News

On the 9^th of April 2020, Royal Decrees in response to the COVID-19 crisis were published in the Belgian Official Gazette.

One of these decrees, Royal Decree no. 2 on the extension of statute of limitation and other time limits for taking legal action, as well as the extension of time limits for the administration of justice and written procedures before the courts and tribunals provides for an adapted legal framework in civil procedures.

This insight summarizes the main provisions of the Royal Decree.

HOW IS COMPUTED THE EXTENSION OF TIME LIMITS IN CIVIL PROCEDURE ?

As a rule, all procedural time limits in proceedings that are pending or are yet to be instituted, as well as all time limits for lodging an Appeal expiring between the 9^th of April 2020 and (including) the 3^rd of May 2020 shall be extended automatically to one month after the end of this period.

The end date of the 3^rd of May could be extended by a following Royal Decree, depending on the duration of the crisis measures.

Example:

The time limit for lodging an Appeal expires on the 15^th of April 2020. This time limit will be extended until the 3^rd of June 2020 (one month after the 3^rd of May 2020).

Should a future Royal Decree extend the end date of the crisis period by 15 days, the new time limit for the Appeal will be set on the 18^th of June 2020.

If this extension is applied, the date of expiry of any subsequent time limits will also automatically be adjusted with the same amount of time as the extension.

Example:

Under a binding trial calendar, Party X has to file a trial brief on the 30th of April 2020, and  subsequently, Party Y has to file on 31st of July 2020.

Party X’s new filing date will be set on the 3rd of June 2020. Party Y’s new filing date will be postponed with the same time period as the extension, i.e. 34 days. The filing date for Party Y will hence be the 3rd of September 2020.

ARE THERE EXCEPTIONS TO THE EXTENSION OF THE PROCEDURAL TIME LIMITS ?

If one of the parties argues that the normal continuation of the proceedings is urgent and that any delay may be detrimental, that  party can request to apply the “old” calendar in writing or verbally at the hearing.

When a request is made in writing, the other parties are informed of this request and can deliver their written remarks within 8 days. After this period, the Judge will decide on the matter and conclude whether the request is founded or not. This decision is no subject to appeal.

WHAT ABOUT THE EXTENSION OF STATUTE OF LIMITATION PERIODS ?

All statutes of limitation and other time limits for bringing an action before civil courts that expire between the 9^th of April 2020 and (including) the 3^rd  of  May 2020 (unless otherwise adapted by a new Royal Decree), are also to be extended in the same way as the procedural time limits.

Example:

Article 2:143, § 4 and Articles 2:44 and following of the Companies and Associations Code provide for the possibility to request the annulment of a decision taken by the general shareholders’ meeting of a company. This claim must be made within a period of six months following the date on which the decision became enforceable against the claimant or the date on which the claimant was informed about the decision.

If such a period would expire between the 9^th of April 2020 and the 3^rd  of  May 2020 (included), it would be extended for an additional period of one month as of 3^rd of May, thus until the 3^rd of June 2020

WHAT IS THE GENERAL RULE FORESEEN  REGARDING PLEADINGS ?

In order to meet the requirements of “social distancing” during the COVID-19 crisis, without completely paralyzing the functioning of the Belgian courts and tribunals, Royal Decree no.2 introduces a temporary regime whereby, as a general rule, oral pleadings are replaced by a written procedure.

According to Article 2 of the Royal Decree no.2, all civil matters where hearings were scheduled in the period between the 11^th of April 2020 until (and including) the 3^rd of June 2020 (provisionally), will be decided by the courts without oral pleadings and only based on the parties’ written trial briefs and the submitted bundles of evidence.

If necessary, the courts may request afterwards that the parties give oral explanations, possibly by videoconference.

The written procedure will apply automatically, the parties do not need to request its application.

SCOPE OF APPLICATION OF THE WRITTEN PROCEDURE ?

The written procedure only applies in civil proceedings and not in criminal proceedings except for the civil claims pending before a criminal judge.

WHAT ABOUT THE FORMALITIES ?

It is sufficient that trial briefs were filed. It is not required that they comply with all rules of the procedure (time limits, forms, etc.). Consequently, if the judge would afterwards disregard a certain trial brief, he can still deliberate the case without holding a hearing.

ARE THERE EXCEPTIONS TO THE WRITTEN PROCEDURE ?

The Royal Decree mentions two exceptions to the written proceedings:

Firstly, when all parties object to this jointly; in that case, the judge will postpone the case until after the Corona crisis is over – this may cause significant delays.

Secondly, if not all parties object, but only one or more, the judge has three options: (i) postpone the case; (ii) allow oral pleadings (for example via videoconference); (iii) or nevertheless impose written proceedings.

No appeal is possible against this decision.

A party that does not agree with the written procedure must inform the court in writing, stating its reasons:

• At the latest on the day before the hearing for cases set for hearings until the 17^th of April 2020;
• At the latest one week before the hearing for cases set for hearings as from the 18^th of April 2020 until the 3^rd of June 2020.

