Brexit deal & data transfers: a temporary relief

Amongst the (many) uncertainties linked to Brexit, its potential restrictive impact on data transfers between the European Economic Area (EEA) and the UK was an important one for all businesses with cross-border activities.

The EU-UK Trade and Cooperation Agreement (the Brexit deal) adopted last December has brought a temporary answer to it. It allows EEA firms to continue transferring personal data to the UK under the same rules as before Brexit, and this, for a period of four months (extendable to six months) known as the “Bridge”.

Brexit deal - data transfer from the EU to the UK

The context

As a result of Brexit, UK has officially left the European Union since 1 January 2021.

Under the General Data Protection Regulation (GDPR), data transfers outside the EEA are only allowed if:

  • the third country concerned has been the subject of an adequacy decision, i.e. the European Commission’s decision that the third country concerned ensures an adequate level of protection, or
  • in the absence thereof, if the transfer is accompanied with safeguards guaranteeing adequate protection of the personal data transferred. These transfer mechanisms may take different forms, but they all require additional measures compared to transfers within the EEA – which all EEA firms have not yet implemented. Besides, since the CJEU’s decision of last summer in the Schrems II case, the conditions to implement the most commonly used of those measures, the standard contractual clauses, have been questioned, increasing the complexity and the level of uncertainty regarding non-EEA transfers.

Before the Brexit deal, since no adequacy decision on the UK had been adopted, transfers of personal data from the EEA to the UK after 31 December 2020 should have carried out an additional transfer mechanism that international businesses should potentially have had to implement on short notice.

Thanks to the Brexit deal, this issue has been temporarily resolved by creating the Bridge.

The Bridge

Under the Bridge, for a limited time, personal data transfers from the EEA to the UK will not be considered as transfers outside the EEA. In practice, during this period, businesses can keep transferring personal data from the EU to the UK under the same rules as before Brexit.

That temporary regime will normally apply for a period of four months, automatically extended to six months unless the EU or the UK objects. This regime may end earlier if the European Commission adopts an adequacy decision for the UK in the meantime – in which case the temporary regime will no longer be needed.

This regime is subject to strict conditions, for example, the continued application of the UK data protection law as at 31 December 2020. If these conditions are not met, the Bridge could end prematurely.

What’s next?

All eyes are now turned to the European Commission and a possible adequacy decision regarding the UK. It seems to be the next logical step but is in no way guaranteed.

Should the European Commission take such a decision, entities with cross-border activities will be able to continue transferring personal data from the EEA to the UK without having to implement the additional transfer mechanisms.

If no adequacy decision is adopted by the end of the Bridge period, all personal data transfers from the EEA to the UK will become transfers to a third country, triggering the obligation to implement the appropriate safeguards for data transfers to third countries as required by the GDPR.

We will keep you posted, stay tuned!

***

For any question, please contact Simont Braun’s Digital Finance Team: digitalfinance@simontbraun.eu – +32 (0)2 543 70 80

Simont Braun authors ICLG Belgian Chapter on Designs

What are the key principles of Benelux Design law?

Fernand de Visscher and Julie Kever authored the Belgian chapter on Designs in the International Comparative Legal Guide 2021 (ICLG): a pragmatic and comprehensive overview for all IP practitioners.

The guide is available here.

Should you have any question, please contact the authors:
fernand.devisscher@simontbraun.eu
julie.kever@simontbraun.eu
+32 (0)2 543 70 80

Amendments to Belgian corporate law to facilitate remote shareholders’ meetings

Since the outbreak of the COVID-19 pandemic, the provisions of the Companies and Associations Code (the “CAC”) on the functioning of corporate bodies have proved to be too restrictive, particularly with regard to the remote organisation of shareholders’ meetings for listed companies or companies having many shareholders.

remote shareholders meetings - loi 20 décembre 2020 - belgium

Facilitating remote shareholders’ meetings

Following the Royal Decree No. 4 of 9 April 2020 (as extended by the Royal Decree of 28 April 2020) which has expired, the Law of 20 December 2020 has been adopted notably to facilitate the remote shareholders’ meetings of companies and (international) non-profit associations (A(I)SBL/(I)VZW) on a long-term basis.

