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The Dispute Resolution
Review
Law Business Research
Sixth Edition
Editor
Jonathan Cotton
The Dispute Resolution Review
Reproduced with permission from Law Business Research Ltd.
This article was first published in The Dispute Resolution Review, 6th edition(published in February 2014 – editor Jonathan Cotton).
For further information please [email protected]
The Dispute Resolution
Review
Sixth Edition
EditorJonathan Cotton
Law Business Research Ltd
THE MERGERS AND ACQUISITIONS REVIEW
THE RESTRUCTURING REVIEW
THE PRIVATE COMPETITION ENFORCEMENT REVIEW
THE DISPUTE RESOLUTION REVIEW
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THE BANKING REGULATION REVIEW
THE INTERNATIONAL ARBITRATION REVIEW
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Published in the United Kingdom by Law Business Research Ltd, London
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Legal advice should always be sought before taking any legal action based on the information provided. The publishers accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of February 2014,
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ISBN 978-1-907606-93-9
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i
The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:
acknowLeDgemenTs
ADVOKATFIRMAET BA-HR DA (BA-HR)
ARTHUR COX
ARzINGER
ATTIAS & LEVY
AzB & PARTNERS
BAKER & MCKENzIE SOUTH AFRICA
BIzLINK LAWYERS & CONSULTANTS
BONELLI EREDE PAPPALARDO
BREDIN PRAT
BUFETE HERNáNDEz ROMO
CONSULEGIS ABOGADOS
CRAVATH, SWAINE & MOORE LLP
DE BRAUW BLACKSTONE WESTBROEK
DITTMAR & INDRENIUS
FONTES & TARSO RIBEIRO ADVOGADOS
HENGELER MUELLER
HERGüNER BILGEN ÖzEKE ATTORNEY PARTNERSHIP
JUN HE LAW OFFICES
Acknowledgements
ii
KBH KAANUUN LTD
LANSKY, GANzGER & PARTNER (LGP)
LLOREDA CAMACHO & CO
LOYENS & LOEFF
LUHUT MARIHOT PARULIAN PANGARIBUAN
MANNHEIMER SWARTLING ADVOKATBYRå AB
MAPLES AND CALDER
MIYAKE & YAMAzAKI
MOHAMMED AL-GHAMDI LAW FIRM IN ASSOCIATION WITH FULBRIGHT & JAWORSKI LLP
MOLITOR AVOCATS À LA COUR
MOTIEKA & AUDzEVIčIUS
M/S CHEAH TEH & SU, ADVOCATES & SOLICITORS
NIEDERER KRAFT & FREY
OSLER, HOSKIN & HARCOURT LLP
OXFORD & BEAUMONT SOLICITORS
PATRIKIOS PAVLOU & ASSOCIATES LLC
PINSENT MASONS
PIPER ALDERMAN
PLESNER LAW FIRM
SCHRECK LAW OFFICES
SHALAKANY LAW OFFICE
SLAUGHTER AND MAY
SOFUNDE, OSAKWE, OGUNDIPE & BELGORE
Acknowledgements
iii
SzECSKAY ATTORNEYS AT LAW
TSMP LAW CORPORATION
ŢUCA zBÂRCEA & ASOCIAŢII
URíA MENéNDEz
URíA MENéNDEz – PROENçA DE CARVALHO
UTEEM CHAMBERS
WALKERS
WOLFF GSTOEHL BRUCKSCHWEIGER ADVOKATURBüRO
YOUNG CONAWAY STARGATT & TAYLOR, LLP
v
conTenTs
Editor’s Preface ...................................................................................................xi Jonathan Cotton
Chapter 1 AUSTRALIA .............................................................................. 1Malcolm Quirey and Gordon Grieve
Chapter 2 AUSTRIA ................................................................................. 34Helena Marko, Anna Zeitlinger and Valentin Neuser
Chapter 3 BAHRAIN ............................................................................... 51Haifa Khunji and Kaashif Basit
Chapter 4 BELGIUM ............................................................................... 64Geert Bogaert and Stéphanie De Smedt
Chapter 5 BRAzIL.................................................................................... 87Marcus Fontes, Max Fontes and Juliana Huang
Chapter 6 BRITISH VIRGIN ISLANDS ............................................... 106Arabella di Iorio and Ben Mays
Chapter 7 CANADA ............................................................................... 124David Morritt and Eric Morgan
Chapter 8 CAYMAN ISLANDS ............................................................. 139Aristos Galatopoulos and Luke Stockdale
Chapter 9 CHINA .................................................................................. 152Xiao Wei, Zou Weining and Stanley Xing Wan
Chapter 10 COLOMBIA .......................................................................... 161Gustavo Tamayo and Natalia Caroprese
vi
Contents
Chapter 11 CYPRUS ................................................................................ 174Eleana Christofi and Katerina Philippidou
Chapter 12 DENMARK ........................................................................... 187Peter Schradieck and Peter Fogh
Chapter 13 ECUADOR ............................................................................ 199Xavier Castro-Muñoz and Fabrizio Peralta-Díaz
Chapter 14 EGYPT ................................................................................... 209Khaled El Shalakany
Chapter 15 ENGLAND & WALES .......................................................... 214Jonathan Cotton and Damian Taylor
Chapter 16 FINLAND.............................................................................. 236Jussi Lehtinen and Heidi Yildiz
Chapter 17 FRANCE ................................................................................ 248Tim Portwood
Chapter 18 GERMANY ............................................................................ 264Henning Bälz and Carsten van de Sande
Chapter 19 GHANA ................................................................................. 284David A Asiedu and Joseph K Konadu
Chapter 20 GIBRALTAR .......................................................................... 297Stephen V Catania
Chapter 21 HONG KONG ...................................................................... 307Mark Hughes
Chapter 22 HUNGARY ............................................................................ 332Zoltán Balázs Kovács and Dávid Kerpel
vii
Contents
Chapter 23 INDIA .................................................................................... 347Zia Mody and Aditya Vikram Bhat
Chapter 24 INDONESIA ......................................................................... 362Luhut M P Pangaribuan
Chapter 25 IRELAND .............................................................................. 375Andy Lenny, Claire McGrade, Gareth Murphy and Sara Carpendale
Chapter 26 ISRAEL .................................................................................. 390Shraga Schreck and Daniella Schoenker-Schreck
Chapter 27 ITALY ..................................................................................... 416Monica Iacoviello, Vittorio Allavena, Paolo Di Giovanni and Tommaso Faelli
Chapter 28 JAPAN .................................................................................... 440Tatsuki Nakayama
Chapter 29 JERSEY .................................................................................. 454David Steenson and Nicholas Mière
Chapter 30 KUWAIT ............................................................................... 467Kaashif Basit and Basem Al-Muthafer
Chapter 31 LIECHTENSTEIN ................................................................ 479Christoph Bruckschweiger
Chapter 32 LITHUANIA ......................................................................... 489Ramūnas Audzevičius and Mantas Juozaitis
Chapter 33 LUXEMBOURG ................................................................... 504Michel Molitor
Chapter 34 MALAYSIA ............................................................................ 515Tiang Joo Su and Yin Faye Lim
Contents
viii
Chapter 35 MAURITIUS ......................................................................... 533Muhammad R C Uteem
Chapter 36 MEXICO ............................................................................... 547Miguel Angel Hernández-Romo Valencia
Chapter 37 NETHERLANDS .................................................................. 563Ruud Hermans and Margreet Poot
Chapter 38 NIGERIA ............................................................................... 583Babajide Ogundipe and Lateef Omoyemi Akangbe
Chapter 39 NORWAY .............................................................................. 598Jan B Jansen and Sam E Harris
Chapter 40 PORTUGAL .......................................................................... 613Francisco Proença De Carvalho
Chapter 41 ROMANIA ............................................................................ 624Levana Zigmund
Chapter 42 SAUDI ARABIA .................................................................... 636Mohammed Al-Ghamdi and Paul J Neufeld
Chapter 43 SCOTLAND .......................................................................... 656Jim Cormack and Laura Crilly
Chapter 44 SINGAPORE ......................................................................... 671Thio Shen Yi, Karen Teo and Freddie Lim
Chapter 45 SOUTH AFRICA .................................................................. 684Gerhard Rudolph and Nikita Young
Chapter 46 SPAIN .................................................................................... 702Esteban Astarloa and Patricia Leandro Vieira da Costa
Chapter 47 SWEDEN .............................................................................. 725Jakob Ragnwaldh and Niklas Åstenius
Contents
ix
Chapter 48 SWITzERLAND ................................................................... 737Peter Honegger, Daniel Eisele, Tamir Livschitz
Chapter 49 TURKEY ................................................................................ 755H Tolga Danışman
Chapter 50 UKRAINE .............................................................................. 774Sergiy Shklyar and Markian Malskyy
Chapter 51 UNITED ARAB EMIRATES................................................. 785D K Singh and Sharon Lakhan
Chapter 52 UNITED STATES ................................................................. 796Nina M Dillon and Timothy G Cameron
Chapter 53 UNITED STATES: DELAWARE .......................................... 812Elena C Norman and Lakshmi A Muthu
Chapter 54 VIETNAM ............................................................................. 831Do Trong Hai
Appendix 1 ABOUT THE AUTHORS .................................................... 845
Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS .... 877
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eDiToR’s PReface
Building on the previous five editions under the editorship of my partner Richard Clark, I am delighted to have taken on the role of editor from him. The Dispute Resolution Review has grown to now cover 54 countries and territories. It is an excellent resource for those, both in-house and in private practice, whose working lives include involvement in disputes in jurisdictions around the world.
