Enforcement of Judgments 2023 Comparisons

In principle, Luxembourg law does not provide for any means to identify another party’s asset position. Freezing orders and asset disclosure orders, in particular, are not publicly available information. However, certain remedies exist in order for a creditor to obtain useful information.

Disclosure of Account Information

Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters provides for a mechanism allowing a creditor who seeks to obtain an account preservation order to request that the debtor’s account information shall be disclosed by the court. However, such disclosure may only be requested where a creditor has already obtained an enforceable judgment in a member state.

European account preservation orders shall prevent the subsequent enforcement of the creditor’s claim being put in jeopardy – eg, through the transfer or withdrawal of funds up to the amount specified in the preservation order.

Public Registers

All Luxembourg companies are required by law to publish their balance sheets annually on the Luxembourg Business Register, which is publicly available. It is thus possible to obtain insight into the financial health of Luxembourg-based companies. Furthermore, the Luxembourg Register of Beneficial Owners discloses the identity of the ultimate beneficial owner of each company, with certain exceptions.

Obtaining Information for Future Litigation

The Luxembourg New Code of Civil Procedure also provides for certain means enabling a party to future court proceedings to request the disclosure of certain information via summary or ex parte proceedings. In fact, the law provides that if there is a legitimate reason to establish – before any proceedings on the merits – proof of facts on which the solution of a future dispute may depend, legally admissible measures may be ordered at the request of any interested party, by means of an ex parte request or summons initiating summary proceedings. This procedure is commonly referred to as référé probatoire, which are summary proceedings for the presentation or establishment of the evidence of factual elements.

This provision does not define the type of information that may be disclosed, so it cannot be excluded that the asset position of another party may be requested by means of a référé probatoire if such information is relevant for a future dispute.

However, this is not a “pre-trial discovery”, as the information and/or documents for which disclosure is requested must be clearly identified by the applicant. The référé probatoire also does not enable a claimant to launch a “fishing expedition” into the defendant’s documentation.

Judgments rendered by the Luxembourg courts vary in accordance with the procedure that has been initiated and the amounts in dispute.

Judgments Given in Default of Appearance (Jugements par Défaut)

Where a defendant does not appear but the document initiating the proceedings (eg, summons) has been served on the defendant in person, the judgment is deemed to be contradictory.

However, if the summons has not been served on the defendant in person (eg, the summons has been served at the defendant’s residence), the judgment is rendered in default of appearance. Judgments given in default of appearance give rise to an additional means of redress: an opposition. An opposition allows the defaulting party to challenge all the points that have been judged by default, within a limited period of time, before the same judge. A new inter partes judgment will be handed down.

Interlocutory Judgments (Jugements Avant Dire Droit)

These are non-final judgments, either because they contain provisions that both decide on the merits and order a measure intended to prepare future debates (eg, an expert opinion), or because they do not contain any provisions deciding on the merits.

Final Judgments and Judgments Subject to Appeal (Jugements Rendus en Dernier Ressort et Jugement Appelables)

In principle, any judgment may be appealed unless otherwise provided for by law.

By way of example, according to the New Code of Civil Procedure, in civil and commercial matters, disputes arising to the amount of EUR2,000 are not subject to appeal.

Injunctive and Interim Relief (Ordonnances de Référé)

In cases of urgency, manifestly unlawful disturbance or risk of loss of evidence, interim relief orders may be rendered by a court sitting in summary matters. These are interim judgments that never decide on the substance of a case.

Notarial Deeds

Notarial deeds (ie, authentic acts issued by a notary public) are of great importance as they very often recognise or establish a right (eg, a property right) that could be the subject of future proceedings.

Acknowledgements of Debt (Reconnaissance de Dette)

Luxembourg law also attaches importance to acknowledgements of debt, which are unilateral acts by which one person acknowledges being indebted to another person for a certain amount of money.

In a non-insolvency context, various collection proceedings of unsecured debts may enable a creditor to recover their claim. The most commonly used procedures include the following.