In its current version, the CAC required a specific authorisation in the articles of association to organise a shareholders’ meeting using electronic means of communication. This requirement disappears with the newly adopted measures (for the SA/NV, see the new text of article 7:137 of the CAC).

For all companies (listed or not) and associations (“ASBL”/”VZW”), the option to hold a remote shareholders’ meeting is now at the discretion of the management body. However, the meeting will always need to be held at the same time in a “presential” form. Consequently, unlike what was provided for in the Royal Decree no. 4, directors may not refuse the physical presence of shareholders at the meeting.

Members of the bureau are required to participate in person. The directors and, where applicable, the statutory auditor can attend remotely provided they are able to answer the shareholders’ questions with the used communication means.

Conditions to organise remote shareholders’ meetings

Several conditions have to be met by companies and associations wishing to organise a remote shareholders’ meeting:

  • The entity must be able to verify the capacity and identity of its shareholders/members. The means used should be adapted to the shareholding/membership structure. The Parliamentary works list as examples: Teams, Zoom, Skype or a similar system.
  • The convening notice to the shareholders’ meeting must contain a clear and precise description of the procedure to participate remotely. If the company or the ASBL/VZW has a website, the procedure must be made accessible on it.
  • A “two-direction” communication is mandatory. Accordingly, shareholders or members must be able to directly, simultaneously and continuously follow discussions, exercise their voting rights, actively participate in the debates and ask questions. However, the new regulation allows for a one-way communication – not allowing shareholders or members to actively participate in the discussions – until 30 June 2021 provided it has valid reasons to do so which are justified in the convening notices. Shareholders or members who wish to actively participate in the discussions will then have to attend the meeting in person.

Our analysis

The Covid-19 outbreak has proved the importance to dispose of legal and technical resources to organise remote participation and voting to shareholders’ meetings. In addition, remote participation may encourage certain shareholders to participate in shareholders’ meetings. From this perspective, the adaptations made to the CAC are welcome.

However, contrarily to the measures taken during the first lockdown, the legislator did not leave a certain margin of appreciation to allow the management body to prohibit shareholders’ physical presence. Thus, shareholders’ meetings will, at most, remain hybrid meetings. This may be problematic if the social distancing measures are extended for several months, especially as the period for organising the shareholders’ meetings, notably for listed companies, is coming. One way to limit the number of shareholders present in person may be to encourage the granting of proxies to a single person suggested in the convening notices.

In addition to the amendments concerning remote meetings, the newly adopted measures extend to the members of an ASBL/VZW the possibility to (i) take unanimously and in writing all decisions which fall within the powers of the shareholders’ meeting, except for the amendment of the articles of association and (ii) to vote at a distance before the shareholders’ meeting by way of electronic means if the articles allow it.

The amendments summarised above entered into force on 24 December 2020.

***

For additional information or guidance, please contact Sandrine Hirsch or Nikita Tissot

sandrine.hirsch@simontbraun.eu
nikita.tissot@simontbraun.eu
+32 (0)2 543 70 80

Flash News | New moratorium for enterprises in difficulty

Belgium has recently adopted extra measures to combat the negative economic impact of Covid-19.

The Law of 20 December 2020, which entered into force on 24 December 2020, provides for a second moratorium for companies in difficulty up until 31 January 2021 (included).

The scope of application of these measures is, however, more restrictive than during the first lockdown in March 2020. They only concern enterprises subject to closure pursuant to the Ministerial Orders of 28 October and 1 November 2020 (e.g. Horeca establishments, establishments in the cultural, festive, sports and events sectors, companies in the “contact business” sector, etc.).

In addition, as under the Royal Decree n°15, the concerned enterprises cannot have already been in a state of suspension of payments on 18 March 2020 to benefit from these measures.

As to the protection measures, they are identical to those created by the Royal Decree n°15. Please refer to our news of May 2020 for a description of the latter.

The Law of 20 December is available here.

***

For any question or guidance, please contact Fanny Laune

fanny.laune@simontbraun.eu
+32 2 543 70 80

Renaud van Melsen interviewed in Le Soir Immo

A good read to start the year?

