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.