However, parties who initially did not agree to a written procedure may revert on this decision at any time. Namely, by invoking the written procedure provided for in Article 755 of the Judicial Code.

In addition to these exceptions provided for in the Royal Decree, Article 1004/1 of the Judicial Code which gives the right to minors to be heard by the court in procedures concerning parental authority, residence arrangements and right to personal contact, remains applicable.

OTHER PRACTICAL IMPLICATIONS ?

The requirement that all parties will have to submit trial briefs in the written procedure will exclude the application of these rules in certain situations:

• When party is not represented by a lawyer and did not file written trial briefs itself;
• The possibility of a default judgment (Article 804 Judicial Code) will de facto be excluded in the period between the 11^th of April 2020 until the 3^th June 2020 (provisionally),  ;
• Since “oral submissions” do not exist, also the application to cases heard at the introductory hearing will be virtually excluded (Article 735 Judicial Code).

It must be emphasized that this is an exceptional measure. The judge is given the freedom, but also the responsibility, to decide in the light of all relevant circumstances, including avoiding delays as much as possible, unless serious interests make a delay inevitable. For example, the fact that the parties may not be assisted by a lawyer deserves particular attention.

The Royal Decree contains various provisions on co-ownership (chapter 1) and company and association law (chapter 2), those commented below, in the context of the fight against the COVID-19 pandemic. The measures foreseen in chapter 2 of the Royal Decree may be applied even if they are not contemplated by the Articles of association or are prohibited by them.

GOAL OF THE MEASURES FORESEEN BY THE ROYAL DECREE ON COMPANY AND ASSOCIATION LAW ?

These measures temporarily allow companies and associations as well as legal persons established under specific legislation (in case they have a board or a general meeting of shareholders) to organise general shareholder’s meetings and board meetings in more flexible ways. For that specific purpose and for certain aspects only, these measures allow to deviate from the provisions of the Companies and  Associations Code and the Articles of association (please see our previous insight on the impact of the COVID -19 crisis on corporate matters).

MANDATORY OR OPTIONAL REGIME ?

The Royal Decree sets out an optional regime. Companies that choose not to make use of the options offered must fully comply with the rules applicable under the Companies and Associations Code.

MEASURES LIMITED IN TIME ?

The measures provided by the Royal Decree apply to general shareholders’ meetings and board meetings that should have been held or must be held between 1^st of  March 2020 and 3^rd of May 2020, or in relation to which the convening notice was or must be sent or published between those same dates. The 3 May 2020 deadline may be extended by the king.

FIRST OPTION PROVIDED BY THE ROYAL DECREE FOR THE ORGANISATION OF THE GENERAL SHAREHOLDERS’ MEETINGS ? 

A first option is that the board may compel the participants to the general shareholder’s meetings:

• to vote remotely in advance of the meeting[1]; and
• to vote by proxy through a proxyholder which may be appointed by the company (In case a shareholder would have already appointed his/her/ its own proxy holder, the votes or abstentions will nevertheless be taken into account if the proxy granted to this proxy holder contains specific voting instructions)

In listed companies, the voting forms and proxies must reach the company no later than the 4^th day prior to the meeting. An e-mail with a scan or a photo of the forms or proxies is sufficient .

Even without an authorization in the Articles of association, any company can make available to the participants in its general shareholders’ meeting an electronic means of communication as pointed out in Article 7:137 of the Companies and Association Code that must allow the shareholders to be directly, continuously and simultaneously informed of discussions.

This possibility may be contemplated in smaller companies. In larger companies, this option will likely not be used as the technology required is not widely tested and would imply the electronic verification of the identity of the shareholders who attend remotely and provide for the possibility to vote electronically.

However, even if the meeting cannot be held remotely, this does not preclude the possibility for a company to, for example, make a livestream of the shareholders’ meeting passively available to its shareholders.

WHAT ABOUT THE RIGHT TO ASK QUESTIONS ?

In case shareholders wish to exercise their right to ask questions, the board, if it has requested the participants to vote remotely or by proxy, may also compel them to provide such questions in writing before the meeting.

In such case, questions must be answered in writing and at the latest prior to the vote. The shareholders or members must be informed of the answers. Listed companies must publish the answers on their website. If the meeting is broadcasted live, the questions can also be answered orally during the meeting or recorded for later broadcasting (e.g. by audio or video conference).

IS THE PHYSICAL PRESENCE OF SOME OF THE PARTICIPANTS NEVERTHELESS REQUIRED ?

If the board of directors has opted for a remote vote process or a vote by proxy, the members of the bureau of the shareholders’ general meeting, the directors, the (single) proxyholder and the statutory auditor are not required to be physically present. They can attend the meeting remotely through teleconference or video conference.

