Luxembourg

• General information
• Court’s willingness to intervene in the arbitration process
• Appeals and setting aside awards
• Consolidation
• Injunctions
• Mandatory provision

General information

Luxembourg arbitration law is set out in the Nouveau Code de procédure civile (“NCPC”).

Key features of the international arbitration regime in Luxembourg include:

• no formal requirements for the validity of an arbitration agreement (Art. 1227 NCPC);
• the arbitral tribunal has the authority to decide on its own jurisdiction (Art. 1227-2 NCPC);
• the Luxembourg court shall declare that it has no jurisdiction over a dispute covered by an arbitration agreement, unless the agreement can be declared void on limited grounds (non-arbitrability of the case, or it is manifestly void or non-applicable) (Art. 1227-3 NCPC);
• the arbitration clause is deemed separate from the underlying contract and is thus not impacted by nullity or invalidity of the underlying contract – and vice versa (Art. 1227-2 NCPC);
• The parties are free to agree on the number of arbitrators. If the parties fail to nominate arbitrators, the default number is three, and a default appointment process applies (Art. 1228-2 and 1228-4 NCPC);
• If a time limit is not specified in the arbitration agreement, the default duration of the proceedings is set at six months with the possibility to extend it (by agreement of the parties or by the person responsible for organizing the arbitration if such a person has been designated by the parties or, failing that, by the supporting judge) (Art. 1231-6 NCPC).

Courts' willingness to intervene in the arbitration process

In cases of difficulties or a deadlock situation during the arbitral proceedings, a supporting judge (“juge d’appui”) may be involved when :

•  the designated seat of the arbitration is Luxembourg, or
• in the absence of a designated seat if (i) the parties have submitted the dispute to Luxembourg procedural law, (ii) the parties have expressly given jurisdiction to the Luxembourg courts over procedural disputes, or (iii) the dispute is closely connected with Luxembourg (e.g. if the underlying contract has to be executed in Luxembourg or if the defendant has its seat in Luxembourg);
• there is a risk of denial of justice (Art. 1229 NCPC).

The supporting judge may appoint arbitrators where the parties cannot reach an agreement (Art. 1228-4 NCPC), remove arbitrators for misconduct (Art. 1228-7) and extend the duration of the tribunal’s mission (Art. 1231-6 NCPC).

However, the role of the supporting judge is supplementary, with priority given to the person responsible for organising the arbitration (i.e., the dispute resolution mechanisms set up by the arbitral institutions).

The arbitral tribunal is competent to order any interim or conservatory measure it deems appropriate, but only state courts can order seizures (Art. 1231-9) and the production of documents by third parties (upon the request of one party based on the invitation of the arbitral tribunal) (Art. 1231-8).

An award has res judicata as soon as it is rendered (Art. 1232-3 NCPC), but it can only be enforced in Luxembourg if it has obtained an exequatur order.

The Court of Appeal (or the District Court if the award is rendered before 25 April 2023) is competent to hear requests to set aside the awards (please refer to “Appeals and setting aside awards” below).

Appeals and setting aside awards

In relation to an arbitration award rendered by a Luxembourg seated tribunal no opposition, appeal or cassation on the merits is possible  (Art. 1236 NCPC). 

If the award is rendered in Luxembourg, a party may file a request with the Court of Appeal to have the award annulled, within one month of the award’s notification, on any of the following limited grounds mentioned in article 1242 NCPC:

•  incompetence of the arbitral tribunal;
• irregularity of its constitution;
• failure to comply with its mission;
• violation of Luxembourg public order in the award;
• lack of reasoning in the award (unless the parties agreed otherwise);
• violation of due process.

Parties can request a re-examination before the same court (if the arbitral tribunal cannot be reconvened) within 2 months from when the cause for revision was discovered, on the following limited grounds mentioned in article 1243 NCPC:

• fraudulent means used to obtain an award ;
• discovery that determinative evidence was withheld by the other party; or
• false exhibits, certificates, testimonies or statements used as the basis for the award.

An appeal against an award rendered in Luxembourg does not suspend its enforceability. However, If enforcement would seriously prejudice a party’s rights, the Court may suspend or amend it (Art. 1241 and 1248 of the NCPP).

