New Belgian Arbitration Act enters into force

  1.    Belgium adopts the Uncitral Model Law

On 1 September 2013, the new Belgian Arbitration Act (the 'Arbitration Act') entered into force1. The Arbitration Act is based on the Uncitral Model Law on International Commercial Arbitration, with amendments adopted in 2006 (the 'Model Law')2. Belgium is the 65th country and 16th European member state to have modelled its arbitration legislation on the Uncitral Model Law. With this, Belgium aims to affirm its pro-arbitration stance and to attract more international arbitration proceedings.

The scope of application of the Arbitration Act is all-encompassing and is therefore not restricted to international commercial arbitration. It applies to any arbitration proceedings seated in Belgium, whether domestic or international and whether commercial or not.

The Arbitration Act will apply to arbitration proceedings that have been initiated after 1 September 2013. On-going proceedings remain subject to the Act of 4 July 1972 as last amended on 19 May 1998.

  1.  Key changes to Belgian arbitration legislation

The new Arbitration Actamendsseveral key aspects of Belgian arbitration legislation. The mostsignificant changes are describedbelow.

Firstly, the Arbitration Actbroadens the category of disputes thatcanbesubmitted to arbitration. Previously, disputes were arbitrable if theycouldvalidlybe the object of a settlement agreement. Now, disputes of a pecuniary nature are distinguishedfromother types of disputes. The oldcriterionstillapplies to the latter category, while the former category of disputes canbesubmitted to arbitration withoutany restriction.

The phrase 'dispute of a pecuniary nature' must beconstruedbroadly. As is the case in Switzerland, it must beunderstood as 'any claim that has a pecuniary value for the parties, whether in terms of assets or liabilities or, in otherwords, rightsthat are valuable in cash for at least one of the parties''3.

The Arbitration Actalso clarifies the limits of subjective arbitrabilitywith respect to State entities. Under the previouslegislation, State entitiescouldconclude arbitration agreements for disputes relating to the conclusion and performance of contracts. The new Arbitration Actis more general and stipulatesthat State entitiesmaysubmitanycontractual dispute to arbitration.

Secondly, the efficiency and proficiency of arbitration-relatedjudicialproceedings are greatlyimproved.

The new Actentrusts to five specific Courts jurisdiction to hear all mattersrelating to arbitration proceedings. The competent Courts are the five Tribunals of First Instance4locatedat the seat of the Courts of Appeal. These five lower courts willtherewith gain auseful expertise in arbitration matters.

Most judgmentsrendered by the lower courts can no longerbeappealed. This is the case for judgmentsconcerning the appointment5, challenge, and replacement of arbitrators as well as thoseconcerning the taking of evidence. This isalsotrue for decisions on the setting aside and enforcement of arbitral awards. Parties canhoweverstill challenge the lowercourt's decision on a point of lawbefore the Court of Cassation.

Thirdly, the Arbitration Actintroduces a comprehensiveregime of interim and conservatorymeasures. This regimeislessdetailedthanthat of the Uncitral Model Law. The Belgianlegislatureopted for a more flexible approach, and therefore, many of the 2006 amendments to the Model Law were not included in the Arbitration Act.

Arbitral tribunalsmay, at the request of a party, grantinterim or conservatorymeasures (otherthan protective attachments). Contrary to the Model Law, the Arbitration Actdoes not set forth the conditions underwhichinterim and conservatorymeasuresmaybegranted, nordoesitenumeratewhatthesemeasuresmightbe. The Arbitration Actleavesthese issues to the discretion of the arbitral tribunals.

With regard to enforceability, the Arbitration Actfollowslargely Articles 17H and 17I of the Model Law6. Interim or conservatorymeasuresordered by an arbitral tribunal are binding and enforceable. Grounds for refusingenforcement of suchmeasures are set out in the Arbitration Act.

Fourthly, grounds for setting aside and refusing recognition or enforcement of arbitral awards have been alignedwiththose of the Model Law. The Arbitration Actaddstwoadditional grounds to the list, namely the arbitral tribunal's failure to state the reasons for its decision7and the factthat the arbitral tribunal has exceededits powers8. With respect to certain grounds, the setting asideissubject to such grounds having been invokedduring the arbitral proceedings or havinghad an impact on the arbitral tribunal's decision.

Under the new Arbitration Act, non-Belgian parties and entitiesmaystillexclude in their arbitration agreement the right to apply for the setting aside of arbitral awards. This is a peculiarity of Belgianlaw, whichisonlyshared by Switzerland and Sweden.

  1. Conclusion

The entry into force of the new Arbitration Actbringswelcoming changes to Belgian arbitration legislation. It takes place after the adoption by the Belgian arbitration centre (CEPANI) of new arbitration rulesearlierthisyear and confirms Belgium's favourable attitude towards arbitration. The new Arbitration Act, coupledwithBelgium's central position in the heart of Europe, purports to make the country more attractive to foreign parties. It remains to beseenwhatBelgiumwillbe able to offerwhencompared to otherhistorical arbitration hubs