WHAT ARE THE SPECIFIC MEASURES FOR EXTRAORDINARY SHAREHOLDERS’ MEETINGS ?

For resolutions that must be enacted in a notarial deed, the physical attendance of the notary and one director/member of the bureau and/or the single proxyholder is required to sign the deed.

WHAT ABOUT THE CONVENING FORMALITIES ?

The usual convening proceedings will apply. However, listed companies are exempted from the obligation to send convening notices and other documents by regular post.

Non-listed entities are also exempted from the obligation to send the documents by regular post or to make these documents available at the registered seat. They may send the convening notices and accompanying documents to their shareholders or members by e-mail.

Legal entities that had already convened their general shareholders’ meetings can still amend the modalities of the meeting and the voting procedure without having to comply again with the convening formalities. However,  in such case, they must inform the shareholders or members concerning this change in the most efficient way (e.g. via the website, e-mail).

Listed companies must announce the change via a press release and on their website at the latest six days before the meeting.

WHAT ABOUT THE SECOND OPTION, THE POSTPONEMENT OF THE GENERAL SHAREHOLDERS’ MEETING TO A LATER DATE?

As second option, the Royal Decree allows the board to postpone the date of the meeting, even if the meeting was already convened. In which case the shareholders must be informed in due time.

This possibility is particularly relevant for the annual general shareholders’ meetings, which may be postponed for up to 10 weeks after the statutory deadline (The deadlines in relation to the adoption of the annual board report and the approval and filing of the financial statements will be consequently also postponed by up to ten weeks). Other general shareholders’ meetings can be postponed indefinitely (until a new decision is taken by the company).

Listed companies must announce the postponement at the latest 4 days prior to the scheduled date.

The postponed meeting requires a new convening notice, in relation to which the usual convening formalities apply (unless the crisis measures are still applicable then).

The postponement of the meeting is not possible (i) when the shareholders’ meeting is convened in the context of the alarm bell procedure (capital impairment) where the net assets are, or risk to become, negative, (ii)  at the request of the shareholders, members pursuant to the provisions of the Companies and Associations Code or (iii) at the request or by the statutory auditor. In these cases, the board can still apply the mechanisms listed above ( option 1).

SPECIFIC MEASURES FOR BOARD MEETINGS ?

Even in the absence of a specific provision in the Articles of association, board meetings can be held by communication means allowing collegial deliberations (e.g conference call or video conference). Unanimous written decision-making is also possible, even if prohibited by the Articles of association.

For board resolutions that must be enacted in a notarial deed (e.g. resolutions concerning the use of the authorised capital), the physical presence of one board member or representative (designated by the board by virtue of a proxy) before the notary is sufficient.

[1] For the SA, the board of directors makes available the form for voting or publish it  via the company’s website. For the SRL, its Articles of association must be complied with and  in the absence of a specific statutory provision, the conditions for remote participation must be complied with (Article 7:146 of the Companies and Associations Code, except if derogations are foreseen by the Royal Decree)  (the tool used must be able to verify the participant’s identity and allow for direct and uninterrupted debate)

Since end March 2020, several municipalities have requisitioned hotels in order to house the homeless for the duration of the lockdown. Considering the urgency and the need to contain the pandemic, additional properties could be requisitioned not only for the homeless but also to shelter people that still need to be in quarantine after leaving the hospital.

WHAT IS A REQUISITION ?

Although there is no legal definition, it is generally accepted that a requisition is the exceptional right of the state to temporarily claim and impose certain services, to request people to perform certain services and to attribute itself certain assets. It cannot be regarded as a normal means of administration, since there must always be exceptional and extremely serious circumstances justifying the requisition. The exceptional and extremely serious circumstances at hand must make it difficult or nearly impossible for the administration to achieve its end by any other means.

The Constitution does not provide any specific protection regime regarding requisitions, as it does for expropriations, however a compensation will be often be provided. Furthermore, the requisition needs to be founded on a legal basis.

WHAT ARE THE GROUNDS FOR THE REQUISITIONS OF IMMOVEABLE ASSETS SUCH AS HOTELS ?  IS THERE A COMPENSATION ?

Articles 11 and 181 of the Civil Security Law of the 15^th of May 2007 authorizes the Minister or his delegates, as well as the Mayor and Zone Commander (and/or his delegate officials while intervening) to requisition any natural person and legal entity and  moveable/ immoveable assets alike  for interventions ensuring all missions of the civil security operational services  such as, notably, urgent medical assistance, rescue and assistance to persons in endangered conditions. The refusal or the fact of neglecting to comply with requisition measures is punished by civil penalties or imprisonment sentences (Article 185 of the Civil Security Law of the 15^th of May 2007 and Article 422 of the Criminal Code).

