THE AUTHORS:
Guillaume Croisant, Counsel at Linklaters
Simon Taeleman, Junior Associate at Linklaters
Introduction
In a judgment of 26 June 2026, which signals a continuing shift of the Belgian case law towards greater deference to party autonomy in cross-border commercial disputes, the Antwerp Enterprise Court (the “Court”) declined jurisdiction over a franchisee’s claim for annulment of a franchise agreement on the ground that the parties had validly agreed to submit their dispute to arbitration in India under the Indian Arbitration and Conciliation Act 1996.
The franchisee had argued that Article X.33 of the Belgian Code of Economic Law (“CEL”) — which provides that the pre-contractual phase of a commercial cooperation agreement is governed by Belgian law and falls within the jurisdiction of the Belgian courts where the recipient of the right conducts its activity mainly in Belgium — should prevail over the arbitration clause.
The Court rejected this argument, relying on the Belgian Supreme Court’s judgment of 7 April 2023 concerning a comparable mandatory protective regime applicable to exclusive distribution agreements. On this basis, the Antwerp Enterprise Court held that Article X.33 CEL, applicable to franchise agreements, does not invalidate the arbitration clause, even though the arbitrator would apply Indian law rather than Belgian law.
Extending the Supreme Court’s reasoning of 7 April 2023 to other commercial contracts—including franchise and commercial agency agreements—appears logical and is supported by a substantial body of legal scholarship. However, the Supreme Court has not yet confirmed this extension.
Background
The Belgian-incorporated claimant entered into a franchise agreement dated 1 April 2022 with the defendant, incorporated in India, for the operation of a vegetarian restaurant.
The claimant contended that, during the pre-contractual phase, the defendant had allegedly failed to provide certain information required under Belgian law and consequently sought annulment of the franchise agreement before the Antwerp Enterprise Court.
The defendant, for its part, submitted that the Antwerp Enterprise Court could not validly be seised of the matter, on the ground that the franchise agreement contained an arbitration clause providing for arbitration in accordance with the Indian Arbitration and Conciliation Act 1996.
Decision
In assessing the validity of the arbitration clause for the purposes of accordance with the 1958 New York Convention, the Antwerp Enterprise Court chose to proceed by reference to Belgian law as the lex fori.
Under Article X.33 CEL, the franchisee is granted a specific protection pursuant to which the pre-contractual phase of the commercial relationship is governed by Belgian law and falls within the jurisdiction of the Belgian domestic courts where the franchisee conducts its business predominantly on Belgian territory.
The Court confirmed that the arbitration clause, which referred “any dispute or disagreement” between the parties to arbitration, was worded broadly enough to also cover the pre-contractual dispute raised by the claimant, and was not limited to disputes arising directly under the agreement itself.
As indicated, it has long been debated whether, under Belgian law, a court – faced with similar protective mechanisms under the regimes applicable to various commercial agreements (such as commercial agency and exclusive distributorship) – may decline jurisdiction and refer the dispute to arbitration, or whether it should retain jurisdiction subject to certain safeguards and instructions provided to the arbitrators. With respect to exclusive distribution agreements, the Belgian Supreme Court initially required the arbitrators to apply Belgian law or an equivalent protective regime. However, in its landmark case of 7 April 2023, the Belgian Supreme Court held that the protective regime applicable to exclusive distribution agreements protects private interests only and does not qualify as an overriding mandatory provision of Belgian law, meaning that a Belgian court cannot make the arbitrability of a dispute conditional on the arbitrator applying the relevant mandatory Belgian provisions or an equivalent foreign protection.
The present judgment of the Antwerp Enterprise Court extends this line of reasoning to franchise agreements, holding that Article X.33 CEL does not set aside a valid arbitration clause, even where the arbitrator will assess the dispute under a regime that does not offer the same protections to the franchisee (in the case at hand, Indian law).
Looking Ahead
Belgian case law is increasingly moving towards a position that favours party autonomy over the safeguards afforded by the lex fori. The parties to commercial contracts benefitting from special protections under Belgian law (including, amongst others, franchisee, exclusive distributor, commercial agent) should therefore be aware that mandatory Belgian safeguards will not invariably be applied where a matter is referred to an arbitral tribunal (or a foreign court).
It remains to be seen whether this new step towards greater party autonomy constitutes a mere flash in the pan or whether the Belgian Supreme Court will confirm the extension of the principles applicable to exclusive distributorship agreements to other commercial agreements, such as franchise agreements (as held by the Antwerp Enterprise Court) or agency agreements.
Such an extension would not mean that commercial parties whose consent to the arbitration clause would have been forced would be without legal remedy under Belgian law. In addition to the ordinary remedies afforded to a party whose consent is vitiated, those parties may rely on the Belgian B2B regime on unfair commercial clauses which prohibits, among others, clauses that lead a party to waive all legal remedies and clauses entailing a manifest unbalance between the rights of the parties.
ABOUT THE AUTHORS
Guillaume Croisant is a counsel in the international arbitration practice of Linklaters (Brussels office). He has more than a decade of experience representing clients in commercial and investment arbitration, as well as related state-court proceedings. He also regularly sits as an arbitrator. He is the co-chair of the Belgian organisation of arbitration practitioners under 40 (CEPANI40) and a member of the ICC Commission on Arbitration and ADR. Guillaume also devotes a substantial part of his practice to corporate sustainability and ESG matters, a field of law that he teaches at the Université libre de Bruxelles (ULB).
Simon Taeleman is a junior associate in the Litigation, Arbitration & Investigations (LAI) practice of Linklaters (Brussels office). He advises and represents clients in a broad range of arbitration proceedings, commercial disputes, and investigations. He is a member of the Belgian organisation of arbitration practitioners under 40 (CEPANI40), and has a particular interest in domestic and international arbitration matters.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect. This article is intended merely to highlight issues and not to be comprehensive, nor to provide legal advice. Readers should conduct independent research and analysis before acting and consult, as needed, qualified legal counsel.
