Chapter 7

Belgium Koen Van den Broeck

Allen & Overy LLP Thales Mertens

I. LITIGATION Normal proceedings in first instance take approximately 1.5 years. Proceedings on appeal take approximately two to three years. 1 Preliminaries 1.4 What is ’s local judiciary’s approach to exclusive clauses? 1.1 What type of legal system has Belgium got? Are there any rules that govern in Belgium? To the extent these clauses comply with the applicable national and Belgium has a civil law-based system, with (national and international rules, these clauses are accepted. international) statutes, as interpreted by case-law, governing both substantive and procedural issues. 1.5 What are the costs of civil proceedings in Civil procedure is for the most part governed by the codified rules Belgium? Who bears these costs? Are there any of civil procedure, set out in the Belgian Judicial Code. Additional rules on costs budgeting? rules governing civil procedure are set out in separate statutes (such as, for instance, the Act on the use of language dated 15 June Costs for civil proceedings in Belgian proceedings are split into 1935), treaties and European regulations (most notably the Council formal costs (for filing and administrative steps) and a (limited) Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction compensation for legal costs. For the latter costs, a fixed indemnity and the recognition and enforcement of judgments in civil and (set by the Belgian legislator) can be claimed, the amount of which commercial matters). varies in relation to the complexity of the dispute and the amounts in dispute. Costs (within the limits described above) are in principle borne by 1.2 How is the civil court system in Belgium structured? What are the various levels of appeal and are there the losing party. any specialist ? There are no rules on cost budgeting (mainly as costs are only partially recoverable in Belgium). The Belgian civil court system is split into several “first instance” courts (including the civil court of first instance and the commercial 1.6 Are there any particular rules about funding litigation court). Decisions of “first instance” courts can in most cases be in Belgium? Are contingency fee/conditional fee appealed to the appellate courts. Finally, decisions of the appellate arrangements permissible? What are the rules courts can be overturned by the Belgian Supreme Court. pertaining to security for costs? Specialist courts exist for various matters, such as commercial matters, employment matters, and attachment proceedings. In There are currently no set rules about funding litigation in Belgium. addition, within the various courts, the presidents of the courts have Deontological rules do prevent Belgian from accepting work jurisdiction to hear summary proceedings. on a “no win, no fee” basis, but arrangements whereby additional fees are paid in the event of a positive outcome are permitted.

1.3 What are the main stages in civil proceedings in Belgian civil procedure does not contain rules in relation to security Belgium? What is their underlying timeframe? for costs – for the most part because the costs awarded are fixed, limited, and set by the Belgian legislator. Proceedings start either by the issuance of a writ of summons or by request (for unilateral proceedings). An introductory hearing takes 1.7 Are there any constraints to assigning a claim or place thereafter, during which usually the further procedural steps cause of action in Belgium? Is it permissible for a are agreed. In exceptional circumstances, the case will be heard at non-party to litigation proceedings to finance those the introductory hearing or shortly thereafter. Normally, the parties proceedings? will agree a calendar for the filing of written submissions. Following submissions of the written submissions, the case is heard. A Contested claims can be assigned. judgment is issued thereafter (formally within one month following There is, however, an important limitation: the Belgian Civil Code the hearing, although in practice this period is usually longer). contains a rule that entitles the debtor of an assigned contested claim iclg to: LITIGATION & DISPUTE RESOLUTION 2015 www.iclg.co.uk 49 © Published and reproduced with kind permission by Global Legal Group Ltd, London Allen & Overy LLP Belgium

to discharge its obligations under the contested claim by paying an amount equal to the price paid by the assignee for the contested 3.3 What are the main elements of the claimant’s claim, increased with interest and cost. pleadings?

