## Facts

- An Italian manufacturer (respondent) and a Belgian distributor (claimant) entered into a distribution agreement.
- The agreement contained an arbitration clause referring disputes to arbitration under the ICC Rules.
- The agreement selected Italian law as the governing law of the contract.
- The parties designated Köln (Cologne), Germany as the seat of arbitration.
- A dispute arose after the manufacturer allegedly terminated the distributor.
- The distributor initiated ICC arbitration and argued that Belgian statutory protections for distributors were mandatory and should govern termination-related rights (including notice and compensation).
- The distributor relied on the Belgian Law of 27 July 1961 on exclusive distributorships, including:
  - Article 4, which provides a remedial framework for a distributor harmed by termination of a distribution contract, and
  - Article 6, which states that Article 4 applies even if the parties contract otherwise.
- The manufacturer argued that the contractual choice of Italian law governed termination and any notice period, and that Belgian statutory provisions invoked by the distributor did not control the dispute.
- The distributor contended that the manufacturer had superior bargaining power and effectively imposed the Italian-law clause.
- The arbitral tribunal addressed the law applicable to the arbitration agreement and the merits, and considered the relevance of international instruments (including the New York Convention and the 1961 European Convention) as well as conflict-of-laws materials referenced in the award extract (including the Rome Convention discussion noted in summaries).

## Issues

1. Whether the tribunal should give effect to the parties’ contractual choice of Italian law to govern the merits of the distributorship dispute.
2. Whether Belgian statutory provisions on exclusive distributorships (Belgian Law of 27 July 1961, Articles 4 and 6), described by the distributor as mandatory, must be applied despite the Italian choice-of-law clause and a German seat.
3. What law governs the validity and effect of the arbitration agreement in an ICC arbitration seated in Cologne where the contract selects Italian law.

## Decision

- The tribunal treated the parties’ autonomy to select the applicable law as controlling and applied Italian law as the law governing the merits of the dispute, consistent with the contract’s choice-of-law clause.
- The tribunal considered the arbitration agreement valid under Italian law, as the law chosen for the parties’ relationship and as a system incorporating relevant treaty obligations governing arbitration agreements.
- The tribunal declined to apply the Belgian Law of 27 July 1961 (including Articles 4 and 6) as binding mandatory rules that would override the parties’ choice of Italian law in this arbitration.
- As a result, the distributor’s attempt to base termination protections on the Belgian statute was rejected in this arbitration, and the parties’ termination-related rights were assessed under Italian law rather than the invoked Belgian provisions.
- The published excerpt does not provide a complete account of any monetary calculations or the full dispositive relief beyond the determination of applicable law and the non-application of the Belgian mandatory regime in the manner argued by the distributor.

## Legal Principles

- In international commercial arbitration, an express contractual choice of law is generally effective and will be applied to the merits absent a valid basis to displace it.
- The law governing the arbitration agreement may be aligned with the law chosen for the contract where the parties’ agreement indicates that intent, and where doing so is consistent with applicable treaty standards on arbitration agreements (including the New York Convention framework referenced in summaries of the award).
- A tribunal is not required, merely because one party invokes them, to treat foreign mandatory statutes as automatically overriding the parties’ chosen substantive law; whether such rules apply depends on the tribunal’s conflicts analysis and the legal constraints connected to the arbitration (including the seat and recognized international arbitration rules).
- Statutory “non-derogation” provisions aimed at preserving access to certain national courts (such as the Belgian provisions invoked) do not necessarily prevent arbitration from proceeding under an agreed arbitration clause seated outside that state, nor do they necessarily dictate the substantive law applied by the tribunal.
- Conflict-of-laws materials discussed in summaries of the award (including references to the Rome Convention and its treatment of arbitration agreements and mandatory rules) were addressed as part of the tribunal’s analysis, but did not lead the tribunal to displace the parties’ Italian-law choice in favor of Belgian distributorship protections.

## Conclusion

In ICC Case No. 6379, an ICC tribunal seated in Cologne resolved a distributorship termination dispute by giving effect to the contract’s Italian choice-of-law clause, treating the arbitration agreement as valid under Italian law, and refusing to apply Belgian statutory distributorship protections (Belgian Law of 27 July 1961, Articles 4 and 6) as overriding mandatory rules in the arbitration.


Final Award in ICC Case No. 6379, XVII Y.B. Comm. Arb. 212 (1992)