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

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Belgium is a well-known centre for international arbitration. Apart from an excellent stock of well-known international arbitrators the country has a long tradition in arbitration. The Belgian Centre for Mediation and Arbitration (CEPANI/CEPINA) was founded 35 years ago and has become one of Europe’s leading arbitration organizations.

Any foreign company doing business in or with Belgium would do well to consider inserting in its contracts an arbitration clause. Amongst the advantages of arbitration, as compared to litigation before the ordinary courts, the following points are particularly worthy of mention:

(a) Arbitration is quicker than proceedings before the courts. This is because arbitration rules provide for fixed time limits for the exchange of pleadings and for the rendering of the award, which is final. This compares with court proceedings where delays occur often and where there is an automatic right to appeal any first instance judgment, which means that proceedings may drag on for several years.

(b) In arbitration the rules of procedure are determined by the parties and the rules of the Belgian Judicial Code, which govern court proceedings, may be, and often are, excluded. This is particularly important for a foreign company which may be used to operating within a legal culture and tradition which is very different from the Belgian model. By an appropriate drafting of the arbitration clause it is also possible to ensure that the arbitration proceedings are conducted in English.

(c) Arbitration allows the parties to have a strong influence on the choice of the arbitrators. The latter must be independent of the parties and their advisers but otherwise each party is free to select the arbitrator on the basis which he deems the most appropriate. Where the panel is made up of three arbitrators each party selects “his” arbitrator and the chair is chosen by the two appointed arbitrators or, failing agreement, by an appointing authority or arbitration organization. This allows for the selection of arbitrators who are particularly skilled or knowledgeable in the field of activity to which the dispute relates. The same facility is of course not available in court proceedings where the judges are appointed by the Belgian government.

(d) Contrary to popular belief, arbitration is not necessarily more expensive than court proceedings and the amount of arbitration fees is linked to the amount in dispute between the parties.

(e) Last but not least, the arbitration award will be enforceable not only in Belgium but throughout the world. Along with 142 other countries Belgium is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Charles Price

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