In a landmark decision of April 7th, 2023, the Belgian Supreme Court (C.21.0325) has ruled that such disputes can be submitted to arbitration, disregarding the fact whether the arbitrator will apply Belgian law or not. By this decision the Court distanced itself from established case law.
The Court came to that decision after applying the reasoning of the UNAMAR-decision of the CJEU (17 October 2013) to the concerned provisions of Belgian law (Art.X 35-40 Belgian Code of Economic Law), which are protecting the Belgian distributor. The Court ruled in a concise statement that the relevant provisions are mainly protecting “private” interests and are not essential for safeguarding Belgian fundamental public interests (that can be political, social or economic). The Court has concluded that the relevant provisions can therefore not be considered as “specific mandatory law” or “police law”, overriding the parties’ choice for foreign law (cfr. Art. 9.1 Rome I Regulation). Therefore, the question whether a dispute can be subject to arbitration, cannot depend on these provisions (nor from the condition that the foreign law gives the same level of protection). In a nutshell, disputes on the termination of an exclusive distributor agreement with a Belgian distributor can always be submitted to arbitration, without any further conditions.
This decision will be welcomed by foreign suppliers, who will find themselves in a better legal position, as they can avoid the concerned Belgian provisions (protecting the Belgian distributor) by providing for an arbitration clause and a choice of foreign law in their distribution contract.
Barbara Terriere, IDI Country Expert for distribution in Belgium
