Benteler v. State of Belgium

Ad Hoc Award of 18 November 1983, 1989 Rev. arb. 339 (1983)

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Benteler v. State of Belgium

Panel of Arbitration
Ad Hoc Award of 18 November 1983, 1989 Rev. arb. 339 (1983)

Facts

Benteler (plaintiff) and the State of Belgium (the State) (defendant) entered a Protocol of Agreement in February 1980 regarding the industrial and financial restructuring of company. The Protocol contained Article 14, which provided that an arbitral tribunal would decide all disputes arising out of the Protocol of Agreement. After a major dispute arose between the parties, Benteler initiated arbitration proceedings. The State disputed the validity of the arbitration clause from the outset of proceedings. The State argued Article 1676(2) of the Belgian Judicial Code prevented the State from submitting to arbitration. Benteler countered that Article 1676 did not apply to the international arbitration, especially when said arbitration did not take place in Belgium. Benteler instead argued that, under Article II(1) of the European Convention, public law entities retain the right to enter into arbitration agreement. Benteler argued the European Convention applied to the arbitration clause contained in the Protocol of Agreement. The State responded in an answering brief that the European Convention only applied to international commercial operations and that the Protocol of Agreement did not relate to a commercial operation under Belgian law. Benteler countered that the term “international commercial operations” required the broader definition offered by the European Convention rather than the definition distinctive to domestic Belgian law. The panel of three arbitrators rendered a preliminary decision and award.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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