We are happy to share Renaud van Melsen’s interview in Le Soir Immo.

What is our role as lawyers in real estate and public law? What are today’s major questions in town planning and environmental law?

To read the article “Les avocats ne sont pas des penseurs en vase clos”, click here.

Interview by Brigitte De Wolf Cambier

Article published in Le Soir Immo on 31 December 2020

Highlights 2020 and upcoming events in 2021

What happened in 2020, and what is to expect in 2021?

Every day in December, Simont Braun shared legal highlights of 2020 and upcoming events for 2021 in its End-of-Year Countdown.

Here is a recap of each highlight by area of practice:

1. Corporate law
2. Intellectual property
3. Digital finance & Financial services
3. Civil law and Dispute resolution
4. Real Estate & Public law.

 

Corporate law

 

Golden year of remote corporate meetings and e-signatures

Since 1 January 2020, the new Companies and Associations Code allows remote shareholders and board meetings in writing or via electronic means of communication under certain conditions. With Covid-19, the Belgian government further facilitated the process and temporarily removed the legal obligation for such remote meetings to be authorised by the articles of association.

An ambitious draft bill of 27 October 2020 now notably proposes to incorporate this measure into the Companies and Associations Code.  Let’s see how it progresses in 2021…

The growing use of electronic signature in business relations also plays a major role in organising these remote corporate meetings. For more information, see our previous news here authored by Sandrine Hirsch, Axel Maeterlinck and Maxime Born.

Simpler rules for companies’ internal regulations

Since 1 January 2020, the new Code of Companies and Associations applies to companies and associations created before 1 May 2019. The new Code modernises and simplifies Belgian corporate law.

Recently, the Constitutional Court further softened the rules regarding internal regulations (“règlement d’ordre intérieur” / “intern reglement”), stating that they may even contain provisions affecting the rights of shareholders or members, the powers of the corporate bodies and the organisation and procedures of the general meeting. In such cases, these internal regulations must be approved by a resolution meeting the attendance and majority requirements for an amendment of the articles of association.

The impact of the Shareholder Rights Directive II (SRD II) on listed companies

The SRD II has now effect in Belgium.

The law of 28 April 2020 amends the Companies and Associations Code, for example, concerning the regulation of intra-group conflicts, which is likely to apply much more frequently following the extension of its scope of application to “related parties” as defined in IAS 24.

This law also modifies the Transparency Law, allowing listed companies to request information from the relevant intermediary regarding the identity of their shareholders and their shares whatever the importance of their holdings.

The Belgian law is available here. Let’s see how it goes in practice…

UBO Register: new obligations

Since 11 October 2020, all entities reporting to the UBO Register must file any document proving that the information on their ultimate beneficial owners is “adequate, accurate and up-to-date”. These documents can be, for example, the share register, articles of association, notarial deeds, etc. Their access is restricted to the competent authorities.

We remind you that all modifications must be recorded in the UBO-register within a one-month period and that the information recorded must be confirmed annually.

For more information, see our previous news here authored by Sandrine Hirsch and Nikita Tissot.

 

Intellectual property

 

The protection of geographical indications under international trade agreements

Since 26 February 2020, the Geneva Act of the Lisbon Agreement on Appellations of Origin is binding the EU Member States.

We are eager to learn the next step: which PDO-PGI will be placed on the multilateral register and deserve protection in all countries of the Lisbon Union?

We guess all 3732 current records on the EU’s e-Ambrosia GI register will not have the privilege, but only a few reputed geographical product names. Let’s wait and see!

New regulatory framework for patent attorneys

On 1 December 2020, the first part of the reform came into force. It includes the rules governing access to the profession of patent attorney and the creation of a Belgian Institute for Patent Attorneys, which will notably represent the patent attorneys active in Belgium, enforce ethical rules and organise continuous training.

For a pragmatic overview of the new law by Emmanuel Cornu and Charlotte Behets Wydemans, click here.

Don’t forget to stay tuned for the second part of the reform coming in 2021.

Design protection under review by the EU Commission

Are you a designer or a company owning IP rights? Be aware that the EU Commission thinks about reforming national and EU design laws.

