Arbitration in Luxembourg
Arbitration in LuxembourgUpdated on Monday 21st October 2019
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In Luxembourg, arbitration is an alternative to the judicial procedures and consists in depositing the details of a dispute in front of one or more arbitrators who make a binding decision. Only if both parties consent arbitration can take place. Any dispute may potentially be subject to arbitration. In practice, arbitration is justified in the following cases: the dispute may be of international interest; the amounts involved are of a certain size, the dispute has some technical complexity.
The advantages of choosing this form of judgment are: the confidentiality and discretion, the fast procedures, the fact that the award can be quickly performed in all 145 countries of the world have acceded to the New York Convention which provides for the recognition of foreign arbitration awards, professional referees from people with all the guarantees professionalism in a specific area subject of the dispute and not last the arbitration is generally less expensive than the legal procedures.
Our attorneys in Luxembourg can offer more information on the laws related to arbitration. Companies in need of legal support in relation to arbitration matters can rely on our law firm in Luxembourg for assistance.
The Arbitration Law in Luxembourg
Luxembourg has adhered to several international conventions in terms of arbitration, among which the New York Convention of June 10, 1958 and the European Convention on International Commercial Arbitration of 1961.
The national laws on arbitration in Luxembourg does not make any difference between proceedings related to domestic and international arbitration. However, in commercial litigation, which is sought to be solutioned through arbitration, an agreement in this sense must have been drafted.
Our Luxembourg lawyers can offer more information on the legislation applicable in arbitration cases in the Grand Duchy.
The difference between arbitration and litigation in Luxembourg
Considering arbitration involves similar procedures to court litigation, many people wonder what the differences between the two procedures are. There are several differences between the two procedures, among which:
- arbitration implies the submission of the dispute by agreement between the parties to one or more arbitrators;
- arbitration is based on a mutual agreement between the parties, contrary to litigation which can be begun by one party;
- arbitration is subject to confidentiality and privacy, as the case is heard by the arbitrators and the representatives of the parties;
- arbitration is usually requested in international disputes between companies entering commercial contracts;
- arbitration implies a faster resolution of the case, lower costs and binding decision of the arbitrators.
It is also important to note that if the parties do not agree with the solution of the arbitrators, they can take the case to a Luxembourg court.
Our lawyers in Luxembourg can offer more information on the legislation applicable in arbitration cases.
The arbitration procedure in Luxembourg
The Luxembourg Civil Code contains articles dedicated to arbitration. In 2012, these articles were amended in order to introduce mediation as a means through which a legal dispute could be settled without appealing to solutions offered by Luxembourg courts.
The arbitration process is carried through the Arbitration Court in Luxembourg which is specialized in handling commercial disputes. The arbitration procedure consists in the parties involved in the litigation presenting their cases before the arbitrators they have chosen by agreement. The arbitrators can be either lawyers in Luxembourg or experts in their field. They will try the case and issue an award. It is good to know that a court of law will decline to try a case if an arbitration clause or agreement has been introduced in a contract by the parties. The court will only judge the matter if the result of the arbitration proceedings were unsatisfying for one of the parties.
Arbitration bodies in Luxembourg
With regard to future disputes arising from a contract, the parties may choose to insert an arbitration clause for this purpose in the contract. Even in the absence of such a clause in the contract, it is open to parties to have recourse to arbitration after the dispute has arisen by using a signed ad hoc arbitration agreement.
The Chamber of Commerce of the Grand Duchy of Luxembourg is the body involved in resolving the dispute between parties through arbitration pursuant to the regulations of the International Court of Arbitration of the International Chamber of Commerce parts.
The Arbitration of the Chamber of Commerce of the Grand Duchy of Luxembourg Centre was founded in 1987 and operates under the authority of an Arbitration Council composed of five members, which are the President of the Luxembourg National Committee the International Chamber of Commerce (ICC) - as Chairman, the Luxembourg member of the Court of Arbitration of the ICC, the Dean of the Bar Association of Luxembourg, the Director General of the Chamber of Commerce and the President of Institute of Auditors (IRE).
The Court is responsible for organizing and ensuring the smooth running of the arbitration proceedings pending before the Arbitration Centre, in the manner set out in the Arbitration Rules of the Centre.
Jurisdiction restrictions in arbitration in Luxembourg
It is important to note that not all disputes can be tried through arbitration in Luxembourg. This is because the parties must have agreed upon an arbitration clause or must agree on one prior to requesting for arbitration.
The following matters cannot be resolved through arbitration in Luxembourg:
- - civil matters cases related to the Family Law, such as divorce, child custody and alimony;
- - cases related to separation or other conjugal matters;
- - the legal status or capacity of a natural person (matters related to inheritance).
Also, any case the Arbitration Court deems of public matter can be denied being tried through this method. The Luxembourg Arbitration Court also has jurisdiction in matters which refer to its capacity of issuing rulings.
As mentioned above, arbitration is usually used in international and domestic commercial litigation and legal advice in such matters can also be obtained with our attorneys in Luxembourg.
When it comes to the documents which can be submitted as evidence in an arbitration procedure, the parties can respect the same principles as in the Civil and Commercial Codes which enable them to submit testimonies, accounting documents, writings and even presumptions. The parties are also allowed to file private documents, such as contracts, invoices, correspondence and witness statements. This is why arbitration can be used in debt collection cases in Luxembourg.
With the help of our Luxembourg law firm, you can file any commercial litigation case with the Arbitration Court.
What are the advantages of arbitration?
As we all know, a trial in any court around the world can take quite long to receive a resolution. Commercial disputes are among those taking up a lot of time, which is why arbitration can be a good solution. Among the advantages of arbitration, we can mention the following:
- - confidentiality – the Luxembourg Arbitration Court ensures the confidentiality of the case and non-disclosure of sensitive information;
- - international recognition – an award issued by an arbitration court is recognized and implemented in all the countries signing an agreement in this sense;
- - the possibility of choosing the arbitrators – compared to a Luxembourg court where the judges are appointed, in arbitration, the parties choose the arbitrators;
- - faster resolution of the case – compared to court litigation, arbitration takes much less time;
- - cheaper proceedings – arbitration is less expensive than court proceedings.
Among the other reasons, why arbitration should be chosen whenever possible are:
- - the parties have 8 days to agree on the arbitrators and announce their names;
- - arbitration proceedings don’t take more than 3 months to complete;
- - the parties can file their evidence with at most 2 weeks before the proceedings start;
- - the arbitrators must issue a ruling within 6 months after the start of the proceedings.
For complete information on arbitration laws and procedures, please contact our law firm in Luxembourg.