Third-Party Attachments (Saisie-Arrêt)

This procedure enables a creditor to freeze any sums or assets that are in the hands of a third party and owed to the debtor. A creditor may initiate an attachment without leave of the court if they hold a valid title against the debtor (eg, a foreign money judgment). Attachments may, in principle, only be initiated if the claim is certain, liquid and payable.

Upon service of the attachment by a bailiff, the third party must no longer remit any funds or assets to the defendant. In order to initiate the second phase of the attachment (the enforcement phase), the creditor must obtain an enforceable money judgment against the debtor. This can be achieved by the granting of an exequatur to an arbitral award yet to be rendered, in which case, as a matter of practice, the saisie-arrêt proceedings would be suspended pending the outcome of the exequatur proceedings.

The validation judgment orders the third party to pay all assets to the claimant. As soon as the validation of the attachment has the force of res judicata, the third party needs to transfer all monies attached to the creditor. The judgment may also be declared provisionally enforceable in certain circumstances.

Conditional Order for Payment (Ordonnance Conditionnelle de Paiement)

The conditional order for payment is a cost-saving and simplified procedure permitting a Luxembourg resident to bring an action for recovery of their claim not exceeding EUR10,000.

Order for Payment Issued Upon an Ex Parte Application (Provision sur Requête)

This procedure permits a creditor to recover a claim exceeding EUR10,000 that cannot be seriously disputed. The order for payment is issued on an ex parte basis and the debtor must be a Luxembourg resident.

Forced Sale of Tangible Assets (Saisie-Exécution)

This procedure is carried out by a bailiff and enables a creditor to be paid out of the sale price of the debtor’s attached assets. Only tangible movable properties may be subject to a saisie-exécution.

Seizure of Immovable Property/Foreclosure (Saisie-Immobilière)

Foreclosure leads to the public auctioning of the defendant’s real estate.

Periodic Penalty Payments (Astreinte)

To ensure the enforcement of a decision by the losing party, a creditor may request in court that the decision be accompanied by periodic penalty payments. Periodic penalty payments cannot be ordered when a judgment is purely for the payment of money, but they are particularly effective in cases of affirmative obligations and negative obligations.

Other remedies available to a claimant may be the provisional appointment of a receiver for disputed assets, a European Order for Payment or the European Small Claims Procedure.

Costs

Enforcement of a domestic judgment generates both lawyer fees and procedural costs, but the amount of the fees incurred depends on the procedure at hand. Whereas each party must bear its own lawyers’ fees, it is possible to seek a procedural indemnity in court. The latter is granted if the court finds that it would be inequitable for the winning party to bear all the costs.

However, in principle, a procedural indemnity never amounts to all the lawyer fees and legal costs that have been generated by the court proceedings.

Upon rendering the judgment, the court generally decides that the losing party must bear all the legal costs. In certain circumstances, the court may also decide that the parties must share the costs. Procedural costs notably include:

• bailiff costs, including for the service of judgments necessary to render said judgments enforceable;
• costs generated by measures of inquiry ordered by a court, such as an expert report if the judge requires clarification on one or more technical issues; and
• barristers’ fees (émoluments), which amount to approximately 0.1% of the amount in dispute.

Some collection proceedings generate fewer costs than others. In principle, third-party attachments may be very efficient in practice, but can also incur considerable costs as they very often incur parallel court proceedings.

Conditional orders for payment, however, generate lower costs, as the legislature has implemented a cost-saving procedure for claims considered to be small.

Time

The time required to enforce a domestic judgment depends on the eagerness of the debtor to resist. If the debtor pays its debt or performs its obligations as ordered by the judgment, no collection proceedings need to be initiated by the creditor after service of the judgment.

However, where this is not the case, the various collection proceedings mentioned above may take several weeks or months.

Third-party attachments (see 2.2 Enforcement of Domestic Judgments) initiate a post-judgment procedure by which the attached third party (eg, a bank) makes a notification to the claimant about the substance of the assets attached (eg, the amounts held on a bank account, or the number of shares registered in the name of the defendant).