The Royal Decree of the 25^th April 2014 further implements the execution modalities for the requisitions based on Article 181 of the Civil Security Law and provides a clear framework as to the notification of a requisition order and the compensation to be paid. The compensation may be jointly agreed by the  persons concerned by the requisitions and the government. In the absence of such agreement, the requesting authority shall determine the compensation’s amount and shall notify it to the persons concerned (a specific process applies in case this amount is disputed).

Furthermore, for the missions which are not covered by Article 11 of the Civil Security Law of the 15^th of May 2007, the Municipality, in concreto the Mayor, has the power to accommodate a requisition on the legal basis of Articles 133, al.2 and 135,§2,5° of the New Municipalities Law.

These provisions allow the Mayor to issue Police Decrees in the unforeseen events of riots, malicious gatherings, serious disturbances of public peace or any other unforeseen events, where the slightest delay could endanger or harm residents. Within this legal basis the Mayor can execute requisitions on both people as moveable/immoveable assets.

WHAT ARE THE SPECIFIC MEASURES ALDREADY ADOPTED REGARDING PRODUCTS’ REQUISITIONS ?

The Ministerial Decree of the 23^rd of March 2020 (hereafter the “MD”) on special measures in the context of the SARS-CoV-2 pandemic, on the basis of Book XVIII of the Economic Law Code, stipulates that :

• The officials appointed by the competent Minister may requisition certain medical equipment;
• The requisition order will be signed by the Director-General of the General Directorate of Economic Inspection;
• In case of requisition, a compensation will be paid for covering the cost price of the product.

The requisition order may concern the following products: surgical and other masks, screening equipment, disinfection wipes for medical use, respirators and associated devices and accessories, sheaths for single-use blood pressure measurement, self-adhesive ECG electrodes, devices used for Broncho alveolar lavage, inhalation chambers, masks bronchoscopes for single use, hydro-alcoholic gels, protective gels, protective goggles and masks, long sleeve gloves, hand alcohol and hydrogen peroxide 12 % and nebulizers.

In the current MD, the Minister refers explicitly to Article XVIII.2. of the Economic Law Code as a legal basis for the measure. This Article enables the Minister to requisition products in the event that unforeseen circumstances of occurrences threaten entirely or partly the good functioning of the economy, and allows these products to be made available to the state, public services or private persons and institutions. The requisition order may be extended to the equipment required for the production, processing, transport, storage of the product or its sale.

COMPENSATION ?

The MD gives no explanation on how to assess the product’s cost price. Is the cost price evaluated in the light of the sale’s price of the assets for the company? Is the loss of revenue to be taken into account ?

In the following days, there is a possibility that another MD will be issued that may derogate from the above-mentioned legal frameworks for requisitions. In order to ensure a quick response to the current Corona crisis, the Parliament voted on two different laws granting the federal government powers that normally are granted to the Parliament.

The Coronavirus is disrupting work relations. New rules have been urgently adopted in recent days to help employers deal with the consequences of government measures imposed to contain the epidemic. Let’s take stock of the HR situation to date.

HOW TO (RE)ORGANISE WORK?

The ministerial decree of 18 March 2020 stipulates:

• For the majority of employers in the private sector, the obligation:
  • to organise telework for all jobs for which this is possible;
  • if this is not possible, to reorganise the working conditions in the usual workplace (and during transport time, if collective transport to the workplace is provided for, which is often the case in the construction sector) so that everyone can be sufficiently separated (at least 1,5m) from one another (respect for social distancing). How to achieve this? By adjusting fixed working hours, by introducing flexible working hours, by organising rotations, etc.;
  • if this is not possible, to close the workplace.
• That the above rules do to apply for companies recognised as necessary for the protection of vital needs (this includes health institutions, the media, telecommunication infrastructure, waste collection and processing services, taxi services, fuel suppliers, production chains that cannot be stopped for technical reasons, businesses and companies involved in the food chain, etc.). These companies must nevertheless implement social distancing measures as much as possible. The list annexed to the ministerial decree is restrictive but ultimately includes many companies, which is currently giving rise to discussions between employer and union representatives in several sectors.

As warrantors of health and well-being at work, employers must ensure that risks are assessed and adequate protective measures are put in place, which means, at the very least, in addition to measures ensuring social distancing (desired or imposed):

• Review the travel and business trip policy so as to eliminate/limit travel and business trips to what is strictly essential;
• Provide for improved hygiene of the workplace (and work tools);
• Enable workers to maintain meticulous hand hygiene by providing accessible disinfectants and communicate clearly about this subject;
• Provide and communicate instructions in the event that a worker shows signs of illness, in particular infection by the Coronavirus, both with respect to the worker him or herself (isolate him or her, safeguard the manner of his or her return home, etc.) and with respect to other workers who have been in contact with him or her (disinfection of the premises, etc.).

A checklist is available on the website of the FPS Employment (https://employment.belgium.be/en)

HOW DOES TEMPORARY UNEMPLOYMENT WORK?