The Dispute Resolution Review was first published in 2009 at a time when the global financial crisis was in full swing. Against that background, a feature of some of the prefaces in previous editions has been the effects that the turbulent economic times were having on the world of dispute resolution. Although at the time of writing the worst of the recession that gripped many of the world’s economies has passed, challenges and risks remain in many parts of the world.
The significance of recession for disputes lawyers around the world has been mixed. Tougher times tend to generate more and longer-running disputes as businesses scrap for every penny or cent. Business conduct that was entrenched is uncovered and gives rise to major disputes and governmental investigation. As a result of this, dispute resolution lawyers have been busy over the last few years and that seems to be continuing as we now head towards the seventh anniversary of the credit crunch that heralded the global financial crisis. Cases are finally reaching court or settlement in many jurisdictions that have their roots in that crisis or subsequent ‘scandals’ such as LIBOR.
The other effect of tougher times and increased disputes is, rightly, a renewed focus from clients and courts on the speed and cost of resolving those disputes, with the aim of doing things more quickly and for less, particularly in smaller cases. The Jackson Reforms in my home jurisdiction, the United Kingdom, are an example of a system seeking to bring greater rigour and discipline to the process of litigation, with a view to controlling costs. Whether such reforms here and in other countries have the desired effect will have to be assessed in future editions of this valuable publication.
Jonathan CottonSlaughter and MayLondonFebruary 2014
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Chapter 4
Belgium
Geert Bogaert and Stéphanie De Smedt1
I INTRODUCTION TO DISPUTE RESOLUTION FRAMEWORK
i Structure of the state – legal system
The Kingdom of Belgium is a federal state divided into three regions (Brussels-Capital, Flanders and Wallonia) and into three linguistic communities (French, Dutch and German – the three official languages). The competences of these regions and communities complement those of the federal state. Although Belgian legislation comprises both federal legislation (laws and royal decrees) and legislation enacted by the communities (decrees) and regions (ordinances), the judiciary is exclusively organised at the federal level.
Belgium has a civil law system. Therefore, in theory, legislation is the one and only primary source of law; in practice, however, case law and scholarly opinion are of some importance, as they have an influence on the interpretation of law and its evolution.
Since Belgium is a member of the European Union and a party to the ECHR, it has to apply European legislation and comply with rulings of the European Court of Justice (Luxembourg) and the European Court of Human Rights (Strasbourg). Moreover, international and Belgian law are considered to form a single legal system, where self-executing international legal rules prevail over domestic law.
The Belgian Constitutional Court ensures compliance with the constitutional division of powers between the federal state, the communities and the regions and the application of specific articles of the Belgian Constitution, such as the principles of equality, non-discrimination and the rights and liberties in respect of education. It may repeal any (part of any) law, decree or ordinance, and also has exclusive jurisdiction for interpreting the articles of the Constitution that are in its field of competence.
1 Geert Bogaert is of counsel and Stéphanie De Smedt is an associate at Loyens & Loeff.
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ii Judiciary
At the first judicial level, the court of first instance includes a civil court, a criminal court and a juvenile court.
Commercial disputes are dealt with by the commercial courts and labour disputes by the labour courts (both composed of one professional judge and two ‘consular’ judges coming from the industry sector).
The justices of the peace have jurisdiction for small litigation (not exceeding €1,860) as well as specific disputes, such as neighbourhood nuisance. Traffic offences and their civil consequences fall within the jurisdictional remit of the police courts.
Serious criminal cases are dealt with by the courts of assizes, the only ones in Belgium to have a jury.
The appellate level is nearly exclusively concentrated around the courts of appeal, before which the judgments of the court of first instance and of the commercial courts may be appealed. Judgments of the labour courts may only be appealed before the Court of Labour.
The court of first instance has, for its part, jurisdiction in appeals against decisions of the justices of the peace exceeding €1,240 and against decisions of the police courts.
Finally, the Court of Cassation has sole jurisdiction for the review of judgments against which no ordinary appeal is possible any longer. It will only decide on matters of interpretation of the law, without dealing with the facts of the case.
It is worth nothing that, insofar as Belgium is a federal state dealing with three official languages, there are mandatory rules regarding the language in which the proceedings must be conducted, depending, among other things, on the linguistic identity of the community in which the defendant has his domicile or is registered. Proceedings taking place in the Flemish-speaking part of Belgium must thus be conducted in Dutch, for example, while in the Brussels region, the plaintiff can decide to use Dutch or French. In the Brussels region, however, the defendant can request that the case be conducted in the other language if he or she is not able to defend himself or herself in the language in which the proceedings were initiated.
Written documents that are filed in proceedings in support of arguments must, in principle, be translated into the language of the proceedings if they are in another language.
As a consequence of the 6th State Reform, the judicial district of Brussels (Brussels-Halle-Vilvoorde) has been reorganised. The majority of the courts in this judicial district (except for the justices of the peace) have now been split into separate French-speaking and Dutch-speaking courts,2 both having jurisdiction for the whole territory of the judicial district Brussels-Halle-Vilvoorde. Also, from now on, there will be two fully fledged public prosecutors (one for Brussels and one for Halle-Vilvoorde). In practice, these changes will enter into force as soon as all the practical aspects of the reorganisation are dealt with.
2 Which will replace the existing system where one court would have both French-speaking and Dutch-speaking chambers.
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iii Alternative dispute resolution
The mandatory rules – together with the public character of judicial litigation and the slowness thereof – are reasons enough to lead parties to agree to settle their dispute by alternative dispute resolution (ADR) methods (see Section VI, infra).
II THE YEAR IN REVIEW
i Interruption of the period of prescription
The Act of 23 May 2013 inserted a new cause for interruption of prescription periods in Article 2244 of the Belgian Civil Code.