Consolidation

Neither the tribunal nor the court has power to order consolidation of related arbitrations without the consent of all parties or a properly drafted clause permitting consolidation.

Injunctions

Prior to the constitution of the arbitral tribunal, or if it is not competent to grant the requested measure, parties can make a summary application to state courts for an interim, provisional or conservatory measure. This does not constitute a waiver of the arbitration agreement (Art. 1227-4 NCPC).

Once the tribunal is constituted, and unless the parties agreed otherwise, arbitrators may impose provisional or conservatory measures which they deem appropriate and modify, complete, suspend or retract them. Luxembourg courts remain competent in cases where the tribunal is not competent to rule on such measures such as attachment procedures or constraints on third parties. Should the tribunal decide that sought and granted measures should not have been granted, the requesting party will be held liable for costs and damages incurred by another party (Art. 1231-9 NCPC).

Mandatory provisions

Most provisions of Luxembourg arbitration law may be excluded by agreement of the parties. Notable exceptions include:

• Disputes involving matters such as personal status and capacity, consumer, employee and residential lease issues, as well as disputes arising from insolvency proceedings (although the opening of insolvency proceedings does not prevent the application of existing arbitration agreements or the conclusion of such agreements during the course of the insolvency proceedings) cannot be submitted to arbitration (Art. 1224 to 1226 NCPC);
• Separability of the arbitration clause (Art. 1227-2 NCPC);
• Competence-competence (Art. 1227-2 NCPC);
• Provisions as to independence and impartiality of the tribunal (1228-6 and 1228-7 NCPC);
• Parties must be treated equally and must be given a full opportunity to present their case (Art. 1231-3 NCPC)
• A party who fails to address irregularities at an early stage, without a legitimate reason, is deemed to have waived its right to do so (Art. 1231-4 NCPC).
• Luxembourg courts remain competent to grant measures in cases where the arbitral tribunal has not been constituted or where the state court is solely competent to rule on the requested measure, such as asset freezes (“saisie-arrêt”) (Art. 1227-4 NCPC)
• Arbitral tribunal discussions are confidential (Art. 1232 NCPC), and all tribunal members sign the final award. The award carries the same effect even if a member refuses to sign it (Art. 1232-1 NCPC)
• The arbitral tribunal's ruling may only be declared void by the judicial authority once the award has been made, and only on certain grounds (please refer to “Appeals and setting aside awards” above).

Arbitrators' attitude to procedure

Luxembourg arbitrators come from a civil law background where document discovery and witness cross-examination are not common in court proceedings. Legal submissions are usually in writing, followed by oral arguments from the parties’ counsel for the parties. However, in international arbitrations, Luxembourg arbitrators are open to adopting a mixed type of procedure to accommodate the expectation of parties from both common law and civil law backgrounds.

Arbitrators have broad powers, including : (i) ordering a party to disclose information or documents (Art. 1231-8 NCPC), (ii) granting interim measures (Art. 1231-9 NCPC), (iii) suspending proceedings for a specified duration or until the occurrence of an event (Art. 1231-11 NCPC), (iv) allowing third-party interventions upon request by the third party or a party itself (Art. 1231-12 NCPC), (v) imposing penalties to compel parties to comply with their decisions, including provisional and conservatory decisions (Art. 1231-13 NCPC).

 The arbitral tribunal must ensure that all parties have equal opportunities to be heard and present their case, adhering to due process (Art. 1231-3 NCPC).

Arbitrators' role in settlement

In practice, Luxembourg arbitrators do not play an active role in promoting a settlement of the dispute, unless the parties have asked to do so (Art. 1231 NCPC)

Costs of arbitrations

In ad hoc arbitrations, arbitrators set their own fees. In practice, they determine their charge-out rates at the outset of the proceedings. The arbitrators impose the burden of the arbitration costs in their awards. In general terms, the overall costs of national arbitrations are usually lower than international arbitrations.

The rules of the Luxembourg Chamber of Commerce provides for a table of arbitration costs, which includes administrative charges and arbitrator fees. These costs are proportional to the amount of the claim at stake and the number of arbitrators involved.

Availability of arbitrators

There is no public list available of experienced arbitrators. A certain number of lawyers and judges are however reputed for their ability to arbitrate.