An employment contract that can temporarily no longer be performed due to an unforeseeable event beyond the control of the employer and the employee, is suspended for force majeure. In this case, the employer does not have to pay the salary. Compensation by the National Employment Office (“RVA” / ”ONEM”) (hereafter “NEO”) is possible and is in principle assessed on a case-by-case basis depending on the circumstances.

• Temporary unemployment because of force majeure

The position of the NEO has progressively eased in recent days to the extent that, on the one hand, it has considerably broadened the scope of application of temporary unemployment because of force majeure and, on the other hand, it has greatly simplified the formalities to access it.

Broader scope of application

Thus, for the period from 13 March 2020 (and until 5 April but extendable until 30 June 2020), a flexible application of the concept of force majeure will be accepted. The NEO has indicated that all situations of temporary unemployment related to the Coronavirus will be considered as temporary unemployment for reasons of force majeure, even if, for example, it is still possible to work on certain days. The NEO explicitly refers to the following situations in particular:

• Companies in the sectors in which a closure has been imposed by the ministerial decree of 18 March 2020 such as restaurants, bars etc.;
• Companies that are (partially) closed because they do not have tasks that can be carried out through telework for (all) their workers and they cannot respect the social distancing measures in the performance of the work and in the transport they organise (for example, companies in the construction sector);
• Companies that suffer production stoppages because they depend on suppliers who no longer deliver;
• Workers who are quarantined because they have been exposed to contamination;

It seems, moreover, that the NEO considers that, exceptionally, even situations of reduced work following a general drop in activity (reduction in the number of orders, projects, etc.) may be considered as temporary unemployment for force majeure (and no longer as temporary unemployment for economic reasons), provided, of course, that this drop in activity is linked to the Coronavirus epidemic.

It is not required that the company is completely closed down. In practice, this means that some workers may be temporarily unemployed and others may not. Workers can also alternate between unemployment days and working days (however, an unemployment day must be an entire day).

The NEO specifies that an employer who had initially sent a communication of temporary unemployment for economic reasons can thus switch to the regime of temporary unemployment for force majeure (reason: “coronavirus”) without having to complete any further formalities.

Simpler formalities

Exceptionally (and temporarily until 5 April 2020, possibly extended until 30 June 2020), it is no longer necessary to submit a file to the regional unemployment office of the NEO. A simple declaration (Declaration for Social Risk [“ASR” / ”DRS”] scenario 5) via the social security portal site is sufficient.

(Immediate) financial compensation for the workers  

The worker receives, without probationary period, the amount of 65% (increased to 70% until 30 June 2020) of his gross monthly salary (the latter being capped at EUR 2,754.76 gross). In addition, a supplement of EUR 5.63 per day of unemployment is paid by the NEO.

The Minister of Employment has also just announced that workers newly declared to the NEO will immediately receive a lump-sum unemployment benefit of EUR 1,450 per month (for a full time) pending the examination of their files.

The NEO has indeed to examine a considerable number of files. The number of 400,000 files has already been mentioned, which is an unprecedented situation.

• Temporary unemployment for economic reasons

This regime, which has been simplified as regards to employees by the Collective Labour Agreement (“CAO” / “CCT”) (hereafter “CLA”) n°47 concluded within the National Labour Council (“Nationale Arbeidsraad” / “Conseil National du Travail”) on 18 March 2020, implied requesting the FPS Employment for recognition as a company in difficulty, in particular, in the current context, on the basis of unforeseeable circumstances that lead to a substantial reduction in turnover, production or the number of orders over a short period of time.

This regime allows the use of a total suspension of performance (for a maximum of 16 weeks per year) or a partial suspension of performance (for a maximum of 26 weeks per year), or a combination of the two (within the same limits knowing that 2 weeks of partial suspension is equivalent to one week of total suspension).

However, the FPS Employment has explicitly indicated that during the period of flexible application of temporary unemployment for force majeure by the NEO, it will not take any action on applications for recognition as a company in difficulty, including those submitted since 13 March 2020.

Situations of reduced turnover, orders or production resulting from the Coronavirus epidemic will therefore preferably lead to a request for temporary unemployment for force majeure. It is advised to indicate ‘coronavirus’ in the declaration and not to refer to economic causes.

The regime of temporary unemployment for economic reasons remains applicable to situations where there is a drop in turnover, production and/or orders that are not linked to the Coronavirus epidemic.

EMPLOYERS SUPPORT MEASURES

• Payroll tax: automatic deferral of 2 months (without fine or interest in arrears). The payment relating to the declaration for the 1st quarter of 2020 is therefore postponed until 15 June 2020. It is also possible to apply for a phased payment plan without a fine (to be introduced by 30 June 2020 at the latest).

• National Social Security Office (“RSZ” / “ONSS”): accepts phased payment plans for the employer’s social security contributions for the 1st and 2nd quarters of 2020. The application form can be found on the NSSO website. (https://www.socialsecurity.be/site_fr/employer/applics/paymentplan/index.htm).