In the past, creditors were often forced to take legal action against defaulting debtors in order to interrupt the prescription period (i.e., the statute of limitations). Sending a formal notice letter did not suspend or interrupt the prescription period, and many debtors kept deliberately putting off payment of their debt until the corresponding right became time-barred.
By virtue of the Act of 23 May 2013, formal notice letters sent by the creditor’s lawyer are also able to interrupt the prescription period. The requirements set out by law are that the notice letter must be sent by registered mail, that the addressee (the debtor) must have his domicile, habitual residence or registered seat in Belgium, and that the notice letter must contain several mandatory indications. When these requirements are fulfilled, the notice letter will interrupt prescription for a maximum period of one year.
In addition, formal notice letters sent by bailiffs and (in certain circumstances) by representatives of trade unions will produce the same effect, provided that they meet the aforementioned requirements.
By inserting this new ground for interruption of prescription periods in the Civil Code, the Belgian legislator aims to prevent abuse by defaulting debtors of the rules governing prescription and to allow creditors to avoid unnecessary costs.
ii Probative value of a private contract co-signed by the lawyers of the contract parties
The Act of 29 April 2013 grants special probative value to private contracts that are co-signed by the lawyers of the contract parties.
When a private contract is co-signed by the lawyer of each party with a different interest, in as many original copies as there are parties with different interests, it is considered to constitute conclusive evidence of the existence of this contract, and of the signature of all parties concerned, both between the parties themselves, and between their inheritors and successors in title.
By co-signing the contract, the lawyers declare (and guarantee) that they have fully informed the contract party represented by them of the legal consequences of their signature to the contract.
The aim of the legislator is to provide a greater degree of legal certainty to contract parties and to try to reduce the judicial backlog by avoiding discussions regarding the content and signature of a given contract.
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iii On 16 May 2013 Belgium’s House of Representatives adopted a new law in arbitration that is meant to replace Part VI of the Belgian Code of Civil Procedure
The main purpose was to modernise the Belgian Arbitration Law and to align Belgium’s Arbitration Law with the UNCITRAL Model Law.
The aim was also to affirm Belgium as a pro-arbitration country and to attract more international arbitration proceedings (see Chapter VI).
III COURT PROCEDURE
i Overview of court procedure
In Belgium, the role of courts is limited to resolving disputes. Judges may not refuse to hand down a decision even if the law is silent, obscure or incomplete.
The various court and arbitration procedures as well as the enforcement of decisions or arbitral awards are, in principle, governed by the Belgian Judicial Code. International conventions or European Regulations, however, will prevail over the Judicial Code if applicable.
The burden of proof lies with the party alleging a fact. All parties nevertheless have a duty to collaborate with the gathering of evidence. The judge may order a party refusing to collaborate to submit written evidence it has in its possession.
The hearing of witnesses is conducted by the judge. Parties’ counsel are not allowed to cross-examine the witnesses called upon by the other party. As explained in more detail in Section II.iii, supra, the Judicial Code now also recognises evidence by means of written declarations of third-party witnesses.
The judge can also appoint, at his own discretion or upon request of (one of ) the parties, a technical expert who will draw up a report as to the result of his investigations. The report is communicated to the parties and then filed with the clerk’s office. The judge is not bound by the findings of the expert report but in practice will follow the expert’s opinion unless he or she has valid reasons to disagree.
As regards territorial jurisdiction, proceedings can, in principle, be initiated before the judge of the domicile of the defendant, of the place where the legal obligations are born, or of the place where the legal obligations were, are being or have to be performed.
Jurisdiction clauses between (Belgian) parties are valid and enforceable unless contrary to mandatory rules. The nature of the claim, its economic value, its urgency and the status of the parties will have an influence on the material jurisdiction of a court.
ii Procedures and time frames
In Belgium, proceedings are normally initiated by way of a writ of summons,3 served by a bailiff on the defendant in person (an employee or legal representative in the case of
3 Before initiating proceedings, one party can invite the other, under supervision of the judge, to settle the case. If an agreement is reached between the parties, it will be enacted by the judge and binding upon the parties. If no agreement is reached, proceedings will be initiated. Under
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a legal entity) or at his or her domicile (registered seat in the case of a legal entity). The writ must mention the identity of the claimant and of the defendant, as well as the claim and the main arguments supporting it. It must indicate the judge having jurisdiction and the date of the introductory hearing. To allow the defendant to prepare a defence, the introductory hearing takes place eight days after service of the writ (less in the case of urgency). A longer period is provided for if the defendant is domiciled outside Belgium.4
If parties agree, proceedings can also be initiated by way of voluntary appearance before the courts.
Procedure on the meritsRegarding procedure on the merits, three scenarios are possible at the introductory hearing:a the case only calls for ‘short pleadings’;5
b the case is to be prepared for trial; orc the defendant does not show up.
If the case only calls for short pleadings, it will be dealt with at the introductory hearing or postponed to a near date. To call for short pleadings the case has to be simple (e.g., undisputed invoices or appointment of an expert).
More complex cases have to be prepared for trial. The claimant must communicate to the defendant all relevant documents and pieces of evidence within eight days following the introductory hearing. Although the Judicial Code provides for deadlines for the filing of submissions, they are not mandatory and are often disregarded by the parties. After having exchanged their submissions, parties jointly request the judge to schedule a date for a court hearing. If one party (usually the defendant) is not willing to collaborate with the other party to jointly and voluntarily request this date, the latter can file a petition requesting the judge to schedule a date for the hearing.
To avoid unnecessary delays, parties usually agree on a procedural agenda setting out deadlines for the communication of the pieces of evidence supporting their arguments and the filing of their submissions. Such procedural agenda is then confirmed by the judge at the introductory hearing. As a result, the deadlines set out in the procedural agenda are binding upon the parties. When confirming the procedural agenda, the judge will also schedule a date for the hearing of the case.
If the parties are not able to agree on a procedural agenda and the legal deadlines are not complied with, the most diligent party can file a petition requesting the judge to impose a binding procedural agenda upon the parties. In its decision setting out the procedural agenda, the judge will also schedule a date for the hearing of the case.
Belgian law, there is no obligation to try to settle the matter (under supervision of a judge) before initiating legal proceedings unless such is explicitly provided for by law.
4 See Section III.v infra.5 It must have been requested by the claimant in the writ of summons or by the defendant at the
introductory hearing.
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Submissions that are not filed with the clerk’s office and communicated to the other party within the deadlines are rejected from the proceedings.
Court hearings are, in principle, open to the public. At the end of the hearing the case is closed. Courts must normally hand down their decision within a month following the closing of the case, although this deadline is not mandatory and Belgian courts usually take longer to hand down their decisions.
In commercial matters, the average duration of a case varies between nine and 18 months depending on the complexity of the matter at hand.
The deadline to lodge an appeal is one month from notification or service of the decision.6 There are four different ways to lodge an appeal:a service of a writ of appeal by a bailiff;b filing of a petition with the clerk’s office of the appellate court;c sending a registered letter to the clerk’s office of the appellate court if provided by
law; ord filing and communicating submissions relating to all parties involved in the
appeal proceedings.
The act of appeal must mention the reasons for which the decision of the first judge is disputed. The defendant in appeal can lodge an incidental appeal by way of submissions. Cases in appeal are conducted in the same way as cases in first instance. However, obtaining a decision in appeal can take two to three years. Lodging an appeal usually results in a complete stay of enforcement of the judgment handed down in first instance unless the judge has authorised provisional enforcement of the decision, which must be explicitly requested and justified.
If the defendant does not appear in court on the date of the introductory hearing indicated in the writ of summons, the claimant can request that the decision be handed down ‘by default’. A judgment by default will not be enforceable against the defaulting party if it has not been notified within one year.