This notification, issued after the validation judgment, is called the déclaration affirmative and gives the claimant a precise indication of the debtor’s assets held with the attached third party. It may give rise to contention between the claimant and the third party.

Absence of Service

A judgment may only be enforced if it has been served on the losing party by a bailiff. Enforcement may thus be challenged by a defendant if no such service took place.

Recourse Against Penalty Payments

If a defendant is permanently or temporarily unable, in whole or in part, to comply with the sentence on the merits, the judge who ordered penalty payments may order its cancellation upon the defendant’s ex parte request. The idea is that it would be unjust to continue to apply periodic penalty payments if the defendant can no longer comply with the main sentence.

Objection to Formal Notice to Pay (Opposition à Commandement)

If a claimant holds an enforceable title (eg, an enforceable judgment), they may serve the defendant with a formal notice to pay as a means to enforce the judgment. Formal notices to pay also constitute necessary preambles for the performance of the forced sale of movable assets (saisie-exécution).

The defendant may challenge the notice if:

• it contains a formal irregularity; or
• the creditor’s claim is already extinguished (eg, the debtor has paid their debt – a set off).

Absence of an Effective Title to Perform a Third-Party Attachment

The Luxembourg courts have recently had the opportunity to express their views on the effects over time (actualité) of an enforceable title. In a 2018 decision, a Luxembourg court decided that it may be possible that an attachment was initially carried out on the basis of a title which is no longer effective because of the occurrence of new facts such as the extinction of the obligation established in the title (by payment, netting or novation), or even the effects of a new law.

Therefore, a judgment may lose its force in the course of successive events that bring to light elements which establish that the judgment has been satisfied.

Declaratory Actions

A judgment can only be enforced if it carries an actual order on the defendant to pay or an order for specific performance. Therefore, declaratory actions will not give rise to a judgment that may be enforced against the losing party, as these actions merely intend to have something found or confirmed by the court, such as a certain interpretation of a contract or a purely factual circumstance. For instance, a party could seek the court’s confirmation that no wrongdoing has been committed in order to prevent a potential tort claim.

Interlocutory Judgments

Interlocutory judgments are non-final decisions and therefore may not be enforced.

Exercise of Appeal or Opposition

A judgment may not be enforced if an appeal or an opposition has been filed by the defendant (with certain exceptions such as an immediate enforcement notwithstanding appeal, called exécution sur minute). These means of redress have a suspensive effect so, a creditor is no longer authorised to initiate or pursue enforcement measures. However, they may take conservatory measures to ensure a future enforcement by means of a preventative attachment (saisie-conservatoire), which enables the creditor to freeze the assets of the debtor. Therefore, when a court of appeal confirms the first-instance judgment by confirming the creditor’s claim, the creditor may enforce on the frozen assets.

There is no central register containing civil and commercial judgments.

However, with certain exceptions, Luxembourg case law is available on the website justice.public.lu. Judgments are generally anonymised, with only the names of the lawyers appearing publicly. With the exception of the parties’ names, the judgments are not otherwise altered or redacted.

A debtor may not request a judgment to be removed from this platform, even if they have paid their debts.

Possible Legal Issues

The enforcement of a foreign judgment in Luxembourg depends on the country of origin of the judgment.

Once a foreign court decision has been rendered enforceable in Luxembourg, the creditor may initiate several collection procedures to recover their claim with the Luxembourg-based assets of the debtor. Third-party attachments are frequently initiated in that context and cause the debtor’s assets to be frozen. The debtor may therefore initiate court proceedings to get the attachment order lifted by the court.

Applicable Provisions

EU judgments

The enforcement of a judgment rendered by a member state of the European Union is regulated by 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 (“Recast Regulation”).

As the United Kingdom is no longer a member of the European Union, all judgments rendered by UK courts referring to court proceedings initiated after 31 December 2021 are no longer subject to the Recast Regulation. UK judgments are therefore enforced either according to national procedural law, or according to international conventions to which both the UK and Luxembourg are contracting states.