We assist employers on a daily basis in understanding and implementing the new measures. The situation is constantly changing. We will keep you informed of future developments.

HOW TO ORGANIZE THE ANNUAL GENERAL SHAREHOLDERS’ MEETING ?

The coming weeks are annual meeting season for calendar-year companies. In the current environment, what are the alternatives to in-person meetings provided by the new Belgian Code on Companies and Associations (“BCCA“)  ?

A first option to consider is to postpone the ordinary (annual) general shareholders’ meeting. In such case, the shareholders must be informed in due time, with a relevant explanation regarding the decision taken by the board of directors to not convene the meeting on the statutory date (breach of the Articles of association). For this breach of the Articles of association, the board could request specific discharge from the shareholders’ meeting.

Companies may also contemplate other options (as long as these options are not in contradiction with the provisions of their Articles of association and are applied pursuant to the BCCA requirements) :

• vote by proxy (the goal being to limit the number of shareholders attending the meeting). The shareholders can grant a proxy to another shareholder or a third party to attend the meeting in person and vote on his/her behalf. This possibility does not need to be provided for in the Articles of association. Even if the Articles do not expressly mention remote voting, companies could request shareholders to vote by proxy ahead of the meeting.
• remote vote prior to the shareholders’ meeting. The vote is expressed by letter (for the “SRL/ NV” and the SA / NV” ) or via the company’s website, by means of a form made available by the company (for the SA / NV”). The Articles of association must set out this possibility.
• participation to the general meeting by way of electronic means of communication  made available by the company (video conferencing, web portal, …). The procedure and conditions for the use of the electronic means must be provided for in the Articles of association. In principle, the participation to the meeting by way of electronic means is solely possible for the shareholders (and not for the bureau, the directors and the statutory auditor)
• shareholders’ resolutions can also be adopted via unanimous written resolutions. The Articles of association do not need to expressly foresee this possibility. However, this process can neither be applied for shareholders’ decisions that have to be recorded in an authentic deed nor by listed companies.

The companies’ choice will of course depend on their specific situation.

WHAT ARE THE SPECIFIC COMMENTS TO CONSIDER IN THE COMPANIES’ ANNUAL REPORT ?

Depending on the specific circumstances, the current situation could qualify as a material event or as a risk or uncertainty to be mentioned in the annual report.

WHAT ABOUT THE FILING OF THE FINANCIAL STATEMENTS ?

Late filing of the financial statements can lead to penalties. However, in case the late filing is due to an event of “force majeure”, a reimbursement of these penalties can be claimed. For such purpose, the company must evidence the “force majeure” and must claim the reimbursement within 18 months after the closing date of the annual accounts. Whether the coronavirus could be considered as “force majeure” event in this respect will largely depend on the evolution of the situation.

The Belgian government is considering solutions to allow some flexibility and facilitate the organisation of general meetings of shareholders under the current circumstances. We will update this insight when such measures are adopted.

The Coronavirus COVID-19 puts mankind to the test in many ways. In addition to countless medical, social and economic issues, several legal questions also arise. This article focuses on commercial law issues and more specifically on how commercial contracts can be affected by this epidemic. What if certain agreements can no longer be executed because of the Coronavirus? Can the Coronavirus be invoked as a case of force majeure (“overmacht”)?

As in most legal matters, the answer depends on the specific circumstances and a case-by-case analysis.

FORCE MAJEURE CLAUSE?

First and foremost, it is important to check whether the agreement contains a force majeure clause.

It is of course very unlikely that the parties would have established a contractual clause in relation to the outbreak of a Coranavirus, but it is possible, for example, that they have included a general clause on the outbreak of epidemics, health issues, government measures, etc.

Such clauses are very important, both because they can extend or limit the possibility of invoking force majeure, and because they can determine the consequences in the event a force majeure would occur.

BELGIAN COMMON LAW

In Belgian law, a force majeure situation allows a party to temporarily or permanently fail to perform its contractual obligation(s) without any risk of liability, because a change of circumstances makes it (absolutely or reasonably) impossible to perform the obligation(s).

This means that to invoke force majeure, the following three conditions must be met:
1) there must be an unforeseeable circumstance,
2) which is beyond the control of the party that is supposed to perform, and
3) which makes the fulfillment of the obligation(s) absolutely or reasonably impossible.

It is important to keep in mind that the burden of proof will lie on the party which fails to fulfill its contractual obligations.

Let’s assess whether the above conditions apply to the Coronavirus crisis:

1) CAN THE CORONAVIRUSCRISIS BE QUALIFIED AS AN UNFORESEABLE CIRCUMSTANCE?

An “unforeseen” circumstance amounts to a situation that could not reasonably be taken into account at the time the agreement was concluded.

At first sight, it seems safe to say that an average person (“bonus pater familias”) could not have foreseen the outbreak of an epidemic of such a magnitude, i.e. a virus which leads to the (semi)lockdown of several countries around the world.