The claimants’ pleadings will normally contain an overview of the 2 Before Commencing Proceedings facts underlying the claim, followed by a legal analysis of these facts, in support of the claim filed. Finally, the pleadings will set out the relief requested from the court. 2.1 Is there any particular formality with which you must comply before you initiate proceedings? 3.4 Can the pleadings be amended? If so, are there any Belgium In most cases, proceedings are started by the serving of a formal writ restrictions? of summons (served by an official court bailiff) on the defendant. Yes. In normal civil proceedings, several sets of pleadings are filed, in accordance with a previously agreed filing calendar (in the 2.2 What limitation periods apply to different classes of absence of agreement between the parties, the court can set this filing claim for the bringing of proceedings before your civil courts? How are they calculated? Are time limits calendar). The pleadings can be amended within the framework of treated as a substantive or procedural law issue? the set filing dates. Some limitations do apply however; most importantly that no new Various time limitations apply to various types of claims. For claims can be filed, to the extent these are not based on elements instance, most contractual claims become time-barred within a which were set out in the initial writ of summons. period of 10 years. Most tortious claims become time-barred within a period of five years 4 Defending a Claim following discovery (by the victim of the tort) of the damage incurred. Various possibilities exist to either interrupt or suspend the limitation period (for instance, the filing of a writ of summons commencing 4.1 What are the main elements of a statement of proceedings). defence? Can the defendant bring counterclaims/ claim or defence of set-off? These time limits are, on the whole, treated as substantive issues. As far as procedural time limits are concerned (for instance, the time A statement of defence will usually set out the defendant’s factual limit within which a decision of a first instance court needs to be and legal defence against the main claim. The structure of the appealed, or opposition proceedings filed), these vary depending on statement of defence will in most cases mirror the structure of the the type of proceedings concerned, and are viewed as procedural claimant’s pleadings. issues. Counterclaims can be filed, to the extent such counterclaims are not frivolous or filed with the sole intent to delay the main claim. 3 Commencing Proceedings 4.2 What is the time limit within which the statement of defence has to be served? 3.1 How are civil proceedings commenced (issued and served) in Belgium? What various means of service are there? What is the deemed date of service? How is The calendar for the filing of pleadings (including the statement of service effected outside Belgium? Is there a preferred defence) is normally agreed upfront, and confirmed by the court. method of service of foreign proceedings in Belgium? The parties are accordingly free to agree these time limits – once agreed, however, they become binding. In the absence of an Civil proceedings are for the most part commenced by the serving agreement between the parties, the court will set the filing calendar. of a writ of summons. This writ is served by a court bailiff, who can serve the writ in person or by letter. Service is deemed to have 4.3 Is there a mechanism in your civil justice system occurred on the date listed by the bailiff on the writ (the date on whereby a defendant can pass on or share liability by which the document was served in person, or the letter issued). bringing an action against a third party? Service of a writ commencing Belgian proceedings over foreign entities is also done through the office of the (official) court bailiff, A defendant can file a claim against third parties compelling them usually following the rules set out in The Hague Convention of 15 to intervene in the ongoing proceedings, and hold the defendant November 1965 on the Service Abroad of Judicial and Extrajudicial (partially) harmless against the main claim. Such claim is allowed, Documents in Civil or Commercial Matters. to the extent it is not frivolous, or filed with the sole intent of delaying the main claim.

3.2 Are any pre-action interim remedies available in Belgium? How do you apply for them? What are the 4.4 What happens if the defendant does not defend the main criteria for obtaining these? claim?

Provisional attachment, securing assets and awaiting the outcome of A judgment in default will be issued. Opposition proceedings are, legal proceedings can be obtained. Depending on the type of asset however, possible against a judgment in default. (provisionally) attached, the party seeking such attachment must seek prior authorisation from the (attachment) court, or can proceed without prior court intervention (assisted by a court bailiff).

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4.5 Can the defendant dispute the court’s jurisdiction? 6.3 What sanctions are the courts in Belgium empowered to impose on a party that disobeys the court’s orders Yes, the defendant can dispute the court’s jurisdiction. or directions?

As explained above, a court can chose to disregard that is 5 Joinder & Consolidation not filed in accordance with the set filing calendar. No specific sanctions akin to “contempt of court” exist under Belgian procedural law. However, in very limited circumstances 5.1 Is there a mechanism in your civil justice system whereby a third party can be joined into ongoing the court can impose a fine on a party which has conducted itself proceedings in appropriate circumstances? If so, in a particularly vexatious or disloyal manner. This sanction is, Belgium what are those circumstances? however, very rarely applied.

