Following a request for a preliminary ruling from the Brussels Court of First Instance (“CFI”), the Constitutional Court (“CC”) held in a judgment of 16 February 2017 that third parties should be entitled to lodge third-party opposition against arbitral awards, but they should not be able to rely on the limited grounds of annulment against arbitral awards to challenge arbitral awards directly.
A company that was not a party to an arbitration proceeding, but nevertheless felt aggrieved by an arbitral award given in 2012, initiated third-party opposition proceedings before the CFI seeking the annulment of the arbitral award. The CFI stayed the proceedings and referred two questions to the CC for a preliminary ruling.
In its first question to the CC, the CFI asked whether Article 1122 of the Judicial Code (which allows third parties to challenge the validity of judgments given by a civil or a criminal court by means of third-party opposition) violates the provisions of the Belgian Constitution on equality and non-discrimination, as it does not offer the same possibility to third parties to arbitral proceedings. In its second question, the CFI asked whether Article 1717 of the Judicial Code (which lists the requirements for challenging an arbitral award by the parties) violates the same constitutional provisions on equality and non-discrimination, as it does not offer this possibility to third parties.
In response to the first question, the CC found that the difference in treatment between third parties to arbitral proceedings and third parties to judicial proceedings is based on an objective criterion (ie, the nature of the court: judicial court versus arbitral court), but it is not reasonably justified in the light of the purpose of the measure; first, because court judgments and arbitral awards have the same effects towards third parties; and second, because the choice to refer a case to arbitration is made by the parties to a dispute, while third parties have no influence on this choice. The CC concluded that Article 1122 of the Judicial Code violates the Belgian Constitution and third-party opposition against arbitral awards should therefore be admissible.
In replying to the second question, the CC found that Article 1717 of the Judicial Code, which only allows parties to arbitral proceedings to challenge an arbitral award, was justified and was therefore not discriminatory. The CC relied on a judgment of the Supreme Court of 29 January 1993 which had found that third parties to arbitration proceedings were excluded from the scope of Article 1717 of the Judicial Code unless those third parties are able to demonstrate that the arbitration was brought for the purpose of undermining their rights (eg, in the case of fraud). In the light of this judgment, the CC made clear that an action for annulment brought against an arbitral award cannot be likened to an appeal. It added that a challenge against an arbitral award is a procedure which is unique to arbitral proceedings and is primarily intended for the parties to the arbitral proceedings to contest an award because of specific irregularities affecting either the award itself or the arbitral proceedings, whereas third parties are only concerned with the enforceability of the award, not by the flaws of the award or the arbitral proceedings, so that they cannot challenge arbitral awards directly.