On 27 September 2018, the Supreme Court (Hof van Cassatie/Cour de Cassation) handed down a judgment regarding the validity of an arbitration clause contained in a service agreement concluded between the North-Atlantic Treaty Organisation ("NATO") and one of its gardeners ("Mr. P") in 2007.

The arbitration clause at issue provided that any arbitrator appointed to hear a dispute between NATO and Mr. P had to be a national of one of NATO's Member States.

In 2010, NATO terminated the service agreement and Mr. P then brought an action for damages before the Belgian courts.

NATO challenged the jurisdiction of the Belgian court on the basis of (i) the arbitration clause contained in the gardening agreement; and (ii) Article V of the Agreement of 20 September 1951 on the status of the North Atlantic Treaty Organisation, National Representatives and International Staff, which provides that NATO enjoys immunity from legal proceedings.

Mr. P disputed NATO's jurisdictional challenge and argued that NATO could only invoke its jurisdictional immunity if it offered a suitable alternative forum to hear the dispute. However, in the case at hand, Mr. P argued that arbitration was not a suitable alternative forum since the arbitration clause violated Article 6 European Convention on Human Rights (the "ECHR") (read in combination with Article 1685, paragraph 1 of the Belgian Civil Procedure Code which provides that, "unless otherwise agreed by the parties, no one can be precluded from being appointed as an arbitrator by reason of its nationality").

Mr. P argued that by preventing nationals from non-NATO countries from being appointed arbitrators, the arbitration clause at issue favored NATO and was therefore in breach of the fundamental principle according to which parties to arbitration proceedings had to be placed on an equal footing when it comes to the constitution of the arbitral tribunal.

Although the first instance court followed Mr. P's reasoning and ordered NATO to pay Mr. P EUR 14,751 in damages, that judgment was overturned on appeal.

Mr. P then appealed to the Supreme Court, but that appeal was dismissed on the following grounds:

  • Article 1685 of the Code of Civil Procedure did not apply to the case at hand since that provision was only inserted in the Code of Civil Procedure in 2013 (i.e., after the initiation of the dispute at hand).
  • The right to a fair trial enshrined in Article 6 ECHR is not absolute and is subject to limitations insofar as these limitations do not affect the very substance of the right to a fair trial. In the case at hand, the Supreme Court found that the arbitration clause offered a suitable alternative forum to hear the dispute between NATO and Mr. P and that it did not affect the arbitrators' neutrality and independence.

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