A party to the proceedings can file a claim against third parties 6.4 Do the courts in Belgium have the power to strike out compelling them to intervene in the ongoing proceedings. Also, a part of a statement of case or dismiss a case entirely? third party can opt to voluntarily intervene in ongoing proceedings, If so, in what circumstances? to the extent this third party can show that it has the requisite standing to intervene. If filings are made, or documents produced outside of the agreed filing calendar, a court can disregard such filings or documents. 5.2 Does your civil justice system allow for the In addition, the court may disregard statements made in official consolidation of two sets of proceedings in filings which are not made in the official language of the proceedings appropriate circumstances? If so, what are those (all references in the official filings to supporting foreign language circumstances? evidence, case-law, or doctrine must be made in the language of the proceedings). Yes. Two (or more) sets of proceedings can be consolidated, to the Finally, a court may dismiss a case in its entirety for lack of extent there is a risk of contradictory judgments in the absence of jurisdiction, or in the event of inadmissibility (e.g. legal time-bars). such consolidation.

6.5 Can the civil courts in Belgium enter summary 5.3 Do you have split trials/bifurcation of proceedings? judgment?

Although not common, a request can be made to split the trial into a Yes, although only in urgent cases, and limited to provisional decision on jurisdiction, followed by a decision on the merits. The measures. court will, however, finally decide on whether or not to allow such bifurcation. 6.6 Do the courts in Belgium have any powers to discontinue or stay the proceedings? If so, in what 6 Duties & Powers of the Courts circumstances?

In very limited circumstances, a court can stay proceedings and 6.1 Is there any particular case allocation system before request the parties to first attempt . the civil courts in Belgium? How are cases allocated? In addition, if proceedings remain inactive during a long period In principle, cases are allocated on a “first come, first served” basis of time, a court can have the proceedings discontinued (following – with hearing dates set taking into account the length of the agreed reminders sent to the parties involved requesting the reactivation of filing calendar, and the availability of the court. the proceedings). However, exceptions are made for “urgent” cases, especially in the Belgian civil courts will also stay proceedings awaiting the outcome context of summary proceedings. of criminal proceedings which could impact on their decision (“le criminel tient le civil en état”). Finally, under certain circumstances, a court can discontinue 6.2 Do the courts in Belgium have any particular case proceedings for lack of jurisdiction. management powers? What interim applications can the parties make? What are the cost consequences? 7 Disclosure Belgian courts have very limited case management powers. The most notable exception to this is the power of the courts to set a filing calendar, in the absence of an agreement thereon by the parties. 7.1 What are the basic rules of disclosure in civil proceedings in Belgium? Is it possible to obtain There are various interim applications available to the parties, disclosure pre-action? Are there any classes of including a request for interim investigatory measures and (limited) documents that do not require disclosure? production of documents. There are no specific cost consequences in relation thereto. Belgian procedural law does not provide for separate disclosure or However, if interim applications are made in a frivolous manner or discovery proceedings, although parties can request the courts to with a clear intent to delay proceedings, the court may take this on order the production of one or more documents, held either by a board when awarding a compensation for costs. party involved in the proceedings or by a third party.