The 6 key lines of attack are:

  • raising awareness on the benefits of design protection,
  • increasing harmonisation of the protection across the EU,
  • simplifying the design registration process,
  • ensuring consistency with trademark and copyright laws,
  • taking better account of the increasing digitalisation and
  • introducing rules on spare parts, crucial in the automotive sector.

The full examination and its highlights are available here. We will keep you posted!

What does 2021 hold for the Vertical Block Exemption Regulation (VBER)?

The VBER is currently under review by the EU Commission. Will it be prolonged, revised, replaced? How will the future rules impact current and upcoming business models?

Let’s see what 2021 has in store for us!

For more information, see the European Commission’s press release here.

 

Digital finance and financial services

 

The impact of Brexit on the Belgian payments scene

The 2016 UK Brexit referendum results will finally kick in on 1 January 2021, but a lot has already happened.

Several UK e-money and payments institutions, mainly focusing on money remittance, FX and B2B services, have chosen Belgium as their post-Brexit EU hub. Around 20% of all Belgian payment institutions have now a Brexit background, adding a lot of maturity to the sector.

2021 will be a stress test and reveal how smooth the migration will be for payment service users.

A European legal framework for crypto-assets in 2021?

In September 2020, as part of its digital finance strategy, the European Commission proposed a draft regulation on markets in crypto-assets (MiCA) to regulate crypto-assets and related services not yet captured by existing EU regulations.

By bringing a legal framework for crypto-assets, MiCA intends to facilitate digital innovation while ensuring consumer protection and financial stability.

If adopted, this regulation will be a major development for FinTechs in 2021. We will keep you posted!

An EU single AML/CFT supervision body for financial institutions and an EU AML Regulation in 2021?

In November 2020, the EU finance ministers agreed to set up a single EU supervision body to prevent money laundering and terrorist financing. It would have direct supervisory competences regarding some categories of obliged entities (among which, credit institutions, payment institutions, e-money institutions and virtual asset service providers), and the power to take over supervision from national supervisors under exceptional circumstances.

They further agreed to support and invite the EU Commission to present a legislative proposal for an anti-money laundering and counter-terrorist financing regulation with a view to an even application of the provisions throughout the EU.

The Commission is expected to present legal proposals in this respect in early 2021. For more information, click here.

Outsourcing and cloud services under the financial supervisors’ radar in 2021?

On 1 January 2021, the EIOPA’s Guidelines on outsourcing to cloud service providers will come into force. Existing cloud arrangements will have to be put in line with these new requirements by 31 December 2022.

These guidelines show the supervisors’ increasing focus on (cloud) outsourcing arrangements. With the development of technology, many if not all financial actors outsource IT and other related services to external providers, thereby spreading the risk of the financial sector to non-related actors (e.g. ICT).

The EU and national supervisors have noticed this trend, and we can expect an increasing and direct control of key ICT providers by the financial supervisors in the near future.

 

Civil law and dispute resolution

 

Judicial reorganisation procedure (“PRJ/WCO”): two upcoming laws

The first draft bill facilitates access to the PRJ/WCO.

The second one applies to PRJ/WCO by transfer under judicial authority and requires the assignee to motivate its choice not to take over certain employees of the transferred enterprise on technical, economic & organisational grounds independent of the transfer itself.

Read here the key takeaways of these two draft bills by Fanny Laune and Maxime Born.

Stay tuned to learn more about these upcoming novelties in insolvency law!

Alternative dispute resolution (‘ADR’) is the new black in Brussels

On 3 September 2020, the Brussels French-speaking court for enterprises created a special section dedicated to conciliation, a well-known ADR mode.

A hearing before this section aims to help the parties reach a settlement with the support of a conciliator judge trained to ADR.

This measure is a big step to foster ADR in Brussels.

The roaring twenties’ complete makeover of the 1804 Belgian Civil Code

On 1 November 2020, the brand new Civil Code and the book on evidence came into force. On 1 September 2021, it will be the turn of the book on property law.