However, in some cases it will be relevant to determine when it became clear that the Coronavirus would have such far-reaching consequences and when the agreement was concluded. If a contract is entered into when the force majeure situation already exists, the debtor cannot invoke it as a valid reason not to fulfill his contractual obligation.

2) IS THE CORONAVIRUS CRISIS BEYOND THE CONTROL OF THE PARTY SUPPOSED TO PERFORM?

The second condition of force majeure implies that the non-performance of an obligation is not caused by the fault of the person who is in breach.

In order for this condition to be met, it is essential to be certain that the coronavirus is the exact reason for the non-performance of the agreement.

For example, the non-execution can be due to the Coronavirus as such (i.e. illness) or due to the measures imposed by the government, the so called “Fait du Prince” (i.e. a governmental intervention, e.g. when the government closes restaurants and bars, leading to the cancellation of several supplier orders). However, in some cases also (personal) precautionary measures (e.g. closing your shop even before it was ordered by the government) could be a legitimate reason for non-performance.

In the latter case, there is of course a higher potential of dispute. It is therefore crucial to maintain a clear communication with the other contracting party at all times. Again, the question whether a judge will accept “precautionary measures” as a force majeure in the context of the Coranavirus will depend on the specific circumstances of the case.

3) DOES THE CORANAVIRUS CRISIS MAKE THE FULFILLMENT OF THE OBLIGATION(S) ABSOLUTELY OR REASONABLY IMPOSSIBLE?

According to part of the Belgian legal doctrine, the unforeseen event must have made the performance of the contract “completely” or “absolutely” impossible. In this view, only insurmountable physical, material or legal impediments are accepted as force majeure.

On the other hand, the majority of Belgian scholars defend a “relative” impossibility. Meaning that a human, reasonable or practical impossibility will be sufficient.

This third condition means that there are no fair, reasonable and practicable alternatives to execute the agreement. For instance, by delaying the performance of the contract, engaging a subcontractor, finding another delivery method, etc.

Regarding the Coronavirus, it is obviously difficult to determine when this “unforeseeable event” will end; hence a delay will not always be helpful. Also the fact that this epidemic affects so many people and companies will in most cases make it very challenging or even impossible to find subcontractors or substitutes to execute the agreement. Nevertheless, even in these extreme circumstances, the debtor must do everything possible to limit the potential negative repercussions of its non-performance.

CONCLUSION

It follows from the above that the Coronavirus should certainly not be considered as a “safe harbor” for not executing agreements or commitments. The question whether the Coronavirus epidemic will qualify as force majeure with respect to your specific agreement depends on many factors, and must therefore always be carefully analyzed on a case-by-case basis.

Important recent development with respect to the use of tracking cookies for analytics and marketing purposes on websites, further to a judgment of the European Court of Justice (ECJ) in the “Planet49” case on 1 October 2019 (case C-673/17).

Admissible practice prior to the ECJ “Planet49” judgment

Cookies are small text files that are placed on users’ devices to collect information for various purposes, such as to remember a user’s preference, to tailor shown ads and to enable website operators to analyse traffic)

Directive 2002/58/EC, as implemented in national laws of the EU Member States, governs the use of cookies and was due to be replaced by a new ePrivacy Regulation alongside the introduction of the GDPR on 25 May 2018 (ePrivacy Directive). Under the ePrivacy Directive, the placement of cookies can only be based on consent, with the notable exception of “strictly necessary” cookies.

However, no consent pursuant to the requirements of the GDPR (which must be freely given, specific, informed and unambiguous, and must result from a clear affirmative action by the user to be valid) was obtained, as consent was inferred from the silence or the implied conduct of the user (such as the further use of the website), as long as the user was informed about the use of cookies through the use of a cookie banner and a reference to a data protection notice.

Cookies were thus often installed at the time of first access to a website. Such cookies would then immediately start collecting personal data and other information.

Typical cookie banners would read “By pursuing your navigation on the website or closing this message, you agree to our use cookies in accordance with our privacy policy” or “If you continue using our website, we will assume that you are happy to receive all cookies on this website in accordance with our cookies policy”.

Why was such practice largely considered permissible?

Prior to the introduction of the GDPR, it was widely accepted that consent could be obtained through the use of a cookie banner, simply referring users to a cookie or privacy policy and informing users that continuing to use the website implies their consent to the setting of cookies.

Post GDPR, the legal situation in relation to cookies became somewhat unclear because of the fact that the ePrivacy Directive was not replaced yet.

Despite this potential uncertainty, the above practice was still considered acceptable post GDPR by a large number of EU data protection authorities. Indeed, the consent under the ePrivacy Directive was considered different and more easy to obtain than consent under the GDPR, as the implementation of the ePrivacy Directive in the various EU member states does not refer to GDPR-standard consent.

