The Transport Finance Law Review: Belgium


i The transport finance industry

Transport industry

Located at the centre of the European Union and hosting its main institutions, Belgium plays a crucial role in all means of transportation.

Belgium has five international airports, among which Brussels National Airport caters for 25 million passengers and half a million tons of cargo each year.

The second largest European sea harbour is located in Belgium (Antwerp) and shipowners increasingly register ships under the Belgian flag, as it combines an attractive tonnage tax regime with a label of rigour.

The first railway on the European continent was built in Belgium and ever since rolling rail equipment has been developed and constructed in Belgium.

Finance industry

While local banks will finance equipment in inland shipping, borrowers for other means of transportation will typically rely on foreign lenders. The local legal profession is nevertheless present for the drafting and registration of Belgian instruments such as mortgage deeds, pledge on assets and revenue, assignments etc. Both the legislation and the legal profession are notably efficient to protect creditors' rights thanks to fast attachment procedures, to procedures on the merits specifically designed for undisputed claims and the swift recognition and enforcement of foreign judgments and other enforceable titles.

ii Recent changes

The new Belgian act on security interests2 providing for the registration of pledges (equivalent to mortgages) creates new opportunities for the financing of aviation and rail assets.

Legislative framework

i Domestic and international law and regulation

Conflict of laws

International conventions binding Belgium supersede domestic law.3 In the absence of an applicable international convention, the Code of International Private Law (Code IPL) determines which country's law will apply.4

Out of its own scope of application or by virtue of article 89 of the Code IPL, EC Regulation No. 593/2008 of the European Parliament and of the Council of 17 June 2008 (Rome I) shall determine the law applicable to contracts.5

Substantive law on contracts

Under Belgian law, contracts are, in general, governed by Articles 1101 to 1369 of the Civil Code. Specific provisions of the Civil Code rule a number of contracts in particular, such as:

  1. the loan agreement: Articles 1874 to 1914;
  2. the power of attorney: Articles 1984 to 2010;
  3. the bail or guarantee: Articles 2011 to 2043 octies; and
  4. the lease: Articles 1708 to 1712.

Substantive law on security interests

Aviation and rail assets

Belgium is not a party to the Convention on International Interests in Mobile Equipment, 2001, Cape Town (Cape Town Convention). The rights of creditors on aviation and rail assets are, as any other movable asset (except ships) governed by the general provisions of Title XVII on pledges and Title XVIII on liens and mortgages in Book III of the Civil Code.


The registration of ownership, of the mortgage and of the bareboat charter of ships is governed by the Act of 21 December 1990.

Belgium is a party to the International Convention on Maritime Liens and Mortgages, 1926, Brussels (1926 Convention) and incorporated the substantive provisions thereof in Book II, Code of Commerce (Code Comm). However, the proposed new Maritime Code submitted to the Chamber of Representatives provides for a denunciation of the 1926 Convention, and an adoption of the 1993 Convention.6


The aforementioned Title XVIII also governs the pledge of revenue.

ii Specific practices

Air and rail

Until 31 December 2017, mobile equipment other than ships could not be specifically mortgaged. Other security constructions were possible but not so effective, or with undesired side effects.7

The new provisions on Security Interests (the aforementioned Title XVII, Book II, Civil Code) entered into force on 1 January 2018, and now offers, subject to conditions and restrictions, a preferred right to the pledgee of any chattel, such as aviation or rail equipment, although the use and possession thereof is with the borrower, provided this pledge is registered in a public register of pledges set up to that end.8

Article 8 of the New Act on Security Interests expressly provides for the pledging of future assets, so that air and rail assets under construction or to be constructed can be pledged under the aforementioned New Act.


Claims arising out of the financing of ships are ordinarily secured with a mortgage. This applies to both existing ships and ships under construction.9

In addition to the mortgage, other instruments are a pledge on receivables, an assignment of insurance indemnities and (until 31 December 2017) a general pledge of the business, including all movable assets and receivables. Duties of the ship builder are typically secured by a performance guarantee.

