Can a Belgian franchisee turn to the Belgian courts when it believes that it was insufficiently informed before signing the franchise agreement? Or can a foreign franchisor nevertheless rely on an arbitration clause, even where the cooperation is carried out predominantly in Belgium?
The Belgian Pre-Contractual Information Act requires franchisors and other providers of commercial cooperation arrangements to provide prospective contracting parties with extensive information in advance. Failure to comply can have serious consequences, including the nullity of the agreement.
At the same time, international franchisors often provide in their agreements for the application of foreign law, the jurisdiction of foreign courts or arbitration. This creates a tension between the protection afforded to franchisees under Belgian law and the parties’ contractual choice to have disputes resolved elsewhere or by alternative means.
In a judgment of 26 June 2026, the Antwerp Enterprise Court confirmed that a valid arbitration clause may also cover disputes concerning the Belgian Pre-Contractual Information Act. In doing so, the court extended the approach previously adopted by the Belgian Supreme Court in its judgment of 7 April 2023 concerning the Belgian Exclusive Act. You can read the judgment of the Antwerp Enterprise Court here.
The scope of Article X.33 of the Belgian Code of Economic Law
Article X.33 of the Belgian Code of Economic Law provides that, where a franchise agreement is performed predominantly in Belgium, the franchisee cannot lose the protection afforded by the Belgian pre-contractual information requirements as a result of a contractual choice of foreign law. The provision also provides that the Belgian courts may hear such disputes.
Earlier case law inferred from this that the Belgian legislator sought not only to safeguard the substantive protection afforded to prospective franchisees, but also to prevent that protection from being undermined by a foreign choice of law or choice-of-forum clause.
In international franchise disputes, Article X.33 of the Belgian Code of Economic Law was therefore regularly relied upon to establish the jurisdiction of the Belgian courts, notwithstanding the existence of arbitration or jurisdiction clauses.
The question, however, was whether this traditional interpretation remained compatible with recent developments in private international law and Belgian Supreme Court case law concerning the Exclusive Distribution Act.
From the Exclusive Distribution Act to the Pre-Contractual Information Act
The importance of the Supreme Court’s judgment of 7 April 2023 can hardly be overstated. In that case, the Court had to rule on an exclusive distribution agreement governed by Austrian law and containing an arbitration clause providing for arbitration in Vienna. The Belgian distributor argued that the Belgian Exclusive Distribution Act (Articles X.35 et seq. of the Belgian Code of Economic Law) precluded arbitration.
The Supreme Court rejected that argument and reached two separate conclusions. First, it held that a dispute concerning the termination of a distribution agreement constitutes a dispute relating to pecuniary rights and is therefore, in principle, capable of being submitted to arbitration. Second, it held that Articles X.35 to X.40 of the Belgian Code of Economic Law, although containing mandatory provisions, do not constitute overriding mandatory provisions within the meaning of Article 9(1) of the Rome I Regulation. The Belgian Exclusive Distribution Act primarily protects the private interests of the distributor and is not indispensable for safeguarding fundamental public interests of the Belgian state.
It followed that the Belgian courts cannot disregard the foreign law chosen by the parties merely because the Belgian Exclusive Distribution Act affords protection to the dealer. Equally important in the context of franchise law is the fact that the Supreme Court did not make the arbitrability of the dispute conditional upon the arbitrators applying Belgian law, or equivalent protection under foreign law.
The Pre-Contractual Information Act likewise has a clear protective purpose. It requires the franchisor to provide extensive information before the agreement is signed and provides for severe sanctions in the event of non-compliance. The question, however, was whether this protective purpose automatically means that the Act must also be regarded as overriding mandatory law in an international context.
Disputes concerning the Pre-Contractual Information Act are also arbitrable
In the case giving rise to the Antwerp Enterprise Court’s judgment, the Belgian franchisee relied, among other things, on an alleged breach of the Belgian pre-contractual information requirements. The franchise agreement nevertheless contained a broadly worded arbitration clause and provided for the application of Indian law.
The franchisee argued that the protection afforded by the Pre-Contractual Information Act and Article X.33 of the Belgian Code of Economic Law meant that the Belgian courts should retain jurisdiction to hear the dispute.
The court rejected that argument.
First, the court found that the arbitration clause was sufficiently broad to encompass disputes relating to the pre-contractual phase of the cooperation. It then followed the principles developed by the Supreme Court in its judgment of 7 April 2023. The court concluded that the dispute could be submitted to arbitration and declared that it lacked jurisdiction.
Although the court did not expressly state that the Pre-Contractual Information Act does not constitute overriding mandatory law, this does appear to be the unavoidable consequence of its decision. If the Pre-Contractual Information Act were regarded as overriding mandatory law, this could, in principle, have been sufficient to preclude arbitration, and the court would have had to accept jurisdiction on the basis of Article X.33 of the Belgian Code of Economic Law.
What does this mean for international franchisors?
Together with the Supreme Court’s judgment concerning the Exclusive Distribution Act, the Antwerp Enterprise Court’s judgment confirms a broader trend in Belgian distribution law. In an international context, traditional protective legislation can no longer automatically be relied upon to render a foreign arbitration clause or choice-of-law clause ineffective.
For businesses operating internationally with distributors, franchisees or other commercial partners, this case law once again highlights the importance of carefully considering the provisions governing applicable law, jurisdiction and arbitration. Such clauses are sometimes treated as merely technical provisions during contract negotiations. In a dispute, however, they can prove decisive for the parties’ subsequent strategy.
Authors:
- Willem De Vos, Monard Law
- Daan De Jaeger, Monard Law
