LUXEMBOURG Trends and Developments Contributed by: Emilie Waty and Kloris Vjerdha, KLEYR_GRASSO
venting judicial oversight and placing the weaker party at a disadvantage. Limited recourse against arbitral awards The New Arbitration Law provides for limited recours - es against Luxembourg arbitral awards which may only be subject to annulment proceedings ( recours en annulation ) as well as application for review ( recours en revision ). Annulment proceedings are provided for under Article 1237 of the NCCP and may be initiated before the Court of Appeal sitting in civil matters, on the basis of six grounds such as the absence of jurisdiction of the arbitral tribunal, violation of public policy or infringe - ment of the rights of the defence. The annulment proceedings foreseen by Article 1237 of the NCCP do not, in principle, suspend the enforceability of the award in question. An application for review may also be lodged, pursu - ant to Article 1247 of the NCCP, before the Court of Appeal for the revocation of an award. For such an application to be successful, one of four specific con - ditions must be satisfied such as fraud or where the award was rendered on the basis of false evidence. Enforcement of arbitral awards The enforcement of Luxembourg and foreign arbitral awards by a simplified exequatur procedure is fore - seen in Chapter VII of the NCCP and more specifically in Articles 1233 to 1249. Luxembourg and foreign awards may be enforced fur - ther to an ex parte application filed before the Presi - dent of the District Court. Exequatur of Luxembourg awards may only be refused on the basis of six spe - cific grounds foreseen in Article 1238 of the NCCP. Exequatur of foreign awards may be refused on the basis of the six grounds enumerated in Article 1238 of the NCCP but also on the basis of four additional grounds foreseen in Article 1246 of the NCCP, such as fraud. The order granting or refusing the exequatur may be appealed before the Court of Appeal. Those proceed - ings are adversarial and do not suspend the enforce -
ability of the award except if the enforcement of the award would be highly detrimental to a party. For Luxembourg awards, the exequatur order can - not be appealed separately from an appeal against the award itself. For foreign awards, an application for review may also be filed against the exequatur order in case a fraud committed by the executing party is discovered after the expiry of the time limit to file an appeal against the order. In sum, the recent legislative arbitration reform is both ambitious in scope and purposely designed to posi - tion Luxembourg as a competitive and attractive arbi - tral seat on a global scale. Arbitration in Luxembourg’s Investment Fund Industry The Luxembourg investment fund industry is charac - terised by increasingly high sophistication. The Grand Duchy of Luxembourg stands in fact as the foremost domicile for investment funds within Europe and ranks as the second largest globally. Driven by its ambition in this domain, Luxembourg continuously seeks to attract investment funds in its territory and to position itself as a leading domicile for such vehicles. Having regard on the above, it is undoubtful that the presence of over 13,428 fund units in Luxembourg raises the likelihood of disputes arising in relation thereto. Until recently, financial institutions adopted a con - servative approach with respect to alternative meth - ods of dispute resolution and therefore, disputes in the banking and financial sectors were predominantly brought before state courts through ordinary judicial proceedings. It was widely believed that the complex - ity of financial disputes and necessity of specialised expertise with respect to their regulatory framework made ordinary courts the most fitting choice for adju - dicating such disputes. Although this traditional point of view has not yet been entirely eclipsed, it is becoming increasingly appar - ent that arbitration is an emerging and appropriate
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