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The courts tend to be very strict when analysing these types of requests, and will only order production if the requesting party 8.2 What types of evidence are admissible, which ones has shown clearly that (i) a specific document or set of documents are not? What about expert evidence in particular? exists, (ii) the opposing party (or third party) is in possession of the requested document or set of documents, and (iii) such document For the most part, only written evidence, filed and presented within or set of documents is relevant to help decide the issue in dispute the timeframe of the filing calendar will be admissible. between the parties. (Party-appointed) expert evidence is admissible, but will be given Requests for the production of documents have nonetheless become less weight in light of the fact that (party-appointed) experts do not more common in Belgian court proceedings, and the authors have owe any duty to the court, and will usually defend the position of recently seen a move towards such requests being made by way of the instructed party. Belgium separate provisional “proceedings within proceedings”. Following Court-appointed expert evidence is, however, given significant a change of the Belgian Judicial Code in 2007, parties are now able weight (see below, question 8.4). to request various provisional or investigatory measures (including requests for the production of documents) at any stage in the 8.3 Are there any particular rules regarding the calling of proceedings. witnesses of fact? The making of witness statements A request for the production of documents can be made in the first or depositions? stages of the proceedings, by way of provisional (investigatory) measures ordered by the court. The use of witnesses of fact is uncommon in Belgian civil proceedings. 7.2 What are the rules on privilege in civil proceedings in A recent Belgian act (of 16 July 2012) has, however, inserted a Belgium? framework for the issuance of written factual affirmations into the Belgian Judicial Code. It is expected that the use of factual -to-lawyer communication in Belgium is in principle affirmation will become more commonplace as a result. considered privileged, and cannot be relied upon or disclosed in the context of Belgian civil proceedings. 8.4 Are there any particular rules regarding instructing Deontological rules, however, prohibit Belgian lawyers from expert witnesses, preparing expert reports and giving making statements which are contradicted by a privileged document. expert evidence in court? Does the expert owe his/her In the event a dispute arises in relation to a privileged document, duties to the client or to the court? the president of the Bar to which the lawyers belong will decide on whether, and to what extent, the document can be disclosed. Expert proceedings following (interim) judgments are common in Belgian civil proceedings. The court appoints the expert to decide on factual issues falling within the scope of his or her expertise. The 7.3 What are the rules in Belgium with respect to expert will report to the court following meetings with the parties, disclosure by third parties? and following the end of his or her own investigations. The expert owes a duty to the court, not to the parties. See above, question 7.1. Parties can opt to be assisted by their own experts – however, as these experts are not bound by a specific duty, and will in most cases 7.4 What is the court’s role in disclosure in civil defend only the interest of the party instructing them, only limited proceedings in Belgium? weight is given to their conclusions.

See above, question 7.1. 8.5 What is the court’s role in the parties’ provision of evidence in civil proceedings in Belgium? 7.5 Are there any restrictions on the use of documents obtained by disclosure in Belgium? Although the court takes a largely passive role (it does not actively investigate the parties’ position), the court has a wide range of In principle there are no restrictions, as evidence or documents discretion when deciding which weight to give to a party’s evidence. produced in civil proceedings are not subject to confidentiality rules. In limited circumstances, the court can, however, opt to intervene – for instance, a court can order an investigation of a document if 8 Evidence it has sufficient reason to suspect that a document relied upon by a party is false.

8.1 What are the basic rules of evidence in Belgium? 9 Judgments & Orders The basic principle of Belgian procedural law (“actori incumbit probatio”) is that a claimant bears the burden of proof, and must 9.1 What different types of judgments and orders are the present sufficient evidence to found its claim. Failing the provision civil courts in Belgium empowered to issue and in of sufficient evidence, the court may opt to dismiss the claim. what circumstances? Parties are allowed to file evidence supporting their position. Oral evidence is, however, for the most part uncommon in Belgian civil Belgian courts are empowered to issue a large array of types of proceedings. judgments and orders, ranging from provisional measures (ordered Belgian courts do, however, have wide discretion as to how much in the framework of summary proceedings), interim judgments, to weight should be given to a provided piece of evidence. final judgments.

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II. ALTERNATIVE DISPUTE RESOLUTION 9.2 What powers do your local courts have to make rulings on damages/interests/costs of the litigation? 1 Preliminaries

Belgian courts can make orders and rulings awarding both damages claimed, and increase the damages awarded with interest. 1.1 What methods of alternative dispute resolution are available and frequently used in Belgium? / Belgian courts can also award compensation for costs, within the Mediation/Expert Determination/ (or other framework and the limits set by the Belgian legislator. specialist courts)/Ombudsman? (Please provide a brief overview of each available method.)

