LUXEMBOURG Law and Practice Contributed by: Emilie Waty and Kloris Vjerdha, KLEYR_GRASSO
1. General 1.1 Prevalence of Arbitration
ment of such funds, its high concentration of cross- border transactions as well as its regulatory sophisti - cation on the matter. Specifically, Luxembourg is the largest investment fund centre in Europe with net assets under supervi - sion of over EUR5,820.1 billion. The abundance of such funds undoubtedly triggers unavoidable dis - putes and therefore positions arbitration as an attrac - tive mechanism of alternative dispute resolution due to its enforceability, privacy and flexibility. 1.3 Arbitration Institutions The Arbitration Center of the Luxembourg Chamber of Commerce, also known as the Luxembourg Arbitra - tion Center (LAC) was established in 1987 and serves as the principal arbitral institution in Luxembourg for the administration and resolution of domestic and international disputes. The LAC is managed by its Council and assisted in its work by the Secretariat. The LAC operates pursuant to its own set of pro - cedural rules, namely the Rules of Arbitration of the Luxembourg Chamber of Commerce (the “LAC Proce - dural Rules”). The LAC Rules, which draw inspiration from the arbitration rules of the International Chamber of Commerce (ICC), were most recently revised on 1 January 2020, and are available on its official website both in English as well as in French. In addition to its primary function of administering arbitration proceedings, the LAC is also committed to promoting arbitration in Luxembourg and provides support to regional arbitration associations, such as the Think Tank for Arbitration and the Luxembourg Arbitration Association (LAA), a non-profit organisa - tion dedicated to the promotion and development of arbitration practice in Luxembourg founded in 1996. Apart from the LAC, prominent bodies such as the ICC, the London Court of International Arbitration (LCIA), the German Arbitration Institute (DIS) as well as the Belgian Centre for Arbitration and Mediation (CEPANI) are frequently employed in international arbitration cases in Luxembourg. To further strengthen Luxembourg’s collaboration with foreign arbitral institutions, the Luxembourg Chamber
Located at the heart of Europe and armed with a strong economy that attracts global investors and pushes companies to establish their corporate pres - ence in its territory, Luxembourg presents itself as a highly favourable jurisdiction for international arbitra - tion. Particularly, following the introduction of the law of 19 April 2023 (the “Luxembourg Arbitration Law”), amending the Title I of Book III of the New Code of Civil Procedure (NCCP), which effects a large-scale reform of Luxembourg’s legal framework for domestic as well as international arbitration and further aims to improve flexibility, speediness and confidentiality, Luxembourg has effectively enhanced its attractive - ness as a seat of international arbitration matters. Similarly to most jurisdictions, traditional litigation before courts remains the predominant recourse when a dispute arises in Luxembourg. However, over the past several years the number of arbitration cases has significantly increased by over 60%, of which over 85% pertain to international arbitration matters where at least one party is located outside of Luxembourg. Given Luxembourg’s standing as an international forum, parties most commonly resort to it for the enforcement of arbitral awards which has become a frequent and well-established occurrence. With its continuous efforts to promote itself as an arbitration- friendly jurisdiction, Luxembourg is increasingly serv - ing as the seat for arbitral proceedings. 1.2 Key Industries In Luxembourg, there are ongoing efforts to promote greater reliance on arbitration proceedings for dis - putes in the financial and banking sectors. In recent years, there has been an important increase in the number of contracts containing an arbitration clause and, as a result, international arbitration related to investment funds disputes has become an indisput - able trend. This is largely attributable to Luxembourg’s expanding role as a global hub for the restructuring and manage -
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