BELGIUM Law and Practice Contributed by: Wim Aerts, Dorothée Vermeiren and Stijn Van Walleghem, Clifford Chance
The security most commonly enforced in Belgian enforcement proceedings is the share pledge, that can be enforced either through a sale to a third party or through appropriation by the pledg - ee. Appropriation is only possible if contractually provided for and is against a value determined in accordance with the pledge agreement. Typi - cally, there is no ex-ante court involvement in such proceedings. Credit bids are not possible in Belgium. Other types of security are enforced through direct collection by the creditors (such as receivables or accounts), or through sale of the relevant assets. These other security inter - ests have more impact on the going concern of the business and, absent bankruptcy or in the context of certain restructuring proceedings, are less commonly enforced. Enforcement of secu - rity over real estate requires a lengthy and court- involved process. Security in Belgium is most often held by a Security Agent on behalf of the lenders. From an enforcement perspective it does not matter whether the lenders are banks or non-bank pri - vate credit providers. 6.2 Foreign Law and Jurisdiction A choice of a foreign law may be upheld in Bel - gium on the basis Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the Law Applicable to Contrac - tual Obligations (“Rome I”). The submission to the jurisdiction of foreign courts may be upheld in Belgium. A waiver of immunity of jurisdiction may be upheld in Belgium. 6.3 Foreign Court Judgments If a treaty or EU regulation is in place (eg, Brus - sels I or Hague Choice of Court Convention) a final judgment obtained in a foreign court against the Belgian company will be recognised and enforced by the Belgian courts. However, if no
treaty or EU regulation is in place, a judgment of a foreign court will not be automatically enforce - able in Belgium but will only be enforced without review of the case on the merits if certain condi - tions, primarily linked to procedural safeguards in the jurisdiction of origin of the judgment, have been met. An arbitral award rendered pursuant to an agreed arbitration clause shall be enforceable against a Belgian company in Belgium subject to the provisions of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958 (as may be amended). 6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights A challenge to enforcement can be done in mul - tiple ways, among which are the following: • the debtor, sponsor or other stakeholder can approach the courts to demand payment terms and therefore suspend the enforcement proceedings; • the debtor can file for insolvency including a moratorium; and • the debtor can start judicial reorganisation proceedings including a moratorium. 6.5 Timing and Cost of Enforcement Enforcement of a share pledge in Belgium can, due to the absence of the need of ex-ante court approval, theoretically take place within a very short timeframe. In practice, however, significant preparation will be required and timing will be determined by such preparation, and may be impacted by intervening judicial reorganisation or insolvency proceedings started by the borrower or the sponsors. The costs of the enforcement are adviser and valuation costs and depend on the circumstances and complexity of the matter.
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