Soc. Audi-NSU Auto Union, A.G. v. S. A. Adelin Petit

In 1950, S. A. Adelin Petit (Petit) (defendant) began an exclusive distributorship in Belgium and Luxembourg for Soc. Audi-NSU Auto Union, A.G. (Audi) (plaintiff), a German company. The most current distributorship contract, set to expire on December 31, 1973, contained an arbitration clause setting venue in Zurich, Switzerland, and requiring the arbitrators to apply German law. The contract further provided that the place of performance of the contract was Germany. On December 9, 1972, Audi notified Petit of its intent to terminate the contract effective December 31, 1973. When Petit protested, Audi initiated arbitration proceedings in Zurich. Petite challenged the arbitration panel’s jurisdiction, which the arbitration panel rejected. A Swiss court confirmed the arbitration panel’s decision. On December 6, 1975, the arbitration panel determined that Audi had properly terminated Petit’s distributorship. In the interim, Petit filed a separate action in Belgium seeking damages against Audi for terminating the contract. Audi asked the Belgian court to recognize and enforce the arbitration award. The Belgian court held that it had jurisdiction to hear the matter and that under Belgian law, the arbitration clause in the contract was unenforceable. Audi appealed. The Belgian appellate court affirmed the Belgian trial court’s decision. Audi appealed to the Belgium Supreme Court.