9.3 How can a domestic/foreign judgment be recognised Belgium and enforced? Arbitration is often used in Belgium, most often institutional arbitration. The most common rules applied are the Cepina/Cepani (Final) domestic judgments (which are no longer subject to appeal, rules (rules of the Belgian Centre for Arbitration and Mediation) and or which are held to be enforceable notwithstanding appeal) are the ICC Rules. automatically recognised and enforceable. In relation to money Although mediation and other ADR proceedings are available, they judgments, the winning party may opt to have its judgment enforced by are used less frequently than arbitration. attaching the assets of the losing party (failing voluntary compliance). To do so, it must obtain prior authorisation of the attachment judge. 1.2 What are the laws or rules governing the different The proceedings for recognising or enforcing foreign judgments in methods of alternative dispute resolution? Belgium differ depending on whether or not the foreign judgment is issued by an EU Member State or by a non-EU Member State. The rules applying depend on the rules chosen by the parties. Most For foreign judgments issued in with which no treaty often, parties opt for arbitration under the Cepina/Cepani rules or (bilateral or multilateral) is in place with Belgium, recognition and ICC Rules. enforcement will be done in accordance with the general rules as set Belgium has also enacted a new and specific law on arbitration (in out in the Private International Law of 16 July 2004 (the PIL Code). force since 1 September 2013) that is based in large part on the In accordance with the PIL Code, foreign judgments must be either UNCITRAL Model Law. recognised or declared enforceable by a Belgian court, prior to being recognised or becoming enforceable in Belgium. 1.3 Are there any areas of law in Belgium that cannot use The PIL Code sets out that when deciding on recognition or enforcement Arbitration/Mediation/Expert Determination/Tribunals/ (or “exequatur”) requests, the Belgian courts will not review a foreign Ombudsman as a means of alternative dispute judgment as to its substance. It can, however, refuse recognition or resolution? enforcement of the foreign judgment based on one (or more) of the exhaustive refusal grounds set out in the PIL Code (relating mainly to Yes. Some disputes falling with the exclusive jurisdiction of violation of rights of defence and violation of public policy). Belgian courts (e.g. most types of employer-employee claims) are Recognition and enforcement proceedings are unilateral, i.e. the non-arbitrable. party seeking to obtain recognition or “exequatur” does not need to summon the opposing party, nor does this party need to be heard. The 1.4 Can local courts provide any assistance to parties “losing” party may, however, file opposition proceedings against a that wish to invoke the available methods of recognition or “exequatur” order, although it must be noted that such alternative dispute resolution? For example, will a opposition does not suspend the effects of the initial unilateral order. court – pre or post the constitution of an arbitral If the judgment is issued by a jurisdiction with which Belgium has a – issue interim or provisional measures of protection (i.e. holding orders pending the final treaty on enforcement, recognition and enforcement will take place outcome) in support of arbitration proceedings, will in accordance with such treaty. the court force parties to arbitrate when they have so If the judgment is issued by an EU Member State, recognition and agreed, or will the court order parties to mediate or enforcement of such judgment (in commercial or civil matters) will seek expert determination? Is there anything that is be done in accordance with the revised Council Regulation (EC) No particular to Belgium in this context? 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (entry into force on 10 The parties in arbitration can in most cases request Belgian courts to January 2015) (the Revised Brussels Regulation). The Revised issue interim or provisional measures. Brussels Regulation holds that a final court decision issued by an Belgian courts will, however, uphold arbitration agreements, to the EU Member State is recognised and immediately enforceable in extent these agreements are held to be valid and enforceable. another EU Member State, with no prior exequatur being required. Specific proceedings for the refusal of recognition or enforcement 1.5 How binding are the available methods of alternative can be held (on limited grounds). dispute resolution in nature? For example, are there any rights of appeal from arbitration awards 9.4 What are the rules of appeal against a judgment of a and expert determination decisions, are there any civil court of Belgium? sanctions for refusing to mediate, and do settlement agreements reached at mediation need to be sanctioned by the court? Is there anything that is Appeal is open to most decisions of first instance courts. In general, particular to Belgium in this context? the appeal needs to be filed within a period of one month following notification of the judgment (by court bailiff) to the opposing party, Although much will depend on the specific wording and arrangement failing which the appeal becomes time-barred. made in the arbitration clause, for the most part arbitral awards iclg to: LITIGATION & DISPUTE RESOLUTION 2015 www.iclg.co.uk 53 © Published and reproduced with kind permission by Global Legal Group Ltd, London Allen & Overy LLP Belgium