The Lugano Convention on jurisdiction and enforcement of judgments in civil and commercial matters of 16 September 1988 contains provisions that are very similar to the Recast Regulation, but applies to European states that are not member states of the European Union, such as Switzerland and Norway.

Non-EU judgments

Luxembourg is a contracting state to the Hague Convention of 30 June 2005 on Choice of Court Agreements (the “Choice of Court Convention”), which provides for certain applicable rules regarding the enforcement of a foreign judgment if the agreement matter of the dispute contains a jurisdiction clause giving exclusive jurisdiction to one of the contracting parties.

Other contracting states include China and the United States of America. Recognition and enforcement of judgments under this convention shall take place without a review of the merits of the judgment rendered by the court of origin, provided that the judgment is also enforceable in the state of origin.

As the UK is also a contracting party, the Choice of Court Convention may be useful for the enforcement of UK judgments in Luxembourg.

Domestic law (the New Code of Civil Procedure)

If no bilateral agreement between Luxembourg and a third country is in place, the enforcement of foreign judgments in Luxembourg will be subject to national law and, more specifically, the New Code of Civil Procedure. A judgment creditor who seeks to enforce such a judgment needs to initiate legal proceedings by way of submitting a writ of summons (assignation) to the Civil Chamber of the District Court (Tribunal d’arrondissement siégeant en matière civile).

When deciding on the enforcement of a foreign judgment, Luxembourg courts will apply the relevant international conventions or treaties. However, their approach does not fundamentally differ based on the type of judgment for which enforcement is sought.

Depending on the applicable instrument (Recast Regulation, international convention or domestic law), the judges intervene at different moments in time. If the Recast Regulation is applicable, the court never intervenes to grant enforcement, but may be called to render a decision to refuse enforcement once the EU judgment has already been served on the defendant and said defendant seeks to challenge the enforcement. However, if the Recast Regulation is not applicable, the court is seized to grant enforcement of a foreign judgment.

Violations of Luxembourg Public Policy

Foreign judgments

Regardless of whether the enforcement of a foreign judgment is sought on the basis of an international convention or domestic law, the courts will not grant enforcement if:

• the foreign procedure or decision has violated the rights of defence and due process norms;
• the foreign decision contravenes Luxembourg public policy; or
• the foreign decision has been rendered subsequent to an evasion of Luxembourg law (fraude à la loi).

This is a non-exhaustive list, and the court may refuse the exequatur on other grounds.

EU judgments

A judgment rendered in a member state which is enforceable in that member state shall be enforceable in any other member state without any declaration of enforceability being required.

However, a defendant may challenge the enforcement by applying for the refusal of enforcement once they have been served with the certificate provided for by the Recast Regulation and the judgment itself. If the defendant succeeds in demonstrating the grounds of refusal provided for by the Recast Regulation (eg, violation of public policy), enforcement may be refused by the Luxembourg court.

Certain Types of Foreign Judgments Will Not Be Enforced

A Luxembourg court will not render a foreign judgment enforceable if it is not enforceable in its country of origin.

Exequatur judgments issued by UK courts may contain an order for payment. Such judgment cannot be enforced in Luxembourg on the basis of the principle that an exequatur judgment cannot be the object of a further exequatur (exequatur sur exequatur ne vaut).

Under the Recast Regulation, a judgment rendered in a member state ordering a provisional measure, including a protective measure, will be enforced in another member state if certain criteria are met. In particular, where a measure has been ordered by the court of another member state without the defendant being summoned to appear in court, proof of service of the judgment must be provided in order for the judgment to be enforceable in Luxembourg.

Stay of Proceedings

If the enforcement of a foreign judgment is sought on the basis of an international convention, the New Code of Civil Procedure states that the Luxembourg Court of Appeal may order a stay of proceedings if the foreign judgment has been subject to an appeal in the state of origin. The foreign judgment will thus not be enforced as long as the stay of proceedings has not been lifted by the Luxembourg court.

