Benteler v Belgian State [1984] 1 JIA 184

A protocol between the Belgian State on one part, Benteler from Germany as a 2nd part, and the company ABC s.a as a 3rd part, signed in Brussels relating to the industrial and financial restructuring of ABC. The protocol contained an arbitration clause for disputes between the State and Benteler, to decide a case ex aequo et bono. After a major dispute Benteler initiate arbitration proceedings, invoking the European convention of 1961 to which Belgium and Germany were parts.

Belgium argued against the validity of the arbitration clause since it was prevented for the Code Judiciare from submitting to arbitration Belgium contended that its intervention in the restructuring of the steel industry and in particular that of ABC was not a commercial operation, but an operation of political character, demanded by public interest and based on legislation. Tribunal: notwithstanding its political justification, Belgium concluded a Protocol giving rise to private law rights. Arbitrators held that Belgium could validly enter an arbitration agreement in order to settle disputes arising out of ‘international commercial operations’ under the meaning of European Convention on International Commercial Arbitration of 1961