Recently, the new Belgian government also confirmed its commitment to proceed, in 2021, with the reform of the Law of obligations prepared by an expert commission including Rafaël Jafferali and Sander Van Loock.

This reform strikes a new balance between strengthening party autonomy and expanding the courts’ role where necessary.

New rules on evidence: same old same old?

On 1 November 2020, the new book VIII on evidence of the new Civil Code entered into force. Although the new rules do not seem to deviate from the old ones radically, new principles might prove to be game-changers and will at least modify the way litigators deal with evidence.

For the 10 key takeaways of the new book VIII, see our previous news here authored by Béatrice Thieffry and Charles-Edouard Lambert.

The most iconic change is probably that the judge may now shift the burden of proof in exceptional circumstances and with a special motivation.

 

Real estate and public law

 

Upcoming (r)evolution of Belgian property law?

Manuela von Kuegelgen explains 10 key practical takeaways of the upcoming reform here.

On 1 September 2021, Book III of the new civil Code on property law will come into force. The new rules are more transparent, flexible and modern, but many questions remain, and discussions will be intense for a while…

Don’t wait until the last minute to adapt your contracts. How? Where to start? Read our highlight here or contact our team for assistance.

The strengthening of public cooperation

When can public authorities cooperate without going through a public procurement procedure?

Laura Grauer highlights the conditions for such cooperation here, based on the CJEU’s recent decision clarifying the requirements that such cooperation must fulfil to remain outside the scope of public procurement rules.

Compulsory insurance in the construction sector: perfectly imperfect

One year ago, it became mandatory for service providers others than architects to cover for their civil liability and professional indemnity.

Nevertheless, in 2020, it is still not clear what needs to be insured by whom.

Thomas Braun and Alexia Faes clarify the existing rules here.

***

Thank you for following our End-of-Year Countdown! Our lawyers are happy to assist you should you need any guidance.

Don’t forget to sign up to our LinkedIn page never to miss our regular legal updates.

 

 

(R)évolution du droit des biens : 10 points clés pour le droit immobilier

La loi du 4 février 2020 a réformé et modernisé en profondeur le droit des biens. Cette loi introduit un nouveau Livre 3 dans le nouveau Code civil.  La réforme entre en vigueur le 1er septembre 2021. Les dispositions du livre 3 sont supplétives sauf les définitions et les dispositions qualifiées d’impératives.

Voici dix points clés pour la pratique immobilière.

1. La notion d’immeuble est modernisée.

La définition vise ainsi non seulement les fonds de terre mais aussi les divers volumes les composant, déterminés en trois dimensions. Le volume est un espace géométrique à trois dimensions, géographiquement situé dans un lieu précis. Le cadastre sera adapté à cette nouvelle vision de la propriété en 3D qui n’existait pas dans le passé.

2. La propriété immobilière n’est plus infinie.

Actuellement, et sous réserve de controverses, la propriété s’étend en principe au-dessus et sous le sol sans limitation (« jusqu’au ciel et jusqu’au centre de la terre »). Dorénavant, la propriété est limitée à une hauteur au-dessus et à une profondeur en dessous du sol utiles à l’exercice des prérogatives du propriétaire.

Le Code ne précise toutefois pas si cette limite s’apprécie subjectivement dans le chef du propriétaire actuel ou objective en fonction de la capacité utile du bien lui-même. Les travaux préparatoires indiquent que « Cette limite dépendra des possibilités d’exploitation réelles et potentielles du bien dans le chef du propriétaire lui-même, à la lumière des données économiques, urbanistiques et de construction physique du fonds ».

3. Un tiers pourra plus facilement « empiéter » sur le fonds voisin.

En fonction des circonstances, le propriétaire sera le cas échéant obligé de supporter cet empiètement en conférant au voisin un droit de superficie ou en lui vendant la partie du bien où se situe l’empiètement.

4. La publicité foncière est élargie.

Les actes qui accordent un droit de préférence, un droit de préemption ou un droit d’option sur un droit réel immobilier doivent être transcrits. Les titulaires de ces droits seront mieux protégés. Leur droit étant public, les tiers qui contracteraient avec le propriétaire en méconnaissance de ces prérogatives seront en principe supposés de mauvaise foi.

