Brussels International Business Court: preliminary draft bill approved

On 27 October 2017 the Belgian Council of Ministers approved a preliminary draft bill for the creation of the “Brussels International Business Court” (“BIBC”), a special state court, where proceedings are conducted in English.

Background

Mr. Koen Geens, Belgian Minister of Justice, finds that recent national and international economic and political developments show “a considerable need for a Belgian specialised top level state court, which can decide cross-border commercial disputes in the English language being the lingua franca of international business”. Geens expects an increase in international business litigation for instance  as a result of “Brexit”. Geens wishes to maintain and strengthen the role played by Brussels, as the seat of many international European institutions and companies, at the European and international forum. The creation of an Anglophone state court is a such not unique. Last year the Netherlands introduced a draft bill for the creation of the “Netherlands Commercial Court” and  the “Netherlands Commercial Court of Appeal” (see below: comparison between BIBC and NCC).

Main characteristics  Brussels International Business Court:

Jurisdiction BIBC:

BIBC has only jurisdiction if the parties have agreed to submit a dispute to BIBC (e.g. forum clause before or after the dispute has arisen) and only in international disputes.

A dispute is “international”, if:

a)       The parties are domiciled or established in different states;

b)      The place where a substantial part of the obligations resulting from the commercial relationship have to be executed or the place to which the dispute is most narrowly connected, is outside the place of domicile of the parties;

c)       The parties explicitly agreed that the subject of the dispute is connected to more than one state;

d)      The elements for the solution of the dispute are part of a foreign law;

Also public institutions can be a party to BIBC proceedings under certain conditions in matters subject to private law.

No appeal:

Decisions of BIBC are not subject to appeal, but are subject to “cassation” on points of law.   

Composition:

BIBC will be composed of both state judges and lay judges, who are called “Judges in the BIBC”. The composition of the Chambers of the BIBC will vary depending on the nature of the dispute and the expertise required. The President of the BIBC – him- or herself  member of the specialized Market Court of the Brussels court of Appeal – will compose the Chambers especially for the dispute submitted to BIBC on an ad hoc basis. The presiding member will be a state judge, who can in principle be selected from any court in Belgium, whilst the 2 other members are lay judges, chosen from a selected list of  attorneys, university professors etc.  with expertise in international commerce and with sufficient knowledge of the English language, coming from inside or outside Belgium.

Seat:

The seat of BIBC is in Brussels but BIBC is organically not part of any specific Belgian Court. It is a Court for the whole of the Belgian territory.

Procedural law:

BIBC will conduct the proceedings as it considers appropriate, of course always with due observance of essential principles of due process. A  special section (“Special Procedures”) will be introduced in the Belgian Code of Civil Procedure, which shall govern only BIBC proceedings and which shall overrule the rules of procedure applicable before “ordinary” Belgian Courts. The BIBC section will contain many provisions which are copied from the UNCITRAL Model Law.

Proceedings are started by means of a writ. BIBC  decides on the terms within which plaintiff and defendant shall present their respective written submissions.  BIBC decides whether the proceedings will take only the written form or that  there will also be hearings for oral arguments or submission of evidence by witnesses or experts.

BIBC may appoint one or more experts in order to report on specific factual, technical or legal aspects.

Provisional measures, such as injunctions, are available in BIBC proceedings.

Applicable law:

BIBC applies the law chosen by the parties. In the absence of a choice of law, BIBC will decide on the applicable law in conformity with applicable rules of international law. An interesting question seems, whether BIBC will be obliged to apply mandatory rules of Belgian law, such as for instance Belgian distribution law (art. X.39 Code on Economic Law).

Amicus curiae:

Others than the parties may submit written opinions to BIBC on relevant points of law as “amicus curiae” at the request of BIBC or with its previous permission.

Fees and costs:

BIBC shall be self-supporting. The parties shall pay a “substantial registration fee”,  which shall cover in particular the special fees for the lay judges and the administrative personal made available to BIBC. Minister Geens estimates that a BIBC Judge will on average spend 5 days on a case and that the costs for the 2 BIBC judges will therefore be € 1000,00 – € 1250,00/day x 5 x 2 = € 10.000,00 – € 12.000,00. The lay judges will also be entitled to a compensation for travel and accommodation costs.  The state judge and the registrar will not receive a special allowance for their involvement in BIBC. Additional costs are court taxes and costs for specific procedural incidents. In its final judgment BIBC will allocate costs to the parties.

Main differences with the “Netherlands Commercial Court (“NCC”)”

a)       NCC is a specialized Court, part of the Amsterdam Court, composed of a special pole of specialized (Dutch) state judges for claims exceeding € 25.000,00. It is expected that as from the start 10 state judges are made available on a part time basis. Hearings take place in Amsterdam.

Although it is a Belgian State Court, BICC is not part of any specific Belgian Court. However it is a Belgian state court. The seat is Brussels, but hearings can take place anywhere. It has a hybrid character, being composed of state judges and lay judges. BIBC lay judges can be non-Belgian.

b)      NCC proceedings are only available, if the parties explicitly agree thereto. A forum clause in general terms and conditions does not qualify as an explicit choice for NCC proceedings. NCC proceedings are also available if both parties are domiciled in The Netherlands.

BICC proceedings are available if the parties explicitly agree to submit their dispute to BICC, which shall have an international character.

c)       NCC judgements are open to appeal (before “The Netherlands Court of Appeal”) and “cassation” ( “cassation” before “de Hoge Raad”,  conducted in Dutch). BIBC judgments are not open to appeal, but are subject to “cassation” (“cassation” before “het Hof van Cassatie” or “Cour de Cassation”) conducted in French or Dutch).

d)      Dutch procedural law is applicable in NCC proceedings. The bulk of the UNCITRAL-Model Act on international commercial arbitration will be incorporated in Belgian procedural law and will only be applicable to BIBC proceedings.

e)      NCC registration fees will be € 15.000,00 (first instance), € 20.000,00 (appeal), € 7500,00 (NCC summary proceedings, e.g. injunction proceedings) and € 20.000,00 annulment proceedings arbitration awards.

BIBC registration fee is estimated at € 10.000,00 – € 12.000,00 to be increased with normally applicable court taxes, depending on the value of the claim or the nature of the dispute.

Comment

Both Belgium and The Netherlands decided to offer an alternative to often expensive and complicated court proceedings in common law countries and/or to expensive international arbitration proceedings. This is in particular important for small and middle seized companies. The success of NCC and BIBC will largely depend on the quality of the infrastructure and on the active role these special courts are willing to play in securing speedy and efficient proceedings, resulting in high quality judgments.

Contact Mr. Marinus Vromans for more information on this subject (02/721 13 00 or marinus@siriuslegal.be)