The pledge of the shares of the borrowing and ship owning company could also be helpful as an addition to other security interests, as it will enable the lender to acquire control over the asset when the need thereto appears. This control may prove of little help if too late, say, once other creditors have arrested the ship for significant amounts or once insolvency proceedings are initiated.

The lease purchase is also an option, but, as long as the ship is still under lease, the financier characterises as a registered owner. As such, he or she is exposed in Belgium and other jurisdictions, to no-fault liabilities, both contractual and non-contractual.10 Once the purchase option is exercised, the financier will characterise as a seller and specific attention should be given to the risk of liabilities for hidden defects hard or impossible to waive by contract.

Financial regulation

i Regulatory capital and liquidity

The Regulation of 4 March 2014 of the National Bank11 implements Regulation (EU) No. 575/2013 in Belgium.

ii Supervisory regime

The Belgian National Bank is in charge of the prudential supervision of banks.12

Security and enforcement

i Arrest (attachment)

The term 'arrest' will be used in the meaning of a detention or restriction on removal of an asset to secure a claim.13 It does not include the seizure of such asset in execution or satisfaction of a judgment or other enforceable instrument. Arrest in such meaning is not a step, at least not a necessary step, to a judicial sale.

The arrest does not require an enforceable title. The arrest as such does not cause a priority ranking not otherwise acquired. The purpose of the arrest is not to proceed to the judicial sale, although it may so end up, but on the contrary, the release against payment or security. In practice, the arrest in Belgium, except of airplanes, proves to be an extremely fast and effective tool for the collection of receivables.


Belgium is a party to the 1933 Airplane Arrest Convention,14 which, by virtue of its Article 3, heavily restricts the creditor's ability to arrest an airplane. It should be stressed that this is the arrest as defined hereabove. This does not preclude at all the executory seizure for the purpose of a judicial sale on the basis of an enforceable title (see Section IV.iii).


A ship arrest will be authorised and maintained on the mere but serious allegation of a claim, not requiring an enforceable title. Arrest of bunkers may be an alternative to a ship arrest, if for some particular reason a ship arrest is not permissible.

Creditors have a clear preference for arresting ships in Belgium.15

The reasons are:

  1. some 15,000 calls a year at just one of its sea ports (Antwerp);
  2. by far the highest number of ships sheltering in locked docks on the European Atlantic coast, avoiding the risk of escaping while under arrest;
  3. the ability to cash or secure a claim related to the ship, regardless of whether or not the shipowner is the debtor;
  4. the ability to arrest sister ships; and
  5. the countersecurity being very seldom required.

Belgium ratified the 1952 Ship Arrest Convention16 and incorporated these provisions in the Belgian Judicial Code.17 As a result of the incorporation in domestic law, the rules as set out in the 1952 Ship Arrest Convention apply, whether or not the ship to arrest is flying the flag of a state party to the 1952 Arrest Convention.


The judge shall authorise the arrest if the applicant presents the allegation of a maritime claim. A maritime claim is a claim in the meaning of the aforementioned 1952 Arrest Convention, which includes more or less all types of claims,18 except insurance premium or calls. A judgment on the substance is not required to obtain the authorisation to arrest.

No escape route

Besides the fact that sailing while under arrest would constitute a penal fact, the arrested ships cannot, as a practical matter sail, because in most cases docks are behind locks and because she will need a pilot to reach the sea. The arrest is notified to the lockmaster and to the corporation of pilots.

To secure shipowner's or charterer's debt

To arrest a ship, it is not required that the shipowner is, on the substance, the debtor of the maritime claim to secure.19 As an example, a ship arrest will be authorised and maintained to secure a bunker claim, although it is expressly agreed only the time or bare boat charterer is held20 and not the registered shipowner.


A creditor can arrest any ship in the ownership of his or her debtor to secure his or her maritime claim.21 Courts hold that if it derives from a set of facts and circumstances that are consistent in pointing to piercing of the corporate veil between the debtor and the registered owner of another ship so that the assets of the debtor and of the registered owner of the other ship are co-mingled and form one whole, this other ship would qualify as a sister ship for arrest purposes.22


According to Article 6.1 of the 1952 Ship Arrest Convention, the judge can impose a countersecurity to be posted, but that is seldom ordered.