5.  Le Code crée de nouvelles servitudes légales au bénéfice de tout titulaire d’un droit réel d’usage (usufruit, emphytéose, superficie) sur un immeuble.

Ce titulaire profite, en vertu de la loi, de toutes les servitudes nécessaires à l’exercice de son droit sur le fonds grevé dudit droit réel.

6. Si le bien disparaît, le propriétaire peut exercer son droit sur le bien qui vient en remplacement du bien détruit.

On vise ici notamment les créances qui se substituent au bien, telle l’indemnité due par des tiers, à raison de la perte, de la détérioration ou de la perte de valeur de l’objet.

7. La théorie des troubles du voisinage est codifiée.

Un propriétaire ne peut causer à son voisin un trouble qui excède la mesure des inconvénients normaux du voisinage. En cas de trouble excessif, le juge peut ordonner une réparation pécuniaire ou en nature, ce qui était controversé auparavant. Autre nouveauté importante : si un immeuble occasionne des risques graves et manifestes en termes de sécurité, de santé ou de pollution à l’égard d’un immeuble voisin, le propriétaire ou l’occupant voisin peut demander des mesures préventives afin d’empêcher que le risque se réalise.

8. L’usufruit est largement réformé.

L’usufruit immobilier dans le chef des personnes morales n’est plus limité à trente ans. Cette durée est portée à 99 ans.

Pour l’anecdote, la durée trente ans correspondait à l’espérance de vie moyenne en 1804. L’usufruit d’une personne physique étant viager, la durée de l’usufruit de la personne morale était calqué sur cette durée de vie qui aujourd’hui plus longue.

La notion de grosses réparations est dorénavant définie : il s’agit essentiellement des réparations structurelles ou celles dont le coût excède manifestement les fruits du bien. Le nu-propriétaire à qui incombent ces réparations peut demander à l’usufruitier d’y participer proportionnellement à la valeur de son droit par rapport à la pleine propriété.

Dernière chose : les parties sont obligées de faire réaliser une description de l’objet de l’usufruit.

9. L’emphytéose (droit de pleine jouissance sur un immeuble) est revisitée.

Le droit d’emphytéose porte uniquement sur des immeubles par nature (fonds de terre et volumes) ou par incorporation. Ceci exclut la constitution d’une emphytéose sur un immeuble incorporel (interdiction des « sous-emphytéoses).

En revanche, les titulaires d’un droit réel d’usage sur un bien immeuble corporel peuvent constituer sur celui-ci un droit d’emphytéose dans les limites de leur droit. L’emphytéose sur le domaine public est admise dans la mesure où la destination publique n’y fait pas obstacle. La durée minimale de l’emphytéose est réduite de 27 à 15 ans (durée normale d’un leasing immobilier).

Le caractère nécessairement onéreux du droit d’emphytéose disparait. Le régime des réparations est modifié.

Pour les immeubles objets du droit et les ouvrages que l’emphytéote a l’obligation de réaliser, l’emphytéote doit réaliser toutes les réparations, en ce compris les grosses réparations. Pour les immeubles construits par l’emphytéote sans y être obligé, l’emphytéote ne doit réaliser que les réparations rendues nécessaires pour l’exercice des autres droits réels d’usage sur l’immeuble.

10. La superficie (dissociation temporaire en principe de la propriété) est révolutionnée.

Sa définition est totalement modifiée : la superficie confère la propriété de volumes, bâtis ou non, en tout ou en partie, sur, au-dessus ou en dessous du fonds d’autrui, aux fins d’y avoir tous ouvrages ou plantations. La superficie doit avoir pour but de construire des ouvrages. On ne peut réserver à l’infini un droit de propriété sur des volumes : le droit s’éteint à défaut par prescription extinctive.