The deadline to lodge an opposition against such judgment is one month from notification or service of the judgment. The opposition is lodged by serving a writ of opposition, mentioning the reasons for which the judgment is disputed, by bailiff. The case will be re-examined by the same judge as the one who handed down the judgment by default. Lodging an opposition usually results in a complete stay of enforcement of the judgment by default unless the judge has authorised provisional enforcement thereof.
A party whose rights were adversely affected by a decision handed down pursuant to proceedings in which it was not involved can lodge a third-party opposition. The deadline to lodge a third-party opposition is three months starting from service of the decision upon the third party. The third-party opposition is lodged by serving a writ of third-party opposition by bailiff. The case will be handled by the same judge as the one who handed down the judgment adversely affecting the right of the third party. If the
6 This period of time is extended to 15 days following the start of the judicial year if it starts and expires during the judiciary summer recess (the months of July and August). If the decision is not notified or served, the deadline to lodge the appeal is 30 years.
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third-party opposition is held to be well founded, the judge will set aside the decision in relation to the third party only.
In civil and commercial matters, petitions can be filed with the clerk’s office of the Court of Cassation against decisions handed down in last instance, albeit for an assessment of points of law only, not of fact. Prior to filing, the petitions have to be served by a bailiff on the defendant. Only attorneys admitted7 to plead before the Court of Cassation can file such petitions, which must explicitly contain the legal provisions that are allegedly breached by the disputed decision.
The deadline to file a petition with the Court of Cassation is three months following notification or service of the disputed decision. Filing such a petition does not result in a stay of enforcement of the judgment handed down in last instance.
The Court of Cassation will either reject the petition or accept it and quash the disputed decision. If the Court rejects the petition, the disputed decision is final. If the Court partially or totally quashes the disputed decision, it will refer the case to a court of the same rank as the court that handed down the disputed decision. The court to which the case has been remanded is, in principle, not bound by the decision of the Court of Cassation. It will re-examine the matter entirely and hand down a new decision.
On average, a decision from the Court of Cassation can be obtained within a year.
Special proceedingsObtaining a final decision on the merits is a rather long process that is sometimes incompatible with the pace of today’s (business) life. There are high risks that the claimant might suffer irreparable or substantial damage before a final decision on the merits is handed down.
The Judicial Code therefore provides for:a summary proceedings entitling the claimant to obtain an order awarding interim
relief, which will remain valid until a decision on the merits is rendered; b injunction proceedings entitling the claimant in specific matters to obtain a
decision on the merits but following the rules of summary proceedings; andc preliminary attachment proceedings entitling the claimant to obtain an order
freezing the defendant’s assets (including bank accounts and real estate) to prevent the latter from making them disappear and to ensure the enforceability of a later decision on the merits.
Summary proceedingsThe presidents of the courts of first instance, of the commercial courts and of the labour courts have jurisdiction to hand down interim relief orders in matters falling within the ambit of the courts they preside.
Two requirements have to be met for an interim relief order in summary proceedings to succeed: the case must be urgent and the requested order must be provisional.
7 There are only 20 attorneys allowed to plead before the Court of Cassation.
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The matter is urgent if further delay in examining the case might cause damage or loss to the claimant. Such damage or loss need not be irreparable but must be real and substantial. The court president will balance the interests of the parties. He will ascertain whether the interim relief order causes damage or loss to the defendant and whether such damage or loss outweighs the damage allegedly suffered by the claimant. Urgency must still prevail at the time of handing down of the interim relief order.8
The interim relief order is provisional if it does not cause any prejudice to the merits of the case. The president is therefore not entitled to hand down an order that contains a declaration of rights, affects the rights of the parties or triggers a change in their legal position. The president will, however, examine the merits of the case and whether there is a ‘presumption of specific legal basis’ (fumus boni iuris) in favour of the claimant. He will then issue an interim relief order in accordance with the likely rights of the parties, but the court deciding on the merits later on will not be bound by the order handed down by the president.
Summary proceedings are usually initiated by way of writ of summons. The standard period of time between service of the writ and the introductory hearing is two days. This two-day period can be reduced in the case of extreme urgency.9 A longer period is provided for if the defendant is domiciled outside Belgium.10 Interim relief orders can be appealed within one month.
In case of absolute necessity, summary proceedings can be initiated ex parte, by filing a unilateral petition with the clerk’s office of the president. Overwhelming urgency or guaranteeing a ‘surprise effect’, such as obtaining an order for collection of evidence without the defendant being informed, out of fear that if the latter knows of the claimant’s intention any and all incriminating evidence will disappear, constitute absolute necessity within the meaning of the Judicial Code. Third parties whose rights are adversely affected by the interim relief order can file a third-party opposition.
Interim relief orders are provisionally enforceable. Lodging an appeal or filing a third-party opposition will not result in a stay of enforcement of the order issued. To exercise pressure on the losing party, the president can also impose a civil fine that will be forfeited if the losing party does not abide by the interim relief order. The fine can be imposed by unit of time (hours or day) lapsed until the losing party complies with the order or by act performed by the losing party in infringement of the order.
In exceptionally urgent cases, interim relief orders can be obtained the same day as the court hearing. In normal circumstances it takes about four to six weeks after the introduction of the case for the decision to be handed down by the president.
8 If urgency cannot be established, the claimant can request the judge on the merits to issue an interim relief order at the introductory hearing (Article 19,2° of the Judicial Code).
9 The president can shorten, upon request of the claimant, to less than two days, the period of time between service of the writ and the introductory hearing. The president can decide to hear parties during a legal holiday and even hold the hearing at his private home
10 See Section III.v, infra.
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InjunctionsThe presidents of the courts of first instance and commercial courts also have jurisdiction to issue injunctions (cease-and-desist orders) in some matters.11
Injunctions are decisions on the merits but initiated, prepared for trial and rendered following the rules governing summary proceedings. Urgency is not, however, a requirement for injunctions to be granted.
In addition and to compel the losing party to abide by the injunction, the president can impose a fine that will be forfeited if the losing party does not comply with the injunction in a timely fashion or if it keeps on performing actions in infringement of the order.
Preliminary attachment proceedingsIn principle, claimants must request prior authorisation from the judge of seizure12 before freezing a party’s assets. Such authorisation is obtained by filing an ex parte petition.
Before granting such authorisation, the judge of seizure will verify that the monetary claim supporting the attachment proceedings is certain, due and liquid. In addition, the claimant must establish that the freezing of a party’s assets is urgent because the recovery of its claim would otherwise be jeopardised.
Preliminary attachment proceedings take little time. Decisions of the judges of seizure in this matter are provisional and are not on the merits.
Enforcement of domestic decisionsBefore being enforceable in Belgium, Belgian decisions have to be served by a bailiff on the party against whom enforcement is sought. If it does not voluntarily comply with the decision, its assets (including bank accounts and real estate) can be attached.
iii Class actions
Although the interest in group actions or group litigation has remarkably increased over the past few years, the Belgian legal system still does not provide for ‘class action’ proceedings or an equivalent thereof. Spurred by EU initiatives13 and widely reported
11 Such as the Act of 6 April 2010 on Market Practices and Consumer Protection.12 Judges of seizure are members of the courts of first instance. 13 A number of initiatives on ‘collective redress’ have already been taken by the European
Commission. The term ‘collective redress’ is used to emphasise that no US-style class action is contemplated. Upon instruction of the European Commission several studies were conducted, including a study by the University of Leuven (Belgium) on alternative means of consumer redress other than redress through ordinary judicial proceedings (see http://ec.europa.eu/consumers/redress/reports_studies/comparative_report_en.pdf ). The European Commission also published a Green Paper on Consumer Collective Redress that raised a number of ideas subject to further reflection. In furtherance hereof a consultation paper was published in 2009. In February 2012, the European Parliament adopted a resolution rejecting US-style class actions. The European Commission’s work programme for 2012 listed ‘An EU framework
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lawsuits, the Belgian legislator has taken several initiatives to introduce a class action equivalent,14 so far without results.
