## Facts

- A German automobile manufacturer appointed a Belgian corporation as its exclusive distributor for Belgium and Luxembourg beginning in 1950.
- The parties’ then-current distributorship contract was set to expire on December 31, 1973.
- The contract included a broad arbitration clause designating Zurich as the seat, German law as governing, and Germany as the place of performance.
- In December 1972, the manufacturer gave notice that it would end the relationship effective December 31, 1973.
- The distributor objected; the manufacturer commenced arbitration in Zurich under the contract.
- The distributor challenged the tribunal’s jurisdiction; the tribunal rejected the challenge, and a Swiss court confirmed the jurisdiction ruling.
- In December 1975, the arbitral tribunal issued an award concluding the termination was proper.
- While arbitration was pending, the distributor sued in Belgium seeking damages for wrongful termination.
- The manufacturer asked Belgian courts to give effect to the arbitration clause and to recognize/enforce the Swiss-seated award to bar the Belgian damages action.
- Belgian trial and appellate courts held they had jurisdiction and treated the arbitration clause as unenforceable under Belgian law; the manufacturer sought review in the Belgian Court of Cassation.

## Issues

1. Whether Belgian courts had to enforce the contract’s Zurich arbitration clause (and related governing-law/place-of-performance designations) to decline jurisdiction over the distributor’s damages claim.
2. Whether Belgian courts had to recognize and enforce the Swiss-seated arbitral award such that it would preclude or defeat the distributor’s Belgian litigation.
3. Whether Belgian domestic rules (including mandatory/protective rules) could override the parties’ contractual choices of forum and law in an exclusive distributorship dispute centered in Belgium.

## Decision

- The Belgian Court of Cassation upheld the lower courts’ exercise of jurisdiction over the distributor’s Belgian damages action.
- The court did not treat the Zurich arbitration clause as enforceable to exclude Belgian judicial jurisdiction in these circumstances.
- The court did not give the Swiss-seated award preclusive effect sufficient to bar the distributor’s Belgian claim.

## Legal Principles

- A forum court may apply its domestic rules on the validity/effect of arbitration clauses to determine whether an arbitration agreement can exclude its jurisdiction.
- Contractual choices of arbitral seat, governing law, and place of performance do not necessarily prevent application of mandatory forum rules in disputes with strong local connections.
- Recognition/enforcement of a foreign arbitral award may be refused or limited where the forum treats the underlying arbitration agreement as invalid or inoperative under forum law, particularly when the dispute implicates locally protected commercial relationships.

## Conclusion

The Belgian Court of Cassation permitted Belgian courts to adjudicate a local distributor’s termination-damages claim notwithstanding a Zurich arbitration clause and a prior Swiss-seated award, reflecting the capacity of Belgian mandatory rules to limit party autonomy in forum and law selection for distributor relationships centered in Belgium.


Soc. Audi-NSU Auto Union, A.G. v. S.A. Adelin Petit, 1 Pas. 1260 (Belg. 1979)