Dissenting views

The European Data Protection Board (EDPB) issued a written opinion in March 2019 addressing the interplay between the ePrivacy Directive and the GDPR. Although not specifically addressed in the EDPB’s opinion, some suggested that the EDPB’s opinion was to be interpreted as meaning that all references to “consent” in the ePrivacy Directive means consent as defined by the GDPR.

In their guidance notes issued in July 2019, the French and UK data protection authorities (the CNIL and ICO) clearly stated (i) that it is the GDPR standard of consent that must be obtained before placing cookies on users’ devices and
(ii) that users must take a clear and positive action to give their consent to cookies (and continuing to use a website does not constitute such as valid consent).

It is worth noting that, on certain aspects, such guidance documents go further than the current draft of the new ePrivacy Regulation (dd. 4 October 2019) which is due to replace the existing ePrivacy Directive (e.g. the current draft permits operators to place first or third party cookies on users’ devices without consent for “audience measuring”, i.e. to analyse traffic passing through their websites for the purpose of optimising the service).

The ECJ “Planet49” judgment of 1 October 2019

The ECJ ruled in its “Planet49” judgment that the GDPR-standard consent also applies to the setting of cookies under the ePrivacy Directive, thereby following the interpretation of the CNIL and the ICO.

Therefore, an active and informed consent is required for placing cookies and profiling technologies including advertising cookies (but not for strictly necessary cookies). Pre-ticked boxes, for example, are not a valid mean to obtain consent.

In addition, the ECJ confirmed that it does not matter whether personal data are collected through the cookies and that consent must be obtained even when the placement of cookies does not involve the processing of personal data.

The ECJ also ruled that the controller should inform users of the lifespan of each cookie and on any third parties access to information collected through such cookies, prior to obtaining their consent.

Practical implications and recommendations

While the ICO and CNIL’s guidance and the ECJ’s “Planet49” judgment may be subject to criticism, it is likely the requirement of a GDPR-standard consent will be confirmed by the future ePrivacy Regulation (with a number of exceptions for certain types of cookies).

Accordingly, a prudent approach would consist in reviewing as soon as possible existing cookies practices, including the manner in which user consent is obtained, along with existing cookie banners, cookies information notices and consent management.

Recently, the Belgian parliament adopted the Law of 4 April 2019 modifying the Belgian Code of Economic Law (“CEL”) by (i) prohibiting certain unfair, misleading and/or aggressive market practices in a B2B context, (ii) introducing a greylist and a blacklist of clauses in B2B contracts and (iii) expanding the scope of Belgian competition law to also cover abuses of economic dependence. The purpose of the legislator was to strengthen the negotiating position of smaller companies in their vertical relationships with larger companies. The Law of 4 April 2019 will however apply to all contractual B2B relationships.

(i) Misleading and/or aggressive market practices
Entry into force: 1 September 2019

Law of 4 April 2019 copies the already existing provisions in B2C contracts, and now explicitly prohibits the following practices between companies:
– misleading market practices
– aggressive market practices
– all market practices which would encourage an infringement of the CEL.

(ii) Blacklisted and greylisted clauses
Entry into force: 1 December 2020

In addition to misleading and aggressive market practices, the Law of 4 April 2019 introduces the following:
– a general unfairness test, which prohibits contractual clauses creating an obvious (legal) imbalance between the parties (not extended to essential terms of the contract);
– a blacklist, containing the following 4 clauses which will always be prohibited:
o A clause providing that party A is irrevocably bound, while the obligations of party B are subject to a condition at this party’s discretion;
o A clause granting a party the unilateral right to interpret any clause of the contract;
o A clause which, in case of a dispute, leads the other party to waive any legal recourse;
o A clause which provides, irrefutably, that a party has had knowledge of provisions which it could not actually have knowledge of before entering into the contract.
– A greylist of clauses which will be considered prohibited unless (i) it does not create an obvious imbalance, or (ii) such clause was truly desired and knowingly adopted by the parties. These clauses include, a.o., unilateral modification clauses, clauses limiting means of evidence, excessive damage clauses, etc.

For reasons of legal certainty and legitimate expectations, the provisions regarding B2B-clauses will only apply to B2B contracts which are established, renewed or modified after 1 December 2020. Therefore, the black- and greylisted clauses will not be applicable to already existing contracts, unless they are renewed or amended.

(iii) Abuse of economic dependence
Entry into force: 1 June 2020

The legislator has also created an additional category of restrictive competition practices, besides restrictive agreements and the abuse of a dominant position. Businesses will now also be prohibited from abusing a position of economic dependence of another business, by which competition on the Belgian market concerned can be affected (for example: the refusal of a sale).

Importantly, the maximum fine that the Belgian Competition Authority can impose has also been increased. The cap has been increased to 10% of the worldwide turnover of the undertaking involved. This could significantly increase fines in Belgium, given that, to date, fines were capped at 10% of Belgian turnover (including exports), which was favourable for international undertakings.