The Chamber of Representatives recently enacted the new Maritime Code. Whereas the substantive rules on the arrest on sea-going ships will be directly governed by the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships 1952, the procedures governing how to obtain an arrest authorisation will not fundamentally change. Belgium will remain a favourable place to arrest sea-going ships in order to obtain security for unpaid maritime claims.
The European Court of Justice recently confirmed that the Belgian reorganisation framework infringes the EU Transfer of Undertakings Directive with regard to the transfer of personnel. This judgment looks set to have a significant impact on reorganisation proceedings, with parties more likely to be reluctant to organise a transfer of assets leading to bankruptcies and redundancies.
The Chamber of Representatives recently enacted the new Maritime Code, which will replace – to a large extent, but not completely – numerous provisions in several existing codes. The new code is over 470 pages long and consequently cannot be explained in a few lines; however, this article highlights some of the major changes that will be introduced in relation to existing legislation.
In an insolvency situation, the fate of ongoing contracts is something to be discussed. Such contracts are often closely linked to the essence of a company's business. For example, for (commercial) leases, a lessor's bankruptcy or a tenant's judicial reorganisation will probably result in discussions about the agreement, its (forced) execution and rental payments. If a company's activities are based on patent or software licences, the effect on these agreements will also be of crucial importance.
Preliminary injunctions are rarely granted on an ex parte basis in Belgium and adversarial debates are considered a cornerstone of legal proceedings which can be deviated from only in cases of absolute necessity. However, ex parte interim measures have been granted in at least four patent disputes in Belgium in recent years, which helps to shed light on the circumstances under which patentees can consider them to be a measure of last resort to stop a threat of infringement.
On 30 July 2018 the Belgian legislature transposed the EU Trade Secrets Directive into domestic law via the Trade Secret Law. The Trade Secret Law is welcomed, as no general regulatory framework regarding trade secrets previously existed in Belgium. It remains to be seen how the law will be used and applied in practice, but it is an essential means in effectively appropriating, protecting and exploiting innovation by providing trade secret holders with the tools to protect valid trade secrets.
The European Court of Justice appears likely to rule that the Belgian reorganisation framework infringes the EU Transfer of Undertakings Directive with regard to the transfer of personnel. If the option to transfer only a portion of staff is no longer available in Belgian reorganisation proceedings, companies will have no choice but to formally file for bankruptcy, which is exactly the issue that the legislature and the labour unions had hoped to avoid when introducing this mechanism into Belgian law.
A legislative package aimed at fighting falsified medicines will enter into force in the European Union in early 2019. This EU legal framework was transposed into Belgian law through the Medicines Act and the Royal Decree concerning Medicines for Human and Veterinary Use. As a result, pharmaceutical companies will be required to affix a so-called 'anti-tampering device' on all prescription medicinal products to allow verification of whether the packaging has been tampered with.
The Council of Ministers recently approved preliminary draft legislation amending the Passenger Data Processing Act. Among other things, the proposed changes concern the protection of individuals with regard to the processing of personal data, data exchanges and the cross-checking of passenger data following the identification of suspicious passengers. The changes aim to bring the act into line with the EU General Data Protection Regulation.
The former Bankruptcy Statute of 1997 included a principle that a natural person could be discharged of their remaining and outstanding debts – a so-called 'waiver' – at the moment of a bankruptcy's closure. The discharge's beneficial effects were extended to the bankrupt person's spouse. However, for bankruptcies that have happened since 1 May 2018, and so fall under the new legal framework, this situation has changed.
The legislature recently took steps to improve the follow-up monitoring of companies in financial difficulty and strengthen the fight against inactive companies. To determine whether companies are in financial difficulty, the courts gather information from various (digital) sources. However, the focus remains on preventive mechanisms – namely, identifying companies in financial difficulty and following up with court action.
It is often difficult to clearly demonstrate an abuse of a dominant position by way of excessive pricing. Nevertheless, the Brussels Commercial Court recently seemed to have little doubt that the Belgian Society of Authors, Composers and Publishers' (SABAM's) increased tariffs for concerts and music festivals constituted an abuse of its dominant position. However, what is more interesting is that the court also considered SABAM's existing practice to constitute an abuse of its dominant position.
The Belgian insolvency law's scope was recently broadened. As of 1 May 2018, all entities that are involved in commercial or entrepreneurial activities can be declared bankrupt (or enter into court-supervised reorganisation proceedings). Discussion has started about whether company administrators can also be seen as being 'involved in an entrepreneurial activity' and thus declared bankrupt.
In a high-profile trademark infringement case involving Moët Hennessey Champagne Services and a Belgian painter, the courts were asked to strike a balance between the right to property, including intellectual property, and artistic freedom of expression. The decision is expected to set an important precedent on how to strike a fair balance between freedom of speech and the protection of trademarks when these two concepts conflict.
The digitisation of different insolvency proceedings (ie, bankruptcies, judicial reorganisations and company voluntary agreements) recently reached a new milestone. All new insolvency files must now be commenced through the Central Solvency Register (Regsol) and followed up on the same system. Regsol offers a number of new features, including the electronic storage of insolvency files and a new declaration of debt form.
If reorganisation proceedings are unsuccessful and lead to bankruptcy proceedings, creditors with new claims resulting from services performed during the reorganisation proceedings often find it difficult to receive payment of their privileged claims when they are in competition with a general pledge on the debtor's estate that is held by a bank. The Supreme Court's recent judgment in this regard will help such privileged creditors to receive payment from the bankrupt estate.
The Competition College recently refused to initiate a Phase II investigation and approved Volvo Group Belgium's acquisition of various companies belonging to the Kant group, despite concerns that the transaction was likely to result in competition issues. This case demonstrates that a hearing before the Competition College is not just a formality and that parties can successfully contest a prosecutor's findings.
The legislature recently took steps to improve the follow-up monitoring of companies in financial difficulty and strengthen the fight against inactive companies. Companies that fail to pay their social security or value added tax debts, file their annual accounts or fulfil other administrative obligations on time will now appear on the radar of the Commercial Court's Investigative Services much earlier. The services' recently extended powers of action could lead to unfortunate surprises for some companies.
Merck Sharp & Dohme (MSD) recently sued PI Pharma before the Brussels Commercial Court for the parallel import and repackaging of one of MSD's medicinal products. MSD based its claim on the alleged violation of the first, third and fourth Bristol-Myers Squibb conditions. Although this is not the first time that the Brussels Commercial Court has been involved in a dispute over the parallel importation of medicinal products, the judgment further refines the scope of certain Bristol-Myers Squibb conditions.
Parliament recently voted into law the federal government's proposal to introduce a new chapter on insolvency into the Code of Economic Law. Among other things, the new chapter concerns the potential liability of former directors of a bankrupt company. Some of the new principles already partially existed in Belgian law, but have been amended by the new chapter, which also broadens certain concepts which will thus apply to a wider range of entities.