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MEDIATION AS A SOLUTION FOR FOREIGN COMPANIES IN BELGIUM

November 2008 - Litigation & Dispute Resolution. Legal Developments by Cruyplants Eloy Wagemans & Partners .

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It is a sad but true fact of business life that foreign companies doing business in or with Belgium, just like elsewhere in the world, will sooner or later be involved in disputes with their Belgian counterparty. These disputes cover a broad spectrum of difficulties, ranging from disputes about the delivery of products or services to difficulties arising in the case of joint venture, shareholder, distribution, agency or other relationships.

Faced with such a dispute the traditional reaction of most parties has been to attempt to negotiate and in the event of negotiations breaking down to issue formal notice and to commence legal proceedings. This way of proceeding does however involve a number of disadvantages, not the least of which is that it generally results in an immediate breaking-off of the commercial relationship between the parties.

The alternative is of course to attempt mediation. Following the introduction of the law on mediation [See CEW Newsletter N°1], mediation is now becoming a well-established practice in Belgium. There are already in Belgium a significant number of qualified and accredited mediators, including not only lawyers but also other professionals and technical specialists, who have the necessary skills and training to act as professional mediators. Such mediations can be, and frequently are, conducted in English or in another international language. It is also perfectly possible for the mediation to take place, wholly or partially, outside Belgium in a venue that is mutually convenient for the parties.

As in other countries, mediation in Belgium allows for creative solutions to business disputes which better serve the interests of the parties involved and which go far beyond the draw, win or lose result that is the outcome of most litigation.

Mediation can also be particularly effective where the dispute is complex and involves problems, including possibly litigation, in several jurisdictions.

As a matter of practice agreements resulting from a successful mediation are normally abided by and performed. However the Belgian mediation law has an added bonus in that it provides that mediation agreements that are negotiated under the auspices of an accredited mediator have the same legal value as a court judgment and, subject to court vetting for matters of public policy, may be enforced as such. This is a significant factor for foreign companies who may wish to see their mediation agreement applied and enforced in countries outside Belgium in the same way that is possible for a final court judgment and on the basis of the international treaties to which Belgium is a party.

Last but not least, mediation, although it does involve an extra investment in terms of paying for the mediator's costs, allows for substantial economies in legal expenses and management time.

Michel GONDA

For more information please visit www.cew-law.be

Or email michel.gonda@cew-law.be

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