Obstacles to the introduction of a class action equivalent are Articles 17 and 18 of the Judicial Code. According to these articles each party to proceedings must autonomously exercise its own rights and interests. In other words, to bring a claim, the claimant needs to have a personal interest. The Court of Cassation added hereto that the interest of an association that unites the victims of a certain event is the mere sum of the personal interests of the victims, but cannot constitute the personal interest of that association. As a consequence thereof, proceedings brought by organisations or associations that seek to benefit third parties, are not admissible.
This conflicts with the idea underlying class action proceedings, in which one single named claimant can bring proceedings not only on his or her own behalf but also on behalf of all the members of the class.
Exceptions to the individualistic principle of Articles 17 and 18 of the Judicial Code are only provided by statute (e.g., Article 113 of the Act of 6 April 2010 on Market Practices and Consumer Protection, which allows professional organisations and recognised consumer associations to commence injunction proceedings for the benefit of the collective interest of its members, however, without the right to claim damages.)15
In the absence of a class action equivalent, mass litigation is brought in Belgium by bundling the large number of claims into one case, whereby the individual claimant has been represented by a specially appointed proxy. It goes without saying that such a system does not excel in efficiency but instead creates major practical and administrative issues for the courts as well as for the parties.16
Consumer associations and investor organisations are lobbying at both European and national level for the introduction of a class action equivalent. Taking into account the current inefficient way of dealing with mass litigation, it is only a matter of time before it is introduced into the Belgian legal system.
for collective redress’ for the fourth quarter of the year. It nevertheless remains unclear which concrete initiatives Europe is planning to take in this regard in the near future.
14 Several parliamentary questions and discussions have been raised hereupon, and a number of legislative initiatives were taken. In February 2012, a draft bill was submitted to the parliament addressing a number of procedural aspects of the introduction of class action proceedings in the Judicial Code. In May 2012, the Minister of Consumer Affairs also announced that he is working on a consumer class action procedure. Finally, in July 2013, a bill ‘setting up a type of class action under Belgian law’ was submitted to the parliament. This bill is currently being discussed in parliament.
15 Other statutory exceptions are the Act of 31 March 1898 on professional organisations and the Act of 5 December 1968 on unions.
16 The absence of a single address for service purposes can cause practical issues with respect to the filing of an appeal.
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iv Representation in proceedings
Parties in civil and commercial matters are usually represented by their counsel. Theoretically, natural persons and legal entities through their legal representatives are allowed to present their own defence. If parties are unable to present their arguments in a calm and clear manner, courts can, pursuant to Article 758 of the Judicial Code, enjoin them to present their cases through counsel. The assistance of counsel is only mandatory in civil and commercial matter for filing a petition with the clerk’s office of the Court of Cassation or for filing an ex parte petition.
v Service out of the jurisdiction
Under Belgian law, prior court authorisation is not required for the serving of a writ of summons or other legal document on a defendant (natural person or legal entity) having no known domicile or residence in Belgium.
Belgium is party to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, which puts in place a system of judicial assistance between contracting states ensuring that judicial and extrajudicial documents to be served abroad are brought to the notice of the addressee in sufficient time.
Belgium is also bound by Regulation (EC) 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the Service in the Member States of judicial and extrajudicial documents in Civil or Commercial Matters, which applies between all Member States of the European Union including Denmark, which concluded a parallel agreement.
This Regulation supersedes the Hague Convention if service of documents between Members States of the European Union is concerned.
If the writ of summons is served outside Belgium, the standard period of time between the service of the writ and the introductory hearing is, pursuant to Article 55 of the Judicial Code, extended:a by 15 days for neighbouring countries (France, the Netherlands, Luxembourg
and Germany) and the United Kingdom;b by 30 days for other European countries; andc by 80 days for other countries in the world.
vi Enforcement of foreign judgments
Enforcement in Belgium of judgments handed down in Member States of the European Union in civil and commercial matter is governed by Council Regulation (EC) 44/2001 of 22 December 2000.
Enforcement in Belgium of judgments handed down in other countries is governed by international bilateral and multilateral conventions to which Belgium is party, and, in the absence of conventions, by Articles 23 and 25 of the Belgian Code of International Private Law.
A party wishing to enforce a foreign judgment in Belgium has to submit an application to the Court of First Instance or in exceptional circumstances to the Commercial Court (ex parte proceedings). The enforcement of foreign judgments is authorised by way of an exequatur decision.
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Belgium is also bound by Regulation (EC) 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims. This Regulation lays down minimum standards to ensure that judgments, court settlements and authentic instruments on uncontested claims can circulate freely. Judgments on uncontested claims handed down in another Member State will, if they meet the requirement of this Regulation, be automatically enforced in Belgium without the need for an exequatur decision.
vii Assistance to foreign courts
Pursuant to Council Regulation (EC) 1206/2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters, Belgian courts of first instance may be requested by another court of another Member State to take evidence.
Requests for acts of investigation must be sent to the clerk’s office of the court of first instance having territorial jurisdiction for the place where the act of investigation (or the largest number thereof ) is to be carried out.
Belgium is also party to the Hague Convention on civil procedure of 1 March 1954.17 In civil or commercial matters a judicial authority of a contracting state may, in accordance with the provisions of the law of that state, apply, by means of a letter of request, to the Belgian Ministry of Justice to request Belgian courts to take evidence.
In the absence of an international convention, letters of request from foreign judicial authorities requesting Belgian courts to take evidence can be performed, provided they have been authorised by the Ministry of Justice.
If the court that has to perform the letter of request is located in the Dutch-speaking part of Belgium, the request will have to be submitted in Dutch. If the court that has to perform the letter of request is located in the French-speaking part of Belgium, the request will have to be submitted in French. In Brussels, a special regime applies.
Concerning requests for information on Belgian law, procedure in civil and commercial matters or Belgian judicial organisation made by foreign courts, Belgium is party to the European Convention on Information on Foreign Law. Requests for assistance and information from foreign courts are transmitted to the Belgian Ministry of Justice.
viii Access to court files
In civil and commercial matters, members of the public have no access to files pertaining to ongoing or completed proceedings. Only parties and their counsel have access to the files on the proceedings.
However, court hearings are held in public, except when circumstances (usually for reasons of public interest) justify that the hearings take place behind closed doors.
Court decisions are also public. Copies can be obtained from the clerk’s office of the court that has handed down a decision.
17 Belgium is not party to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 18 March 1970.
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ix Litigation funding
To our knowledge, litigation funding (where a third-party funder agrees to pay some or all of the litigation costs in return for a share of the proceeds if the litigant wins the case but nothing if the litigant loses) does not exist in Belgium.
Litigants who are not able to afford litigation costs and counsel fees can, provided they meet certain requirements, benefit from pro Deo assistance in Belgium, whereby such costs and fees are paid by the state.
IV LEGAL PRACTICE
i Conflicts of interest and Chinese walls
Conflicts of interestConflicts of interest are governed by the rules of conduct of the two Belgian bar associations (one for the Flemish bars and a second one for the French and German-speaking bars).
The rules regarding conflicts of interest are similar, part of the more general obligation of independence of each lawyer in his relationship with his clients. The duty of independence is considered to be the key obligation of each lawyer and justifies the privileges given to the profession.
There is a conflict of interest whenever a lawyer, when assisting a client, is influenced by the interest of other clients, former clients or third parties or even by personal interest, with the result that he adopts another defence, makes another analysis or deploys a different strategy.
Such influence must not be demonstrated, but a conflict arises whenever this influence is objectively very likely.