As stated in 2. Domestic Judgments and 3. Foreign Judgments, the procedure applied by the Luxembourg courts to enforce a judgment depends on the underlying applicable legal provisions: the Recast Regulation, international conventions or domestic law.

The Recast Regulation

Where the Recast Regulation applies, judgments are not subject to an enforcement procedure as such. The enforcement is meant to be automatic and is not subject to a declaration of enforceability. A judgment that is enforceable in one member state shall be enforceable in any other member state according to the same conditions as domestic judgments.

In order to render the EU judgment enforceable in another member state, the claimant has to serve certain documents on the Luxembourg-based defendant, including:

• a copy of the judgment in question; and
• the certificate provided for by the Recast Regulation certifying that the judgment is enforceable.

Therefore, the claimant does not have to seek enforcement by means of judicial proceedings, but the judge may be called to intervene if the defendant challenges the enforcement.

Enforcement of a Foreign (Non-EU) Judgment in Luxembourg

Where Luxembourg has signed an international convention with the country of origin of the judgment, the enforcement requirements are determined by that convention. However, where an international convention not explicitly referred to by the New Code of Civil Procedure is applicable, it is not clear whether enforcement of a foreign judgment should be sought by means of an ex parte request or summons served by a bailiff.

The procedure laid out by the Choice of Court Convention provides for certain basic rules. For instance, a judgment shall be recognised and enforced only if it is enforceable in the country of origin. No review of the merits of the judgment is allowed, and the court shall be bound by the findings of fact of the court of origin.

Enforcement Proceedings According to the New Code of Civil Procedure

Where neither the Recast Regulation nor any other international convention applies, a judgment creditor needs to seek enforcement according to the provisions of domestic law. The granting of an exequatur (judicial declaration of enforcement) by the District Court is subject to the following requirements:

• the foreign court order must be enforceable in the country of origin;
• the court of origin must have had jurisdiction according both to its own domestic laws and to the Luxembourg conflict of jurisdiction rules;
• there must be regularity of the procedural rules in light of the laws of the country of origin;
• the foreign procedure and decision must not have violated the rights of defence and due process norms;
• the foreign court must have applied the law designated by the Luxembourg conflict of laws rules, or, at least, the order must not contravene the principles underlying these rules;
• the considerations of the foreign order as well as the judgment as such must not contravene Luxembourg international public order; and
• the foreign order must not have been rendered subsequent to an evasion of Luxembourg law (fraude à la loi).

The judgment creditor needs to initiate legal proceedings by way of summons. It is also necessary to submit an authenticated, translated copy of the foreign judgment in combination with a declaration that the foreign judgment is enforceable in the country of origin.

Costs

Lawyers' costs and legal costs must be distinguished. In particular, the amount of the lawyers' costs depends, inter alia, on the complexity of the case, the time spent and the outcome of the case.

Where the Recast Regulation is applicable, and provided that the enforcement is not challenged by the defendant, the costs incurred should remain relatively low as no judicial proceedings take place. However, in order to seek the enforcement of a foreign judgment according to domestic law or an international convention, judicial proceedings are necessary and generate higher costs.

Time

The Recast Regulation

The procedure provided for by the Recast Regulation is intended to be rapid. In practice, the certificate provided for by the Recast Regulation is completed by the country of origin.

As the enforcement of the EU judgment requires only service of the judgment and the standard certificate, this procedure is immediate upon service.

Exequatur proceedings: domestic law and international conventions

In the context of exequatur proceedings, proceedings before the Luxembourg courts are initiated either via ex parte request (in general, where an international convention is applicable) or via summons (where domestic law applies).

• Ex parte request: this procedure does not include, at the first stage, an adversarial debate. A decision is generally rendered quickly – more or less after one week. The defendant may appeal the decision within one month from service if the defendant is resident in Luxembourg and two months if not. An appeal may take between one and two years.
• Summons: if the claimant has to serve a summons on the defendant in order to request enforcement of the foreign decision, an adversarial debate takes place and a judgment is rendered less quickly. The first-instance proceedings may take up to two years, and appeal proceedings may take another one to two years.

