LUXEMBOURG Law and Practice Contributed by: Emilie Waty and Kloris Vjerdha, KLEYR_GRASSO
3. The Arbitration Agreement 3.1 Enforceability
Nonetheless, disputes concerning the conduct or administration of the insolvency proceedings them - selves may not be referred to arbitration. 3.3 National Courts’ Approach State courts in Luxembourg respect the principle of party autonomy and apply the law chosen by the par - ties in their arbitration agreement. In the absence of such choice of law, the courts will apply the law they consider most appropriate in view of the circumstanc - es of the case, taking into account relevant connect - ing factors (Article 1231 NCCP). National courts consistently uphold and enforce arbi - tration agreements which reflects Luxembourg’s sta - tus as a jurisdiction that is supportive of international practices as well as its commitment to effectively inte - grate arbitration into its legal system. Accordingly, national courts will decline jurisdic - tion over a dispute that falls within a valid arbitration agreement, unless the agreement is null and void due to the non-arbitrable nature of the dispute, or if it is manifestly null and void for any other reason to be determined by the court. Where a valid arbitration clause exists, a defendant’s failure to raise an objection to the state court’s juris - diction at the commencement of the proceedings shall be regarded as a tacit waiver of the arbitration agree - ment. It is for this reason that the party wishing to raise an objection with respect to the court’s jurisdiction must do so at the very outset of the proceedings – ie, in limine litis (see 5.5 Breach of Arbitration Agree- ment ). 3.4 Validity The Luxembourg Arbitration Law expressly recog - nises the separability of arbitration agreements, as enshrined in Article 1227-2 of the NCCP. Pursuant to this principle, an arbitration clause is deemed to constitute an autonomous agreement, distinct and independent from the underlying contract in which it is embedded. Consequently, the validity of the arbitration clause remains unaffected by any finding of nullity, voidness or rescission of the principal contract, thus safeguard -
In accordance with Article 1227 of the NCCP, the deci - sion of parties to submit a dispute to arbitration is formalised in an arbitration agreement that may be concluded in the form of either an arbitration clause ( clause compromissoire ) concluded prior to any dis - pute, or a separate arbitration agreement ( compro- mis ) agreed upon subsequent to the emergence of the dispute. There are no specific formality requirements that are imposed with respect to the form of such agreements, which may therefore be made verbally. In this respect, the LAA regularly holds seminars aimed at raising awareness among practitioners and schol - ars regarding the essential elements to be included in arbitration clauses with a view to ensuring clarity and minimising the risk of future disputes or procedural uncertainties relating thereto. 3.2 Arbitrability Under the Luxembourg Arbitration Law, the majority of civil and commercial matters may be validly referred to arbitration provided that it concerns rights that are at a person’s free disposition. In particular, pursuant to Article 1224 of the NCCP, disputes relating to the status and legal capacity of persons as well as matters concerning missing per - sons are excluded from the scope of arbitration. Moreover, Article 1225 of the NCCP establishes that disputes pertaining to lease agreements, disputes between employers and employees as well as dis - putes arising between professionals and consumers are not subject to arbitration. Lastly, Article 1226 of the NCCP expressly foresees that the commencement of insolvency proceedings does not affect the validity of arbitration agreements irrespective of whether those agreements were con - cluded prior to or following the commencement of such proceedings.
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