The time limitation provided by the Belgian Judicial Code to challenge an arbitral award obtained by fraud is unconstitutional
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On 28 January 2021, the Belgian Constitutional Court handed down its decision on the question raised by the Brussels Court of First Instance: "Is Article 1717 § 4 in breach of Articles 10 and 11 of the Constitution, as read in combination with Article 6 of the European Convention on Human Rights, in that it provides a time bar which no longer allows a party to an arbitration to challenge an award when it discovers more than three months after the communication of the award that it was obtained by fraud, whereas under Articles 1132 et seq. of the Judicial Code, a party to legal proceedings has a period of six months from the date of discovery of the fraud to bring a civil request?" [Decision n° 14/2021].
The Belgian Constitutional Court decided that the difference in treatment between a party to judicial proceedings that can challenge a court decision if it finds out that the judge’s decision is tainted with circumstances such as fraud, and a party to an arbitration that discovers that the award was obtained fraudulently is disproportionate.
Indeed, under Article 1136 of the Judicial Code, the former may request for the judge’s decision to be revoked within six months of the discovery of the new circumstance, while the latter may only apply to set aside a Belgian arbitral award before the Belgian Courts within three months of receiving the award, in accordance with Article 1717 § 4 of the Judicial Code.
According to the Constitutional Court, having a time bar of three months, compared to the six months afforded to a party seeking revocation before the State courts, is a proportionate difference in treatment given the objectives of swift and effective dispute solving reflected in the Belgian law of arbitration - which itself relies heavily on the UNCITRAL Model Law. On the other hand, systematically limiting a party’s possibility of setting aside the award to three months from the point of the communication of the award, even when the fraud basing the challenge is discovered later is disproportionate and, consequently, unconstitutional.
The lawmaker will be required to amend this unconstitutional provision. Until that is done, a challenge to an award on the basis of fraud will have to be introduced within a "reasonable timeframe given the circumstances, from the point of the discovery of the fraud".
The Belgian Constitutional Court decided that the difference in treatment between a party to judicial proceedings that can challenge a court decision if it finds out that the judge’s decision is tainted with circumstances such as fraud, and a party to an arbitration that discovers that the award was obtained fraudulently is disproportionate.
Indeed, under Article 1136 of the Judicial Code, the former may request for the judge’s decision to be revoked within six months of the discovery of the new circumstance, while the latter may only apply to set aside a Belgian arbitral award before the Belgian Courts within three months of receiving the award, in accordance with Article 1717 § 4 of the Judicial Code.
According to the Constitutional Court, having a time bar of three months, compared to the six months afforded to a party seeking revocation before the State courts, is a proportionate difference in treatment given the objectives of swift and effective dispute solving reflected in the Belgian law of arbitration - which itself relies heavily on the UNCITRAL Model Law. On the other hand, systematically limiting a party’s possibility of setting aside the award to three months from the point of the communication of the award, even when the fraud basing the challenge is discovered later is disproportionate and, consequently, unconstitutional.
The lawmaker will be required to amend this unconstitutional provision. Until that is done, a challenge to an award on the basis of fraud will have to be introduced within a "reasonable timeframe given the circumstances, from the point of the discovery of the fraud".