Foreign judgments

The law expressly provides that it is always possible to appeal a judgment that has granted enforcement to a foreign judgment. The decision of the court of appeal may also be appealed in cassation.

In particular, the defendant may demonstrate that the necessary requirements for enforcement are not met.

EU judgments

If the Recast Regulation is applicable, enforcement of the EU judgment will not have to be sought in court. However, the defendant on whom the certificate provided for by the Recast Regulation has been served may challenge the enforcement before the President of the Luxembourg District Court sitting in summary proceedings.

If the latter rules that the EU judgment must be enforced in Luxembourg, the losing party may file an appeal against this decision. The decision to be rendered by the court of appeal may also be appealed (for exclusively legal reasons) in cassation – ie, the defendant has the possibility to challenge enforcement in three instances.

Under Luxembourg law, the enforcement of arbitral awards depends on whether the award at hand is rendered in Luxembourg or abroad.

Although the New Code of Civil Procedure contains a set of provisions defining the enforcement procedure of arbitral awards, these internal provisions do not apply whenever a convention relating to the enforcement of arbitral awards, which has been ratified by Luxembourg, is applicable.

It is worth noting that the Luxembourg law on arbitration has been recently reformed and modernised by the Law of 19 April 2023, which entered into force on 25 April 2023, with the objective of facilitating the recourse to arbitration and accelerating the enforcement process. It aims to implement one coherent regime to adapt Luxembourg arbitration law to the realities of international arbitration.

The New Code of Civil Procedure as amended applies to arbitration agreements entered into after the entry into force of the Law of 19 April 2023 (unless otherwise agreed), and is also applicable to arbitral tribunals constituted after its entry into force. The Law of 19 April 2023 further applies to arbitral awards rendered after its entry into force.

Foreign Arbitral Awards

The enforcement of foreign arbitral awards is predominantly governed by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards dated 10 June 1958 (the “New York Convention”), as this is applicable whenever an award of another contracting state is concerned.

In addition to the New York Convention, Luxembourg has ratified a range of other conventions, all of which are applicable in expressly specified circumstances, such as:

• the European Convention on International Commercial Arbitration of 21 April 1961;
• the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) of 18 March 1965; and
• the Convention on Conciliation and Arbitration within the OSCE of 15 December 1992.

If none of the ratified conventions is applicable, the enforcement of a foreign arbitral award in Luxembourg is governed by the national rules set out in the New Code of Civil Procedure.

Domestic Arbitral Awards

The enforcement of domestic arbitral awards is exclusively governed by the provisions of the New Code of Civil Procedure, which sets out the steps to be followed in order to make an arbitral award enforceable.

The rules governing the enforcement change according to the origin of the arbitral award.

Different categories of foreign arbitral awards have been denied exequatur in Luxembourg over the course of time.

Luxembourg courts used to grant enforcement to arbitral awards that have already been nullified in their country of origin. However, in order for an arbitral award to be granted enforcement by a Luxembourg court today, the award must be enforceable in its country of origin. If annulment proceedings have been initiated against the arbitral award in its country of origin, it is very likely that the Luxembourg courts will order a stay of proceedings regarding the enforcement proceedings in Luxembourg (Luxembourg Court of Appeal, 25 June 2015).

Luxembourg law contains different procedures when it comes to enforcing either a foreign or a domestic arbitral award under its jurisdiction. However, in any case, the enforcement of an award that is not voluntarily executed by the parties must be initiated by an application to the President of the District Court.

Enforcement of Foreign Arbitral Awards

For the enforcement of an arbitral award rendered abroad, the exequatur proceedings set out in Article 1245 of the New Code of Civil Procedure must be followed, pursuant to which the exequatur of a foreign arbitral award is granted by the President of the District Court seized by way of an ex parte petition.

The petition is brought before the President of the District Court where the party against whom enforcement is sought has their domicile or residence. If the party has neither domicile nor residence in Luxembourg, the petition is filed before the President of the District Court of the place where the award must be executed.

