follows:

(i) The conditions for objective arbitrability are clarified; the principal criterion is a substantive one referring to the proprietary nature of the dispute (Article 1676 §1).

(ii) The freedom to entrust the (administration of the) arbitration to a third party, including an arbitration institution (Article 1677 §2, Article 1685 §4 and Article 17313 §6), is provided.

(iii) There is a new and detailed provision on notification, including the manner in which notifications can be made, to which addresses this should be validly done, and the date from which notifications take effect. This new provision is brought up to speed with the modern means of communication (Article 1678).

(iv) The court competent to deal with arbitration issues is redefined: the President of the Court of First Instance (cfr. summary proceedings) is competent, acting on an ex parte application, to appoint arbitrators (1680 §1) and, acting on an inter partes application to decide on the challenge and replacement of an arbitrator (Article 1680 §1-§2), as well as to impose a time limit to the arbitral tribunal to render an award (Article 1680 §3) and to take all necessary measures to obtain evidence (Article 1680 §4). For other matters, the Court of First Instance (and not its President) has competency (1680 §5). These decisions (1680 §1-§2-§3-§4) cannot be the subject of an appeal. Similarly, an annulment judgment is no longer subject to an appeal on the merits (Article 1680 §5). The territorial competent court is the Court of First Instance with the same seat of the Court of Appeal which has jurisdiction over the place of arbitration (Article 1680 §6). All procedures are therefore centralized in the five courts of First Instance (Antwerp, Mons, Brussels, Ghent and Liège), allowing for a certain specialization of these courts.

(v) Now there is a clear definition of what constitutes an arbitration agreement. This is broader than an agreement involving merely contractual disputes. Also it is no longer necessary to have an arbitration agreement in writing (Article 1681).

(vi) When a national court is asked to decide on a dispute that is the subject of an arbitration agreement, the arbitration procedure may nevertheless be initiated or continued (Article 1682 §2), even when a procedure to challenge an arbitrator has been initiated (Article 1687 §2).

(vii) Party-autonomy has been broadly recognized. By way of example: parties may organize their own procedures for challenging an arbitrator, for instance by referring to the rules of an arbitration institution (Article 1687 §1).

(viii) There are now a number of explicit rules on provisional and interim measures ordered by an arbitral tribunal (Article 1691-1698). A party who requests and executes a protective measure, can be held liable for all costs and damages caused by said measure to another party, when the tribunal later decides that the measure should not have been ordered (Article 1695). A provisional or protective measure ordered by an arbitral tribunal can be declared enforceable by the Court of First Instance, unless the tribunal indicates otherwise (Article 1696 §1).

(ix) There is explicit mention of a number of general principles, such as the principle of equality of the parties and of due process (Article 1699).

(x) With the exception of claims concerning authentic instruments, the tribunal is competent to decide on claims of writing verification and to rule on the alleged forgery of documents (Article 1700 §5).

(xi) Experts appointed by the arbitral tribunal in the context of an arbitration can also be challenged by the parties (Article 1707 §4).

(xii) A party may, with the consent of the tribunal, request the national court to order measures concerning the taking of evidence (Article 1708).

(xiii) If an arbitrator refuses to take part in the deliberation or the voting on the arbitral award, the other arbitrators can decide without him, unless the parties have agreed otherwise (“truncated arbitral tribunal”) (Article 1711 §4).

(xiv) The conditions on the closing of the arbitration procedure have been made explicit (Article 1714).

(xv) The annulment of an arbitral award can only take place based on a limited number of grounds (Article 1717) and, in case of a violation of the rights of defense or in case of an arbitration which did not proceed in accordance with the parties’ agreement, only if it is determined that the invoked ground for annulment had an influence on the arbitral award (Article 1717 §2(a) II and v).

(xvi) If the arbitral award can be “saved”, the court where the action for annulment was brought can remand the case to the arbitral tribunal, in order to allow it to remedy the arbitral award so that an annulment can be avoided (Article 1715 §7 and Article 1717 §6).

(xvii) The recognition of an arbitral award can only be refused on the basis of a limited number of grounds (Article 1721) and, in case of a violation of the rights of defense or in case of an arbitration which did not proceed in accordance with the parties’ agreement or the right of the place of arbitration, only if it is determined that this irregularity had an influence on the arbitral award (Article 1721(a) ii and v).

(xviii) The arbitral award will be precluded from enforcement ten years after its notification.

With these adjustments Belgium adopted a new arbitration law which will belong to the most progressive arbitration laws in the world and which will significantly increase the appeal of Belgium for international arbitrations.

The new Arbitration Act will apply to arbitrations commencing after the date of entry into force of the Act and on claims made before the national courts in connection to arbitrations commenced after the date of entry into force of the new Arbitration Act.

The arbitration law applicable before the entry into force of the Act (1 September 2013) will remain applicable to arbitration proceedings that were commenced before the date of entry into force of the new Arbitration Act, and to claims pending before a national court or claims being made in connection with arbitration proceedings commenced before the date of entry into force of the new Arbitration Act.

(*) The working group who drafted the new Arbitration Act consisted of: Guy KEUTGEN, Olivier CAPRASSE, Fons BORGINON, Georges-Albert DAL, Dirk DE MEULEMEESTER, Luc DEMEYERE, Johan ERAUW, Michel FLAMEE, Pierre GABRIEL, Françoise LEFEVRE, Didier MATRAY, Charles PRICE, Piet TAELMAN, Hans VAN HOUTTE and Herman VERBIST.