In these conditions a lawyer must refrain from acting for a client and he may, upon failure to do so, face disciplinary proceedings before his relevant bar authority. The same prohibition to act applies to members of the same law firm or the group of lawyers sharing working costs.
There are limited circumstances in which lawyers are permitted to act for more than two clients despite the existence of a possible conflict.
Acting against an existing clientA lawyer can act against an existing client insofar as:a it is generally known that this client systematically instructs different lawyers and
if, in the specific case, he has instructed another lawyer or will do so; b the lawyer’s intervention for this client was very occasional; orc this client explicitly agrees thereto.
Acting against a former clientA lawyer can act against a former client insofar as:a the former client has instructed another lawyer in the new case, which is not
related to the previous case in which the lawyer intervened;
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b the former client has instructed another lawyer in the new case and explicitly declares to have no objection to the intervention of the lawyer, even in a case that is closely linked to the previous case in which the lawyer received instructions;
c it is publicly known that the previous client systematically instructs different lawyers and if, in the specific case, he has instructed another lawyer or will do so;
d the lawyer intervened occasionally for the previous client; ore the previous client explicitly agrees to the intervention of the lawyer.
In any case the lawyer must inform his second client that he intervened in the past for the first client.
Acting for opposing partiesIt may occur that a lawyer intervenes in parallel in two cases: in one case he is instructed by a client and in the other case he is instructed by the opposing party of this client.
This is only permissible with the consent of the first client.Belgian rules on conflicts are quite liberal and flexible and leave margin for a
lawyer to act against an existing or a former client in cases that are not related to each other, mainly because the client has an obligation of loyalty towards the lawyer as well: a client cannot expect his lawyer to act exclusively for him and prevent other parties with opposing interests from requesting this lawyer to intervene.
Whenever there is room for interpretation or doubt, the opinion of the Bar Authorities will be of decisive importance and breaches of the no-conflict rules are punished by the Bar Authorities.
Chinese wallsClients with opposite interests can agree to be assisted by the same law firm. In such a case, Chinese walls or information barriers can be implemented, provided they offer sufficient guarantees to safeguard the confidentiality of information.
Not only a physical separation and separate teams but also controlled access to the relevant IT systems must be organised in order to prevent access by one team to the confidential information of the client of the other team.
ii Money laundering, proceeds of crime and funds related to terrorism
Belgian anti-money laundering measures impose on lawyers both a prohibition and an obligation. The Belgian Criminal Code prohibits acts of money laundering. The Act of 11 January 1993 on the prevention of the use of the financial system for the purpose of money laundering and the financing of terrorism compels lawyers under certain circumstances to perform client due diligence and to report unusual financial transactions, including those by their clients, to the President of the Bar Association, who can then transfer the information to an authority created for this purpose, the Financial Intelligence Processing Unit (CTIF-CFI).
Article 505 of the Criminal Code prohibits each act of receiving goods that result from a criminal act. This also covers the purchase, exchange, possession, etc. of goods whose criminal origin should normally have been known. The same is true for the transfer or sale of such goods for the purpose of concealing the illegal origin of these
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goods. The danger for lawyers is that, by supplying advice and preparatory work, they might be considered to participate in such acts.
The Act of 11 January 1993, as principally modified by the Acts of 12 January 2004 and 18 January 2010, implements Directive 2005/60/EC of the European Parliament and the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, as well as Commission Directive 2060/70/EC of August 2006 of the European Parliament and the Council as regards the definition of a politically exposed person and the technical criteria for simplified customer due diligence procedures and for exemption on grounds of a financial activity conducted on an occasional or very limited basis. The Act applies to lawyers when they participate in financial or corporate transactions in general, including providing advice. In such a case they have an obligation to identify their clients. They further have an obligation to report unusual transactions to the president of the Bar Association to which they belong. However, these obligations do not apply to lawyers when they are ascertaining their client’s legal position or performing their task of defending or representing that client in, or concerning judicial proceedings.
iii Data protection
At European level, the cornerstone of data protection law is Data Protection Directive 95/46/EC. In Belgium, the Data Protection Directive has been implemented by the Belgian Act of 8 December 1992 on the protection of privacy in relation to the processing of personal data (the Data Protection Act).18
The Data Protection Act applies where the controller’s place of establishment is located in Belgium. In other EU countries, as a result of the implementation of the Data Protection Directive, similar rules apply.
First of all, the Data Protection Act provides for obligations to be observed by the controller of personal data, notably with respect to the use of such data and the safeguarding of the data subject’s rights: a ensuring the legitimacy of data processing;b specifically informing data subjects (in some cases, prior written consent of data
subjects is required);c ensuring the security and confidentiality of the processing and possible transfer of
data to third parties; andd filing a notification with the Belgian Privacy Commission (unless exempted).The
Privacy Commission keeps a public register of all notifications filed and such public register is accessible free of charge.
Secondly, the data subject has (inter alia) the following rights: a the right to obtain specific information when his or her personal data are obtained;
18 The EU data protection regime is currently under revision. The (heavily debated) Commission proposal for a Data Protection Regulation (COM(2012) 11 final) should provide for uniform data protection rules in the entire EU. The new Regulation is expected to enter into force in 2015-2016.
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b the right to object to the processing of personal data for direct marketing purposes; c the right of access to his or her personal data and the right to obtain rectification
of inaccurate personal data (free of charge); andd the right to obtain the deletion of all personal data or the prohibition to use such
data when incomplete or irrelevant in the light of the purpose(s) of the processing, when the recording, communication or storage of these data is prohibited, or when the data are stored for longer than permitted.
Within the EU, personal data may, in principle, be freely transferred. Personal data that are transferred to a country outside the EU may only be transferred if the third country in question ensures an adequate level of protection (save specific derogations). In any case, the security and confidentiality of the personal data must be guaranteed.
These rules also apply to the processing of personal data by legal professionals. As Belgian lawyers are bound by professional secrecy, and their correspondence is in principle confidential (save specific derogations), in the case of sharing of personal data between lawyers located in Belgium, the confidentiality requirement will almost automatically be met. In the case of data transfer from Belgian lawyers to foreign lawyers, or to other legal professionals (both nationally and internationally), the Belgian lawyer will still be bound by his or her duty of professional secrecy. The transfer of data will then be subject to strict requirements.
The Belgian Privacy Commissions monitors companies’ compliance with the Data Protection Act. Non-compliance can give rise to criminal sanctions (fines up to €600,000).
V DOCUMENTS AND THE PROTECTION OF PRIVILEGE
i Privilege
Legal privilege is a general principle of law and of public policy. The term is generally used to cover both confidentiality (of documents) and professional secrecy, an obligation that is not limited in time and is related to all information the lawyer obtains when assisting his client.
In Belgium, privilege cannot be waived by the client.A lawyer must refuse to give testimony in front of a court on facts that were
entrusted to him by his client.The duty to preserve the professional secret is provided for in Article 458 of the
Criminal Code.This duty is imposed upon legal professionals admitted to the bar. Those who are
not entitled to pursue under such title do not fall within the statutory provisions.Correspondence between such a lawyer and his or her client is covered by legal
privilege.It is the nature of the legal profession that a client will give his or her lawyer
information that must be kept confidential, and the lawyer cannot disclose such information. When the principle of legal privilege conflicts with the interests of discovering the truth in legal proceedings, the principle of privilege will prevail and the lawyer must respect his or her duty of confidentiality.
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Correspondence between lawyers admitted to the bar is in principle confidential, and they cannot agree to qualify their correspondence as non-confidential. The Dean of the Bar decides on any dispute as to the (non-)confidential nature of correspondence between lawyers.
