• Modernization of the Luxembourg civil and commercial judicial rules.
• Revaluations of the court thresholds.  The lower courts (“juge de paix”) have jurisdiction in civil and commercial cases for up to EUR 15,000.
• Restrictions on appeal.  All judgments below EUR 2,000 are non-appealable.
• Procedural changes.  Appeals from the lower courts will follow the rules of commercial procedures, that is to say oral pleadings will take place without a need for being represented by a fully qualified member of the Luxembourg Bar.
• Debt recovery for uncontested debt.  The deadline for opposing uncontested debt claims (“ordonnance de paiement”) is extend to 30 days and, thereafter, a judgment is deemed to be fully enforceable, however, subject to an appeal (for judgments over EUR 2,000).
• Written court procedures in the District Court (“Tribunal d’arrondissement”).
  • Simplified pre-trial proceedings.  For matters below EUR 100,000 where there are only two parties, i.e. plaintiff and defendant, in principle, strict time limits will apply and only in exceptional circumstances the judge could approve a single, one-time, extension for submission of written pleadings.
  • Pleadings’ contents.  The first written submission must contain the jurisdictional objections and case for non-admissibility.  In addition, unless unknown at the date of the notification of the first written submission, counterclaims have to be set in that first written submission. Note that the pre-trial judge has jurisdiction over these jurisdictional objections.
  • Oral pleadings in a written procedure.  Oral pleadings are no longer obligatory, unless one party requests a final oral submission.
• Written court procedures for the District Court and Court of Appeal.  An obligation to provide a synthesis of the pleadings restating all the means and facts of the case in the final written submission, and a failure to state any such facts or means deems them to be considered as waived.  Note that this rule does not apply to the simplified pre-trial procedure mentioned above.
• Harmonization of time limits for appearance.  Defendants in civil commercial matters have 15 days to appear after the notifications of proceedings by the plaintiff.  Note that additional time limits apply to foreign defendants.
• Summary judgment.  Summary judgments are now fully executable, however, at the risk of the creditor if the decision is reversed.
• Introduction of new procedures.
  • Introduction of a procedure for error and omissions rectification by an introduction of a summons (“Requête”) or by order of the judge.
  • Introduction of a procedure for interpretation of the judgment.  This procedure is reserved for a judgment that lacks clarity and is introduced by way of a summons (“Requête”) or by order of the judge.

Practical implication and considerations:

• We take the view that it is an attempt to increase the efficiency of the Luxembourg courts by setting limits on small claims and claims from EUR 15,000 to 100,000, and thereby relieving the pressure of the various jurisdictions and thus providing the time resources required for larger cases.  It remains to be seen if this will be the result.

• We believe that the measures introduced for written synthesis at the end of the proceedings render the procedure more technical and entail more risks in terms of completion of technical requirements for written procedure and, consequently, the cost of litigation may increase.

• Although an appeal from the lower courts can now be handled by a non-lawyer, the technical challenges of an appeal remain the same and, therefore, engaging an experienced counsel is recommended.

Our experience:

RJ Gaito is celebrating 10 years in business, our firm has acted for and against major corporations, entrepreneurs, as well as private clients in the various jurisdictional degrees of the Luxembourg courts system commencing in the lower courts up to the Luxembourg Supreme Court (“la cour de cassation”).

Our firm has obtained freezing orders over various asset classes, acted in emergency proceedings and enforced foreign judgments in Luxembourg.  We assisted equity investors, debtors and creditors in complex distressed debt matters and, over the years, we were successful in multi-million Euro/United States Dollar recoveries for creditors and equity investors.

Within the framework of European Union (EU) Regulations, the recognition and the execution of judicial decisions rendered by the courts of the EU Member States was greatly simplified.

Pursuant to 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 “a judgment given in a Member State shall be recognized in the other Member States without any special procedure being required”  (Article 36), as well as without further formality being required.

Furthermore, by application of articles 39 and 40 of the Regulation, an EU Member State’s judgment is enforceable by operation of law and is applicable for the purpose of protective measures.

Enforcement of United Kingdom (UK) judgments in Luxembourg post BREXIT

On 31 December 2020, the UK departed from the EU without having received the required consent to its accession to the Lugano Convention of 2007.  The Lugano Convention regulates both international jurisdiction and the recognition and enforcement of foreign judgments in civil and commercial matters.

On 8 April 2020, the UK applied to accede to the 2007 Lugano Convention in its own right.  However, in a recent communication to the EU Parliament and to the Council of the EU of 4 May 2021, the EU Commission is recommending to reject the application of the UK to accession of the Lugano Convention and that the UK should be treated as third countries via the application of the 2019 Hague Convention.

In that case, the UK is and will be treated in Luxembourg as a third-country jurisdiction and, therefore, an enforcement of a UK judgment will require the application of the so-called “exequatur” procedure.  Such a procedure would require a final and non-appealable judgment representing a so-called “title” to be introduced to the Luxembourg District Court (“tribunal d’arrondissement”).  It should be noted that the Luxembourg courts may refuse to execute a foreign judgment if it is contrary to Luxembourg International Public Order (“ordre public”).

From a practical perspective, to enforce a foreign judgment in Luxembourg, the applicant has to serve a summons (“assignation en exequatur”) on the defendant in proceedings requiring the services of a lawyer being a member of the Luxembourg Bar.

The procedure requires the involvement of the Luxembourg State Prosecution which has the right to oppose the execution of a foreign judgment on the ground of “ordre public”.

The procedure takes place in a written form, meaning that it is undertaken by exchange of written pleadings which means that it is lengthy and cumbersome. In addition, like any other Luxembourg judgment rendered in the District Court, it is appealable. Thus, the procedure may last for many months.

Our Take

It is obvious that, a failure of the UK to accede to the Lugano Convention will make the procedure for recognition and execution of UK judgments in Luxembourg cumbersome, more costly, lengthier and could result in legal uncertainty.

In international agreements and, more specifically, in international transactions’ practice, English law and English courts are amongst the most popular choices for lawyers and the business community.  Therefore, in light of the recent Commission communication, the attractiveness of English law may be significantly diminished.

We are of the view that Luxembourg law could provide an attractive alternative as a choice of law and venue given that the legal framework is solid, the Luxembourg judiciary being non-interventionist by its nature and the enforcement of contracts in accordance with their terms.  In recent years, we have witnessed a tendency towards Luxembourg law; one such example was the recent decision by the European Stability Mechanism to issue euro denominated bonds and bills under Luxembourg law rather than under English law.

EU has its General Data Protection Regulation (GDPR) since 2016 and China issued the draft Personal Information Protection Law (PIPL) – what do the 2 have in common?

Which companies should take careful notice of this and how? In this episode I found my co-partner Zach Lichtblau in Shanghai and Mr. Ronnen Gaito in Luxembourg willing to discuss this heavy topic in a relatively light conversation. Ronnen explains how in the EU companies were affected in their daily management by the GDPR, what you should take into consideration with cross border transfers and how it was implemented and executed and Zach compares that with the expectations of the PIPL in China.

Ronnen’s firm is RJ Gaito Law Firm and Zach’s is Bonnard Lawson International Law Firm & Equasia.