Wrongful arrest

The court may impose a compensation for wrongful arrest. The judge authorises the ship arrest following an ex parte application to that end. The arrestee may oppose this authorisation. The mere fact that, after hearing the arrestee, the judge lifts the arrest does not, in se, establish a liability of arrestor. Neither does the sole fact that the claim secured by a ship arrest eventually fails before the court judging the claim on its substance cause a liability for wrongful arrest. A careful inspection of the claim and a carefully drafted application do protect the arrestor against a risk of liability. A court would impose a compensation for wrongful arrest if the arrestee establishes that his or her ship was arrested for no other purpose than damaging while the arrestor knew perfectly well the arrest would be lifted by the judge when hearing the opposition of the arrestee.

Cash or security

The result of the arrest is that the ship remains detained until the claim is settled or secured by a bank guarantee. When the debtor has no good defence on the merits, the shipowner will often pay cash because when the claim is not reasonably disputable that is by far the best option (even if the charterer and not the shipowner is the debtor). The other option is the security: the ship should be released against posting security. Such security shall be so worded to secure the claim even if the shipowner is not the debtor. One way to realise the security is to obtain a judgment on the merits. For undisputed claims it is rare that the shipowner will resist as far.

Insolvency order

Insolvency orders seek to hinder the individual pursuit of claims. However, the 1952 Arrest Convention shall, in most cases, prevail over provisions prohibiting actions of individual creditors resulting from an insolvency order. To put it another way, an insolvency order will often not preclude a creditor to arrest a ship.23

Rolling rail assets

Rail assets are characterised as any other chattel for the purpose of arrest.24 The judge shall authorise the arrest thereof to secure a claim that is due, assessed or assessable and certain.25 There is no need to submit an enforceable title.

Funds and revenue

Funds and revenue may be attached, even without court authorisation,26 to secure a claim that is assessed or assessable and certain.

ii Self-help

Air and rail assets

In the event of the pledgor's serious shortcoming, the judge may, at the pledgee's demand, order the remittance of the pledged asset to the pledgee or a custodian.27 The pledgee is entitled to proceed to the sale of the pledged assets and can instruct a bailiff to do so, whether by means of a public auction or a private sale, upon prior notification to the pledgor.28 The pledgee shall not acquire the pledged assets in a private sale,29 but he or she can in a public auction, or upon the pledgor agreeing thereto.30 Indeed, the pledgor and pledgee may agree thereto in the pledge agreement, or thereafter, but such clause shall state that the value of the goods shall be determined by an expert, or, for goods traded on a market, at market rate.31 Both during and after the self-help foreclosure, any interested party may apply to the judge to solve any dispute that may arise.32


The judge of seizures and arrest of the place of the registration shall authorise the mortgagee to take possession, if a clause to that end is included in the mortgage deed and has so been registered.33 As a result of this competence and jurisdiction provision, the ability to exercise the right to take possession is restricted to ships registered in Belgium.

It is untested whether the mortgagee could, on the basis of a right to sell clause and without the consent of the owner or mortgagor, proceed to a non-judicial sale. In any event, it is as a practical matter, never an option, because it would neither lift the arrests nor free the ship of debts.

iii Judicial sale

Movable air and rail assets

Upon the pledgor's default, the pledgee is authorised to proceed to a self-help foreclosure, without the need of an enforceable title (Section IV.ii 'Air and rail assets').


The judicial sale of ships speeded up significantly over recent years as a result of the ability to very quickly obtain an enforceable title and the abolishment of the second auction.

A judicial sale of a ship shall be organised and completed upon the submission of a title enforceable in Belgium to a court bailiff and conducted in accordance with the articles 1545 to 1559 Jud. Code, which provide for the notifications to the shipowner and known creditors.

A foreign insolvency order, whether issued in an EU Member State or not, shall not hinder the judicial sale.34

A mortgage deed bearing the order to enforce, an enforceable domestic payment order, an enforceable EU order for payment, an enforceable judgment or an enforceable arbitration award are enforceable titles.