The petitioner must elect a domicile in the district of the court seized and enclose with their request the original versions of the arbitral award and the arbitration agreement, or authentic copies thereof.

In addition to these rules, Article 1246 of the New Code of Civil Procedure expressly highlights that when an award has been rendered according to an international convention on the recognition and enforcement of foreign arbitral awards, the rules contained therein apply to all other aspects of the enforcement proceedings.

In principle, the President of the District Court renders a decision within a few days after the filing of the request. The decision will be notified by the court clerk to the Luxembourg lawyer of the applicant.

Enforcement of Domestic Arbitral Awards

Unlike the procedure for foreign arbitral awards, the enforcement procedure for domestic arbitral awards is exclusively governed by the New Code of Civil Procedure, pursuant to Article 1233 of which a domestic arbitral award is rendered enforceable by an order of the President of the District Court in whose jurisdiction it was rendered. Enforcement is sought either by one of the arbitrators or by one of the parties to the dispute via ex parte petition. The original version of the arbitral award must be filed with the court.

If the enforcement of the domestic arbitral award is not granted, the claimant may appeal the court order rendered within one month of the refusal. However, if the enforcement of the domestic arbitral award is granted, the defendant may only hinder the enforcement by seeking annulment of the award within one month. Enforcement of the domestic arbitral award may be refused if the arbitral award is manifestly affected by one of the grounds for annulment mentioned in Article 1238 of the New Code of Civil Procedure (see 4.6 Challenging Enforcement of Arbitral Awards).

Costs

Seeking the enforcement of an arbitral award creates lawyers’ costs and legal costs. Legal costs are generally borne by the losing party, but may also be shared. They include:

• bailiff’s costs for service; and
• court fees in appeal proceedings, which are calculated according to a tariff set by law.

Time

The duration of enforcement proceedings depends on the specific circumstances at hand and whether the enforcement regards a foreign or domestic award.

While an application to the President of the District Court for an enforcement order may take about one week, depending on the court’s workload, the length of enforcement proceedings can be drastically extended if the enforcement order is challenged.

Domestic awards

Arbitral awards rendered in Luxembourg may not be subject to opposition, appeal or cassation proceedings before a state court; they can only be challenged through an application for annulment filed with the court of appeal. The annulment procedure may take up to one year to lead to a judgment. Article 1236 of the New Code of Civil Procedure provides that the parties to the arbitration agreement may not contractually exclude the possibility to file an application for annulment against an arbitral award.

Foreign awards

Arbitral awards rendered abroad cannot be annulled in Luxembourg; the party seeking to challenge the enforcement order must file an appeal against the enforcement order within one month of its service before the court of appeal. This may take between one and two years. It must, however, be noted that the appeal procedure in Luxembourg might be impacted by eventual annulment proceedings abroad.

The appeal against the enforcement order does not have a suspensive effect. Nonetheless, according to Article 1248 of the New Code of Civil Procedure, the court of appeal may, upon request by the defendant, “adjust” the terms of the enforcement or order a stay of proceedings if enforcement is likely to seriously prejudice the defendant’s rights.

An award may only be enforced when the President of the District Court has granted an exequatur order. However, the procedure that must be followed in order to challenge the exequatur order fully depends on the origin of the arbitral award.

Whereas domestic arbitral awards may be challenged via a request for nullification of the award itself, Luxembourg courts do not have the power to nullify foreign awards. However, enforcement orders rendered by the Luxembourg courts with respect to foreign arbitral awards may be challenged.

Nullification of Domestic Arbitral Awards

The court of appeal may nullify an arbitral award within one month of the service of the arbitral award in a limited number of cases provided for by Article 1238 of the New Code of Civil Procedure, where:

• the arbitral tribunal has wrongly declared itself competent or incompetent;
• the award was made by an arbitral tribunal that was improperly constituted;
• the arbitral tribunal issued an award without fulfilling the mandate entrusted to it;
• the award violates public policy;
• the award is not reasoned unless the parties have expressly agreed that the arbitrators may not give motivation; or
• there has been an infringement of the rights of the defence.