Le droit de superficie peut être constitué par tout titulaire d’un droit réel d’usage, dans les limites de son droit. Sa durée est étendue à 99 ans. Par exception, la superficie est perpétuelle si elle vise la construction d’ouvrages affectés au domaine public ou si elle concerne des ensembles immobiliers hétérogènes, susceptibles de gestion autonome et ne comportant pas de parties communes. Pour ces ensembles, l’interdiction de parties communes pose un réel problème pratique : comment en effet concevoir l’absence d’équipement communs ou d’usage collectif sans de telles parties « communes » ? La superficie emporte transfert de propriété des bâtiments existants sauf disposition contraire du contrat, ce qui aura des implications fiscales (paiement des droits d’enregistrement sur la valeur des biens transférés).

Quant aux réparations, le superficiaire et le constituant du droit réalisent, relativement à leur propriété, les réparations d’entretien et les grosses réparations ainsi que celles qui seraient nécessaires pour l’exercice des autres droits d’usage existant sur le bien.

***

Pour toute question ou assistance, veuillez contacter Manuela von Kuegelgen

mvk@simontbraun.eu  |  +32 2 533 17 33

The strengthening of public cooperation

Non-institutionalised cooperation between contracting authorities (pouvoir adjudicateur /aanbestedende overheid) allows them to resort to mechanisms for pooling one or more of their missions freely, without going through public procurement procedures. In 2020, the CJEU has clarified one of the conditions allowing contracting authorities to use this legal exception and avoid public procurement rules.

Version française disponible ici.

Such a cooperation agreement shall fall outside the scope of public procurement rules when all the following conditions are fulfilled (Law of 17 June 2016 on public tendering):

  • the implementation of that cooperation is governed solely by considerations relating to the public interest;
  • the participating contracting authorities perform on the open market less than 20 % of the activities concerned by the cooperation; and
  • the contract establishes or implements a cooperation between the participating contracting authorities with the aim of ensuring that the public services they have to perform are provided to achieve common objectives.

It was already known that the last condition implies the existence of genuine cooperation between public entities in the performance of the public service that is the object of the cooperation.

In its ruling of 4 June 2020, the Court of Justice of the European Union (CJEU) confirmed the need for the contracting authorities concerned to genuinely cooperate, considering that the notion of “cooperation” is a key concept to exclude the mechanism of public procurement law.

The CJEU considers that “the joint participation of all the parties to the cooperation agreement is essential to ensure that the public services they have to perform are provided and that that condition cannot be deemed to be satisfied where the sole contribution of certain contracting parties goes no further than a simple reimbursement of costs”.

Therefore, for an agreement between public authorities to escape the competitive rules of public procurement law, it is not sufficient for one entity to pay for the object of cooperation and for the other entity to execute it. In such a case, one cannot tell the difference between such a “cooperation” and a public procurement contract that is not covered by the exclusion provided for in this provision.

The CJEU further specifies that the terms and conditions surrounding the conclusion of the cooperation agreement must also reflect an intrinsically collaborative dimension between public authorities: “the conclusion of a cooperation agreement between parties in the public sector must be discernible as the culmination of a process of cooperation between the parties to the agreement”.

Hence, during the preparation of a cooperation agreement, the parties must jointly define their needs and the solutions to be provided (CJEU, Remondis Gmbh, Case C-429/19, 20 June 2020, points 26 to 34).

***

For any question or assistance, please contact Laura Grauer:
laura.grauer@simontbraun.eu

Judicial reorganisation procedure: two draft bills pending under the benefit of urgency

The legislator has tabled two draft bills, respectively on 10 June 2020 and 21 October 2020, to amend a.o. the provisions relating to the judicial reorganisation procedure (PRJ/WCO) governed by Book XX of the Code of Economic Law (CEL).

The review of these draft bills is being carried out under the emergency procedure notably because of the current economic crisis and its impact on the continuity of enterprises.

The first draft bill of 10 June 2020

It aims at adapting the PRJ/WCO to the needs of the economic crisis caused by the Covid-19 pandemic, notably by facilitating access to it, especially for SME’s.

There are three main proposals to this end:

1. The broadening of the possibility to appoint one or more judicial representatives for debtors in difficulty

  • by allowing the debtor himself to ask the president of the competent Court of Enterprise to appoint a judicial representative
  • when “exceptional circumstances or events […] endanger or are likely to endanger all or part of the proper functioning of the economic activities of the debtor” ;

2. The creation of a new provisional guarantee system

With this new system, the debtor could obtain, under the supervision of the court and, if necessary with the help of a company mediator, certain temporary payment facilities. Those facilities notably consist in a suspension period during which the obligation to pay remains intact, but is suspended without any sanction being imposed.