If such titles are originating from a Belgian authority,35 then they will allow the court bailiff to proceed immediately with the executory seizure leading to the judicial sale. Hereafter we deal with enforceable titles not originating from a Belgian authority.

EU Member State

If not originating from a Belgian authority but from an authority of another EU Member State, then the judicial title will be enforceable in Belgium as an enforceable judgment rendered by a Belgian court, without the need of a court declaration of enforceability.36 The court bailiff shall also proceed to the executory seizure and subsequent judicial sale upon the submission by the claimant of documents listed in Article 42.1. Among which are the certificate according to the form as in Annex I for decisions and Annex II for deeds and settlements to the Regulation Brussels I Recast. Prior to relying on a mortgage deed, one should check whether an Annex II certificate can be obtained.

Switzerland, Norway, Iceland, Singapore, Mexico and Montenegro

If the title originates from Switzerland, Norway or Iceland, then the enforcement thereof will be governed by the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, signed in Lugano on 30 October 2007. Its effects are materially the same as the (old) Brussels I Regulation of 2000.

If the judgment was rendered by a Court of Singapore, Mexico or Montenegro, then the enforceability of the judgments shall be governed by the 2005 Convention on Choice of Court Agreements,37 which provides for a swift exequatur without review on the merits, and provides for a restriction of grounds for refusal of enforceability.

All other

According to article 22, Section 1, Code IPL, a foreign judgment, which is enforceable in the country where it was rendered, shall be declared enforceable in Belgium by a Belgian Court of First Instance judging upon an ex parte application38 to that end.39

The Court shall not review the matter on the merits40 and the court can only refuse the enforceability on restricted grounds provided for in Article 25, Section 1, Code IPL.

Article 27, Code IPL provides for a simple and straightforward exequatur of non-judicial enforceable titles, such as mortgage deeds.

'No deal' Brexit 41

At the time of writing, the UK is scheduled to leave the EU on 29 March 2019 without a deal, so that the rejected deal, which included provisions in respect of the enforceability of judgments, is not material for the time being.

The 'no deal' Brexit will cause the Brussels I Recast Regulation of 2012 to become ineffective for the enforcement of UK judgments in the EU.

If there is no convention instead of the Regulation Brussels I Recast, a limited court intervention will be required, and restricted grounds for refusal will apply as provided for either by the 1934 bilateral Convention for the Reciprocal Enforcement of Judgments between Belgium and the UK,42 or the 2005 The Hague Convention on Choice of Court Agreements,43 or the Belgian Code IPL.44 It will bring back a system rather comparable to the earlier Brussels I Regulation of 2000.45

Arbitration awards

The exequatur of arbitration awards is governed by Articles 1719 to 1722 of the Jud. Code without prejudice to the 1958 New York Convention46 and other Conventions.47

Current developments

There is a strong political will to improve the law to meet as closely as possible the enforcement needs of contracting businesses in general, and of the financing and transport industry in particular. A set of significant judicial reforms seek easier and faster litigation. A reform of contract and corporate law in general and of security interests seeks to favour business development and increase security. A new maritime code now submitted to parliament is about to modernise maritime law.

Insolvency orders shall not preclude the creditors holding security rights and other rights in rem (mortgages, pledges, liens, etc.).48

With the introduction of the new Title XVII on security interests Book II, Civil Code, the Belgian legislator has clearly demonstrated the will to improve financing facilities and security, and it is likely that this is only the beginning.

The present legislature has adopted a significant amount of amendments to the Jud. C. for the purpose of speeding up proceedings. For example:

  1. the judgment of the first judge is enforceable unless otherwise decided and reasoned. This reverses the previous system;
  2. a default judgment is no longer open to rehearing; and
  3. the new Article 806, Jud. C. restricts the scrutiny of the judge when a party defaults to appear. The judge shall not seek to look at potential defences of the defaulting party, other than public policy and rules of law to be raised ex officio by the court.

ii Trends and outlook for the future

If it comes to the ratification of the 1993 Maritime Liens and Mortgage Convention, as is not unlikely to occur in the near future, the number of liens superseding the mortgage will decrease and therefore, if applicable, the ship mortgagee will improve his or her position in the event of a foreclosure in Belgium.