There are a number of exceptions to this principle.The most important exception is the rule that a confidential settlement proposal
becomes official once it has been unconditionally accepted by the other party.The lawyer making a settlement proposal must therefore be sure to be covered by
his client.Correspondence between the parties and between one party’s lawyer and the other
party is not regarded as confidential and can be produced in court.The profession of in-house counsel is regulated by the Act of 1 March 2000,
creating the Institute of Company Lawyers.This Act provides that correspondence between an employer or client and an in-
house counsel is confidential.In a recent decision, the European Court of Justice confirmed that communications
by in-house lawyers who are regulated by Bar rules or other regulations should not be protected by legal professional privilege.
The decision thereby confirms the distinction to be made as to the application of legal privilege between the (employed) in-house lawyer and the self-employed lawyer who offers his or her services.19
ii Production of documents
In the Belgian civil judicial system, each party bears in principle the burden of proving its allegations (Article 870 of the Judicial Code and Article 1315 of the Belgian Civil Code) and must produce in court the factual elements on which the claim is based.
In commercial cases all types of evidence are possible. In practice, however, while written evidence is produced, the calling of witnesses is seldom heard in Belgian courts.
The courts can freely evaluate evidence on its merits, and in specific circumstances (Article 871 of the Judicial Code), the court may order a party to produce specific unfiled documentary evidence, provided there are serious reasons to believe that this party retains this document and that this production can help to disclose a relevant fact.
VI ALTERNATIVES TO LITIGATION
i Overview of alternatives to litigation
In the last few years, there has been growing interest in ADR, in particular arbitration (mainly for corporations) and mediation.
19 Once the proposed Data Protection Regulation enters into force, these fines could amount to €1 million or 2 per cent of a company’s annual worldwide turnover. The proposed text also grants additional supervision and sanctioning powers to national data protection authorities.
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The Belgian legal framework of both mediation and arbitration can be found in the Judicial Code. Part VI (Articles 1676 to 1722) covers the rules with respect to arbitration, while part VII (Articles 1724 to 1737) deals with mediation.
ii Arbitration
Any pecuniary claim may be submitted to arbitration. Non-pecuniary claims with regard to which a settlement agreement may be made, may also be submitted to arbitration.
Whoever has the capacity or is empowered to make a settlement may conclude an arbitration agreement.
iii Types of arbitration
There are two types of arbitration, namely:a ad hoc arbitration, where the parties or the arbitrators themselves determine
and define the rules applicable to the proceedings, insofar as they comply with mandatory rules laid down in the Judicial Code, which further provides the legal framework for ad hoc arbitration (Article 1693 of the Code). If certain aspects are not covered by the parties’ convention, the arbitral tribunal itself shall determine the procedural rules; and
b institutional arbitration.
The best-known arbitration centre in Belgium is the CEPANI/CEPINA, the Belgian Centre for Mediation and Arbitration, which offers several methods for the settlement of disputes (arbitration, mediation, mini-trial, etc.).20
The CEPANI/CEPINA arbitration offers legal certainty because procedural rules are known in advance and the CEPANI/CEPINA Secretariat controls and monitors the correct application of the procedural rules and the smooth running of the proceedings.
The CEPANI/CEPINA also provides accelerated proceedings for disputes in which the amount at stake does not exceed €12,500.
Arbitration costs are fixed by the Secretariat on the basis of the amount of the principal claim and of any counterclaim. They include the fees and expenses of the arbitrators as well as the administrative expenses of the Secretariat.
The Court of Arbitration of International Chamber of Commerce (ICC) is a highly respected institution, specialising in international and business disputes. Its most distinctive feature is that the ICC examines the draft award, as prepared by the arbitrators, before drawing up an opinion on the case and the award. The arbitrators are, however, not obliged to follow the observations of the Court, which are merely a guarantee of the quality of an ICC award. The Court further organises and supervises the arbitration proceedings. The costs and the arbitrators’ fees are fixed on the basis of a scale that takes into consideration, inter alia, the diligence of the arbitrators, the time spent, the rapidity of the proceedings and the complexity of the dispute.
20 ECJ, 14 September 2010, Akzo Nobel Chemicals and Akros Chemicals v. Commission, C-550/07 P.
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Conditions for a valid arbitration in distribution mattersDisputes concerning an exclusive distributorship agreement are arbitrable. However, there is some discussion regarding the arbitrability of a unilateral termination of an exclusive distributorship agreement. According to mandatory Belgian legislation, the distributor may bring an action against the principal in Belgium, if the distributor suffered damage or loss as a result of the unilateral termination of the distributorship agreement.
If the dispute is submitted to a Belgian court, the latter shall exclusively apply Belgian law (Article 4 of the Act of 27 July 1961 concerning the unilateral termination of exclusive distributorship agreements). Moreover, this mandatory Belgian legislation explicitly states that it must be applied despite any and all agreements concluded before the end of the exclusive distributorship agreement (Article 6 of the Act of 27 July 1961).
Article 4 and Article 6 of the Act of 27 July 1961 together imply that the conclusion of an arbitration agreement prior to the ending of the distributorship agreement is not allowed.
Nevertheless, the majority of scholarly opinion and case law agree that, given the concept of favor arbitrandum, these provisions do not affect the validity of an arbitration clause in a distributorship agreement, if such clause prescribes the applicability of Belgian law.
iv New law on arbitration
In 2013 major changes occurred since both the Belgian Arbitration Law and the CEPANI (Institutional Arbitration) arbitration rules have been changed. In addition CEPANI has enacted new Mediation Rules.
The new Belgian Arbitration Law of 24 June 2013 provides a more efficient framework for arbitration based on the UNCITRAL Model Law on International Commercial Arbitration. The new Law, which came into force on 1 September 2013 and applies to arbitrations that were initiated on or after that date applies both to national and international arbitration.
The new law provides broader criteria for arbitrability, increases party autonomy and the efficiency of arbitration and thereby the attractiveness of Belgium, and Brussels as a place of arbitration.
New provisions on provisional and conservatory measures are introduced, as well as more pragmatic principles for the conduct of arbitration proceedings.
Main features of the new Arbitration Law There will be broader criteria for arbitrability. The law gives a definition of the scope of arbitrability that includes all disputes involving an economic interest, unless expressly excluded by law. In practice this definition includes most commercial disputes.
Under the new law no written arbitration agreement is required. This does not mean that, for evidentiary purposes, a written agreement will still be required to provide evidence of the consensus between parties.
All arbitration-related court proceedings are centralised before the courts of first instance at the seat of the five courts of appeal (Brussels, Antwerp, Ghent, Liège and Mons).
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Article 1680 of the Belgian Judicial Code gives power to the presidents of the courts of first instance to make decisions as in summary proceedings, in a matter of days or weeks. These decisions, which, for instance, relate to the withdrawal of an arbitrator, the challenge of an arbitrator or the failure or impossibility to act of an arbitrator, or to the taking of evidence, shall not be subject to any recourse. Only decisions in which the president of the court rules that there is no ground for the appointment of an arbitrator are exempted from this rule.
The new Arbitration Law introduces a comprehensive regime of interim and conservatory measures. At the request of a party arbitral tribunals may grant interim of conservatory measures. Articles 1692 to 1698 of the Belgian Judicial Code provide for a detailed and comprehensive set of rules for provisional matters by an arbitral tribunal. Such measures are enforceable in Belgium, regardless of the form in which they have been rendered. The arbitral tribunal may require the party requesting an interim or conservatory order to provide appropriate security. However, the arbitral tribunal may not order attachment orders. Interim measures can be ordered in the form of an arbitral award or in another form such as a procedural order. These powers granted to the tribunal do not prevent the president of the tribunal of first instance from taking interim measures in the case of summary proceedings, if urgency is demonstrated.