are not open to appeal. Specific set-aside proceedings (on limited In addition, we have noticed an increased trend in consolidation and grounds) remain available before Belgian courts. uniformisation of dispute resolution, as evidenced very recently by the new Belgian arbitration act, based largely on the UNCITRAL Model Law. 2 Alternative Dispute Resolution Although witness hearings are uncommon in Belgian court Institutions proceedings, there is a move towards allowing witness hearings in arbitration proceedings with a seat in Belgium. Recently, the 2.1 What are the major alternative dispute resolution French-speaking Brussels Bar (in 2010) and Dutch-speaking institutions in Belgium? Brussels Bar associations (in 2011) altered their deontological rules to allow Brussels lawyers to prepare witnesses in view of witness Belgium By far the largest and most well-known institution in Belgium is hearings. These changes have triggered an increase in witness the Belgian Centre for Mediation and Arbitration (Cepina/Cepani). hearings in (Belgian-seated) arbitration proceedings. Mediation in commercial disputes remains relatively rare, with success rates depending mainly on the parties’ will to reach a 3 Trends & Developments mutually agreeable solution to their dispute. Various institutions offer mediation services or have set out rules in relation thereto, with the most well-known being Cepina/Cepani. 3.1 Are there any trends or current issues in the use of the different alternative dispute resolution methods? Alternate dispute resolution mechanisms are rarely applied in Belgium, with the notable exception of the mechanism of binding Arbitration has become a more commonplace method of resolving third party advice. Binding third party advice clauses are relatively disputes. Parties are becoming more sophisticated and are opting common in acquisition contracts whereby the binding third party increasingly for arbitration under Cepina/Cepani rules and the advice will be of a financial nature, relating to the acquisition price. ICC Rules.

Koen Van den Broeck Thales Mertens Allen & Overy LLP Allen & Overy LLP Avenue de Tervueren 268a – 1150 Avenue de Tervueren 268a – 1150 Brussels Brussels Belgium Belgium

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Koen Van den Broeck is a partner and head of the Belgian Litigation & Thales Mertens is a senior associate in the Litigation and Contracts Contracts practice of Allen & Overy LLP. He specialises in corporate practice of Allen & Overy LLP in Brussels. He specialises in and banking litigation (including arbitration) and also advises on restructuring and insolvency-related litigation, and commercial insolvency cases and distribution law. Koen acts as arbitrator in arbitration (both national and international). Thales has published commercial disputes at Cepina, the Belgian Arbitration Institute. He on the Vienna Sales Convention and Belgian insolvency law. Thales is the author of a book on commercial agency and several articles was also previously a member of and assistant at the Institute for on product liability and distribution law. He is a regular speaker at International Trade Law at the Catholic University of Leuven. conferences.

The Allen & Overy Belgium team of nearly 100 lawyers in Brussels and Antwerp provides a full legal service to international and local corporations, financial institutions and public entities. Having been in the market for over 30 years, our Belgian clients appreciate our natural understanding of their industry and background. International clients come to us for our knowledge of the ‘ins and outs’ of doing business in Belgium. We cover litigation, corporate, M&A, finance, commercial contracts, restructuring, employment and benefits, intellectual property, IT, real estate, tax, environment, EU and competition and public law. Our Litigation team offers a full litigation service, with few other firms being able to combine the quality of individuals, specialist knowledge and depth of resources and coverage. We cover all aspects of dispute resolution, including finance litigation, post- acquisition litigation, director’s and auditors’ liability, investigations and white-collar crime, arbitration, restructuring and insolvency.

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