The recent introduction of the creditor's ability of public registration of his or her security rights in chattel,49 such as aviation and rail assets, is a very significant move forward and worth knowing and being considered by those working out financing schemes.

It is not unlikely that the registration of security rights will be further expanded to rights such as lease purchase contracts, but it is too early to make estimates in that respect.


1 Benoît Goemans is the founding partner of Goemans, De Scheemaecker & De Wit (GDS Advocaten). The information in this chapter was accurate as at April 2019.

2 The Act of 11 July 2013 (Moniteur belge 2 August 2013), which entered into force on 1 January 2018 (following an amendment by Act of 25 December 2016, Moniteur belge 30 December 2016) has replaced Title XVII of Book II, Belgian Civil Code. See also and B. Goemans, 'Les nouvelles dispositions légales belges sur les sûretés mobilières', Droit Maritime Français, No. 809, January 2019, page 67.

3 Article 2, Code of International Private Law (Code IPL), Act 16 July 2004, Belgian official journal, 27 July 2004.

4 Article 2, Code IPL.

5 Both as within the scope of application of this Regulation and by virtue of Article 98 of the Code of International Private Law.

6 International Convention on Maritime Liens and Mortgages, Geneva, 6 May 1993.

7 By contrast it was possible to record a pledge on the entire business, including all movable assets, which is still possible. Also, it was customary, until 31 December 2017, in the absence of a pledge register on particular assets, to structure the financing of the mobile equipment through the mechanism of the preferred right of the unpaid seller. This mechanism required the lender to be characterised as the seller, creating issues in respect of the warrantee for hidden defects provided for by imperative statutory provisions that could not be contracted out. The other option is the lease purchase agreement. It is possible to contract out to a large extent the liability of the lessor towards the lessee. However, some jurisdictions may provide for faultless liability of the owner, which is the status of the financier during the lease. Upon the lessee exercising the purchase option, the lessor becomes a seller. The law is severe for the seller's duty to hold the purchaser harmless for hidden defects and it is difficult, if at all possible, to contract this out.

8 See also and also B. Goemans, 'Les nouvelles dispositions légales belges sur les sûretés mobilières', Droit Maritime Français, No. 809, January 2019, page 67.

9 Article 14, 1° Royal Decree 4 April 1996 and Article 8 Maritime Code.

10 Article 46, Section 2 Maritime Code.

11 Approved by Royal Decree of 10 April 2014, Official Journal 15 May 2014.

12 Article 36/2, Section 1, Act of 22 February 1998.

13 Also see the definition, in Article 1.2, International Convention for the Unification of Certain Rules relating to the Arrest of Sea-Going Ships, Brussels, 10 May 1952 (Ship Arrest Convention).

14 International Convention for the unification of certain rules in respect of the arrest of airplanes, 29 May 1993 (1933 Airplane Arrest Convention).

16 International Convention for the Unification of Certain Rules relating to the Arrest of Sea-Going Ships, Brussels, 10 May 1952, (1952 Arrest Convention).

17 Articles 1467 to 1469.

18 According to Article 1.1° of the 1952 Ship Arrest Convention and Article 1468 Belgian Judicial Code a ship can be arrested to secure claims arising out of: (1) collision; (2) loss of life or personal injury; (3) salvage; (4) 'agreement relating to the use or hire of any ship whether by charter party or otherwise'; (5) carriage of goods; (6) loss or damage to goods; (7) general average; (8) bottomry; (9) towage; (10) pilotage; (11) goods or materials supplied to a ship for her operation or maintenance; (12) construction, repair or equipment of any ship or deck or dock charges and dues; (13) wages of masters, officers, or crew; (14) master's disbursements, including disbursements made by shippers, charterers or agents on behalf of a ship or her owner; (15) disputes as to title to or ownership; (16) disputes between co-owners of any ship as to the ownership, possession employment or earnings of that ship; and (17) the mortgage or hypothecation of that ship.