As regards recourse against an arbitral award, an appeal can only be launched against an arbitral award if the parties have provided for that possibility in the arbitration agreement (Article 1716 Belgian Judicial Code). The arbitral award may only be contested before the court of first instance and on specific grounds as mentioned in Article 1717 of the Judicial Code. Other arbitration-related claims, such as applications for the annulment or recognition and enforcement of arbitral awards, will also be governed by the court of first instance. The arbitral award can only be set aside on a limited number of grounds and in certain circumstances, which are listed in Article 1717, Paragraph 3 of the Judicial Code. However, for certain grounds it is also required that the alleged ground did indeed influence the arbitral award.
v New 2013 CEPANI Arbitration Rules
The CEPANI has adopted new Rules of Arbitration and Mediation replacing the previous set of rules in force since 2005. The new Rules apply to all arbitration proceedings filed with CEPANI after 1 January 2013. The new Rules equal the new ICC Rules of Arbitration amended in 2012. The new CEPANI Rules include provisions on multiparty arbitration, confidentiality, electronic communications, challenge of arbitrators and the possibility to call upon an ‘emergency arbitrator’.
The 2013 version of the Rules constitutes the largest revision of the Rules since its adoption in 1972.
The main innovations of the 2013 CEPANI Rules are the following.
Multiparty arbitration – Articles 9–13The 2005 CEPANI Rules only contained one article on multiparty arbitration (the former Article 12). The current 2013 Rules deal with multiparty arbitration in no fewer than five provisions. Article 9 formulates the general principle that arbitration may
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take place between more than two parties when they have agreed to have recourse to arbitration under the CEPANI rules.
Following Article 10 a single arbitration proceeding can handle claims arising out of different contracts and out of different arbitration agreements, if all parties have agreed to a CEPANI arbitration; and all parties have agreed to have their claims being decided within a single procedure.
Article 11 provides that a third party is allowed to intervene in a pending arbitration proceeding, or that a party in a pending arbitration proceeding can request the intervention of a third party to the arbitration.
Articles 13 provides that when one or more contracts containing a CEPANI arbitration agreement give rise to separate arbitrations that are related or indivisible, the pending arbitration proceedings can be consolidated.
Confidentiality – Article 25 A specific rule on confidentiality was not included in the 2005 CEPANI Rules, which only prescribed that hearings shall not be public save with the approval of the Arbitral Tribunal and that persons not involved in the proceedings shall not be admitted. The new Article 25 of the 2013 Rules stipulates that the arbitration proceedings are confidential, unless it has been agreed otherwise by the parties or unless there is an applicable legal disclosure obligation.
Emergency arbitrator – Article 26 An important novelty is Article 26 of the 2013 CEPANI Rules on interim and conservatory measures prior to the constitution of the arbitral tribunal. This Article 26 is heavily inspired by Article 29 of the ICC Rules (i.e., the appointment of an ‘emergency arbitrator’).
Article 26 provides for a swift procedure in which an (emergency) arbitrator has to be appointed within two working days, and a decision has to be rendered within 15 days of receipt of the file by the emergency arbitrator.
vi Mediation
ConfidentialityOne of the main characteristics of mediation is the confidentiality of the process. The Judicial Code provides that all documents drafted and all communications made during, and for the purpose of, the mediation process are confidential.
The mediator, the parties and their counsel are bound by a duty of confidentiality, namely, a mediation privilege. This implies that these documents and communications may not be used in judicial, administrative, arbitral or other proceedings. Only with the unanimous consent of all parties may one reveal documents or communications that fall within the scope of confidentiality. This provision fosters a climate of trust in the negotiations and favours disclosure of the parties’ real interests, as well as the loyal behaviour of the parties toward each other, which is reflected in a satisfactory agreement.
These interests can be revealed during a caucus. Caucuses are confidential meetings that mediators hold separately with each side of a dispute. These meetings give each party the opportunity to redefine or clarify its point of view, identify new offers, or discuss and
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weigh the other parties’ proposals in private. The information communicated during the caucus is also covered by the mediation privilege.
Different types of mediationVoluntary mediationEven during judicial or arbitral proceedings, parties may agree to resolve their dispute through mediation and they are free to decide which organisation or person will guide the mediation and to determine the procedure that will apply. They decide by mutual agreement, with the assistance of the mediator, upon the procedural rules of conduct applicable to the mediation.
If the proposal for mediation is sent by registered mail and if it contains a claim, the proposal is to be equated with a formal notice. The proposal shall therefore be the starting point for the computation of legal interest.
If parties succeed in resolving their dispute, a settlement agreement will be drawn up and signed by all parties. In principle, the settlement agreement is not equal to a judgment and is not enforceable. However, if the mediation was led by an accredited mediator, the parties may ask the court to validate and certify the agreement they have reached. The agreement shall then be legally enforceable as if it were a judgment.
No appeal is possible against a homologated settlement agreement.
Judicial mediationA court may order mediation in pending proceedings if a request for mediation was formulated by the parties, or of its own initiative but with the consent of the parties. Parties must agree on the name of the mediator, who must be accredited.
When the parties jointly request mediation, the time limits in relation to the proceedings are suspended as from the date on which they formulate their request. Judicial mediation is conducted in the same way as voluntary mediation.
If mediation leads to a settlement agreement, even if the agreement is only partial, the parties may ask the court to homologate said agreement.
Closing remarksMediation is not yet very popular in commercial and corporate cases. The Bar Authorities are, however, increasingly promoting mediation as an appropriate remedy to resolve disputes. A successful mediation is less time-consuming compared with traditional ways of dispute resolution, and is likely to result in a continuation of the parties’ commercial or other relationship. Moreover, parties will not have weakened their position in the case of an unsuccessful mediation, as mediation documents and proceedings are covered by confidentiality.
vii New law on mediation
Not only the CEPANI Arbitration Rules were amended as from 1 January 2013.The CEPANI Mediation Rules likewise were revised. They were rewarded and
restructured so to align them with the Mediation Rules that have been operative since the 1 January 2010 for the Resolution of Disputes in the field of information and communication technology (ICT).
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As a consequence of this alignment and consolidation the ICT Mediation Rules no longer exist as a separate set of rules as on 1 January 2013.
VIII OUTLOOK AND CONCLUSIONS
The much-debated reorganisation of the judicial district of Brussels-Halle-Vilvoorde finally brought an end to the political impasse that dominated the Belgian landscape for many years. However, so far, the Belgian legislator has done little to adapt the legal environment to the growing interest in arbitration and mediation and their fast and pragmatic solutions.
On 5 July 2013 two law propositions concerning the procedures on collective claims were approved by the Council of Ministers. It is expected that in the first part of 2014 more details of the law will be made available.
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about the authors
Geert BoGAertLoyens & Loeff Geert Bogaert is of counsel at Loyens & Loeff and is head of the commercial law and dispute resolution group of the Brussels office. He has extensive experience in commercial litigation and in arbitration, both as counsel and as arbitrator. He is very familiar with the automotive and retail sectors, where he represents prestigious clients in commercial and contractual disputes. He works in both national languages (Dutch and French) and is fluent in English, Italian and German. He is Vice-President of the Belgian Italian Chamber of Commerce and member of the board of the European Indian Chamber of Commerce.
StéphAnie De SmeDtLoyens & LoeffStéphanie De Smedt is an associate in the commercial law and dispute resolution group of Loyens & Loeff. She specialises in commercial litigation, intellectual property and privacy law, having done an LLM in European competition and intellectual property law at the University of Liège. Stéphanie De Smedt is a member of the Brussels Bar.
LoyenS & LoeffWoluwe Atrium101-103 Neerveldstraat1200 BrusselsBelgiumTel: +32 2 743 43 43Fax: +32 2 743 43 60 / [email protected] www.loyensloeff.com