It should be noted that the action for annulment does not have a suspensive effect, according to Article 1241 of the New Code of Civil Procedure. Upon request by a claimant, if the enforcement of the Arbitral Award is likely to seriously prejudice the rights of one party, the court of appeal may “adjust” the terms of the enforcement or delay it altogether until a final decision is reached.

The Luxembourg Law of 19 April 2023 (see 4.2 Variations in Approach to Enforcement of Arbitral Awards) has introduced a new type of appeal against domestic arbitration awards that may be filed before the arbitral tribunal (or the court of appeal if the arbitral tribunal cannot be reunited): an application for review (recours en révision), aimed at setting aside the arbitral award in order for a new award to be rendered. An application for review may be possible on limited grounds – notably if it is found that the documents upon which the arbitral award has been based have been judicially declared to be false since the award was rendered. The application for review must be filed within two months of a party acquiring knowledge of the potential grounds for review of the arbitral award.

In addition, the Luxembourg courts would not recognise an award if it is held by the criminal courts that the award or its exequatur have been influenced by the use of fraudulent means (Com, CAL-2018-00013, 2 December 2021).

However, according to Article 1231-4 of the New Code of Civil Procedure, a party who, knowingly and without legitimate reason, refrains from invoking an irregularity before the arbitral tribunal in good time, such as the absence of a valid arbitration clause, the exceeding of its powers by the tribunal or the improper constitution of the tribunal, shall be deemed to have waived the right to invoke it.

Foreign Arbitral Awards

The exequatur order may only be appealed before the court of appeal, as a foreign arbitral award cannot be annulled in Luxembourg.

The New Code of Civil Procedure provides various grounds that allow a judge to refuse the enforcement of a foreign award, but such grounds are subject to the provisions of international conventions that might be applicable.

According to the New Code of Civil Procedure, a judge may refuse the enforcement in the following circumstances:

• the arbitral tribunal wrongly declared itself competent or incompetent;
• the arbitral tribunal was improperly constituted;
• the arbitral tribunal ruled without complying with the terms of the mandate entrusted to it;
• the award is contrary to public policy;
• the award is not reasoned, unless the parties expressly agreed that the parties may not give motivation;
• there has been an infringement of the rights of the defence;
• it transpires, after the award was rendered, that it was obtained by fraud of the party in whose favour it was rendered;
• crucial documents that had been withheld by another party have been recovered;
• the arbitral award was based on documents that have been acknowledged or judicially declared to be false since the award was rendered; or
• attestations, testimonies or oaths have been acknowledged or judicially declared as false since the award was rendered.

However, if the New York Convention is applicable, which is often the case, the Luxembourg courts may only refuse the enforcement of an arbitral award on seven limitative grounds, which are expressly laid down by Article V of the New York Convention.

Finally, it should be noted that no distinction is made between partial and final awards when it comes to challenging their enforcement.

The Law of 19 April 2023 reforming Luxembourg arbitration law has also implemented the above-mentioned application for review (recours en révision) with respect to arbitral awards rendered abroad. Unlike the procedure for arbitral awards rendered in Luxembourg, an application for review of a foreign arbitral award is not aimed at seizing the arbitral tribunal to request a new arbitral award. In fact, according to Article 1247 of the New Code of Civil Procedure, such application for review is possible even after the deadline to appeal the arbitral award has expired if it transpires that the arbitral award was obtained by fraud committed by the party in whose favour it was rendered.

Where such fraud can be proven, an application for review enables one party to request the revocation of the enforcement order at any moment in time.

An application for review against a Luxembourg court order that renders an arbitral award rendered abroad enforceable in Luxembourg does not suspend the enforcement of the arbitral award. However, according to Article 1248 of the New Code of Civil Procedure, at the request of the claimant, the court of appeal may “adjust” the terms of the enforcement or order a stay of proceedings if the enforcement is likely to seriously prejudice the claimant’s rights.