19 Cour de Cassation, 10 May 1976, Omala, Arr. Cass., 1976, 1008, Pas., 1976, I, 969 ; Cour de Cassation, 1 October 1993, Heinrich J, J.P.A., 1994, 132 (also see next footnote); Cour de Cassation, 23 May 2003, 'Atlantic Island',

20 Cour de Cassation, 1 October 1993, Heinrich J, JPA, 1994, 132, Cour de Cassation, 1 October 1993, RW, 1983, 1994, 357. In Heinrich J, the bunker order was rubberstamped with the express mention that the bunker order was placed by the time charter not binding the registered owner. Belgium's highest court decided that such circumstance did not affect the right to arrest the Heinrich J, ultimately causing the registered owner to pay for the charterer's debt.

21 Article 3,1 1952 Arrest Convention, Article 1469, Section 1, Belgian Judicial Code (Jud. C.).

22 Zie rspraak in AG.

23 Judge of Seizures and Arrests of Ghent, 7 July 2009 in the matter of the arrest of the M/T Pretty Flourish.

24 The articles 1413 to 1422 Jud. C. govern the arrest in general, and articles 1422 to 1427 Jud. C. are specific to the arrest of chattel.

25 Article 1415, Jud. C.

26 Article 1445.

27 Article 22, New Act on Security Interests.

28 Article 48, New Act on Security Interests.

29 Article 52, New Act on Security Interests.

30 Article 53, New Act on Security Interests.

31 Article 53, New Act on Security Interests.

32 Articles 54 and 56, New Act on Security Interests.

33 Act of 4 September 1908.

34 Article 5, Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings, OJ L 160, 30 June 2000 and Code of International Private Law, Act of 16 July 2004, Mon. b. 27 July 2004 (Code IPL), Article 121. See also

35 The term 'authority' is not restricted to a court or judge, it also includes the notary and the magistrate in the meaning of Article 1394/24 Jud. C.

36 Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Recast Regulation). The defendant may apply to the court to hear the refusal of the enforceability on a restricted number of grounds. The defendant may apply to the court to hear the refusal of the enforceability on a restricted number of grounds.

37 Convention on Choice of Court Agreements, The Hague, 30 June 2005, ratified by the EU, Denmark, Mexico, Montenegro and Singapore. This convention was also signed, but not (yet) ratified, by China, Ukraine and the USA.

38 The applicant shall, along with his or her application, only submit: (1) the judgment enforcement of which is sought; (2) if the judgment is a default judgment, then the proof of service to the non-appearing party; and (3) a document showing the judgment is enforceable and notified or served.

39 Articles 1025 to 1034 Jud. Code referred to by Article 23, Code IPL.

40 Article 25, Section 2, Code IPL.

41 For a more detailed discussion, see

42 Convention for the Reciprocal Enforcement of Judgments, Brussels, 2 May 1934, superseded by Brussels I Regulation (Recast), by virtue of its Article 69.

43 Convention on Choice of Court Agreements, The Hague, 30 June 2005.

44 By virtue of its Article 2, both EU law and international conventions overrule the Code IPL. By virtue of Article 25, Section 2, Code IPL, the court shall not review the merits of the case. Article 25, Section 1, Code IPL restricts the basis for refusal to make the foreign judgment enforceable to nine grounds.

45 Regulation (EC) No. 44/2001 of the Council of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, known as Brussels I Regulation.

46 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958.

47 Such as with France, in Paris on 8 July 1899; with The Netherlands, in Brussels on 28 March 1925; with Switzerland, in Bern on 29 April 1959; with Austria, in Geneva on 11 June 1953 and Protocol on Arbitration Clauses at Geneva on 24 September 1923, and at Vienna on 16 June 1959, with Germany, in Bonn on 29 and 30 March 1954 reinstating the Protocol from Geneva on 24 September 1923 and the Convention in Geneva on 26 September 1927.

49 New Title XVII Civil Code.

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