As far as the creditors are concerned:

  • They keep their right of set-off, their right of retention and the possibility to invoke the defence of non-performance;
  • They can also oppose these provisional measures throughout their duration before the president of the Court of Enterprise. In that case, it is up to the president of the Court to decide by assessing the interests of each party;
  • The creditors cannot terminate a contract during the suspension period. In addition, the penalty clauses are deemed unwritten.

3.  The relaxation of the formal admissibility requirements by abolishing the inadmissibility sanction of the application in case of failure to file a specific document/exhibit.

This being said, the debtor shall justify “in a detailed manner” the reason why he is unable to provide the requested document/exhibit. Such an impediment can only be temporary.

Certain documents (see art. XX.41, §2, 5° to 9° of the CEL) must be filed at least 48 hours before the hearing on the application for the PRJ/WCO. If it remains impossible for the debtor to provide these documents within the time limit indicated by the Court, the debtor may file an explanatory note in the register to justify this impossibility.

The second draft bill of 21 October 2020

It notably aims at incorporating the Plessers ruling of the Court of Justice of the European Union in Articles XX.84 and seq. of the CEL regarding the PRJ/WCO by transfer under judicial authority.

The legislator proposes to impose upon the assignee an obligation to motivate his choice not to take over certain employees of the transferred enterprise on technical, economic or organisational grounds that are independent of the transfer itself. The insolvency Court shall check this motivation when the authorisation of the transfer is granted.

Conclusion

Given the uncertain times we are living in now, the measures proposed by these two draft bills should be well received by enterprises.

The first one enables enterprises, particularly SMEs, to obtain the help of a judicial representative and some temporary payment facilities according to a procedure that is simpler, faster and more discreet than the PRJ/WCO. And if this procedure should prove insufficient, access to the PRJ/WCO would then be facilitated.

These measures are in line with the requirements of the European directive on frameworks for preventive restructuring, debt forgiveness and forfeiture, and measures to be taken to increase the efficiency of insolvency proceedings. Our legislator is apparently already anticipating the implementation of this Directive which should be transposed by 17 July 2021.

As for the measures proposed in the second draft, they clarify the rules on the maintenance of employees’ rights in the event of a PRJ/WCO by transfer under judicial authority to avoid such transfer operations under Belgian law to be questioned under the recent European case law.

We will of course monitor these next developments in the insolvency world closely, so stay tuned.

***

Fanny Laune and Maxime Born

Should you have any question, do not hesitate to contact Fanny Laune:
fanny.laune@simontbraun.eu

Simont Braun secures the admissibility of Test Achats’ class action against Ryanair before Belgian Courts

Simont Braun represents Test Achats in a major class action against Ryanair, which aims at obtaining indemnification for passengers who were victims of cancellations and delays of flights in summer 2018. The total compensation is estimated at €16 million.

On 7 December 2020, the Brussels Business Court declared this very large class action admissible. This is a significant victory for consumers’ rights given the number of people (about 30,000 passengers) represented in the context of a single class action in Belgium.

The Brussels Court set aside the provision of Ryanair’s general terms and conditions granting exclusive jurisdiction to Irish courts to hear the matter. This clause was considered as manifestly unfair – and this is a first in Belgian case law – towards all 30,000 passengers, building on the earlier case-law of the Belgian Supreme Court which had so far only examined such choice of court clause in individual cases. This is also the first time that a jurisdiction clause is declared null and void in the context of a class action in Belgium.

The Court also granted strong and very concrete publicity measures for this class action to ensure its efficiency (opt-in via e-mail – more information in this regard on Test Achats’ website).

This decision is a significant step for this exceptionally large class action in Belgium.

The Simont Braun’s team representing the interests in Test Achats is led by partner Rafaël Jafferali with the assistance of Fanny Laune (Counsel), Charles-Edouard Lambert and David-Alexandre Sauvage (Associates).