LUXEMBOURG Law and Practice Contributed by: Anna Gassner, Philipp Mössner, Andrea Carraretto and Etienne Weryha, GSK Stockmann SA
for specific allocation of losses, though again within the limits of the above legal provision. The access to information by the JV partners depends on the form the JV takes, which may provide for the communication of broad information regarding the JV and its business to almost no communication. As a matter of fact, if the JV is implemented under the form of a sole JV agreement, then the terms and conditions of said JV agreement will usually specify the informa - tion rights of the JV parties. If the JV partners establish a JV entity in the form of a Luxembourg company, then the JV partners, as stakeholders of the entity, shall (for most Luxembourg corporate forms) have access by law at least once a year to a management report prepared by the management body of the JV vehicle and the annual financial statements of the JV entity. Finally, when it comes to non-compete, without par - ticular contractual commitment, there is no general rule for non-compete obligations under Luxembourg law between JV partners. 6.7 Minority Protection and Control Rights There are many ways for minority JV partners to shape control rights to protect their interest, the most com - mon being: • to ensure access to information through the right to appoint a member to the corporate bodies of the JV vehicle; • to transfer restriction clauses (such as lock-up clauses, right of approval in the case of a transfer, right of first offer in the case of transfers); • anti-dilution rights; and • veto rights on important matters requiring the prior approval of a minority party. All these rights are usually provided for in the JV agree - ment and mirrored in the articles/partnership agree - ment of the JV vehicle (mainly to ensure enforceability towards third parties). 6.8 Applicable Law and Dispute Resolution in International JVs When selecting the substantial and procedural law governing a JV agreement in an international context, several critical factors must be taken into account to
ensure the agreement is robust, enforceable, and con - ducive to the objectives of the JV, among others: • jurisdictional compatibility ‒ ensuring that the chosen law is recognised and enforceable in all relevant countries involved; • neutrality ‒ selecting a neutral, internationally respected jurisdiction to avoid bias; and • contractual flexibility ‒ choosing a law that allows tailored agreements and effective dispute resolu - tion (arbitration/litigation). Albeit a small country, the Grand Duchy of Luxem - bourg is extensively focusing on international JVs and is attractive to foreign investors because of its stable and predictable legal system. However, JV agreements may also be subject to foreign law and jurisdiction. When parties to a JV fail to agree on the applicable procedural law, there may be confusion about which country’s procedural rules will apply. This can lead to disputes over jurisdiction (forum shopping), the admissibility of evidence, and the conduct of proceed - ings, causing significant delays in resolving conflicts. In Luxembourg, there is no general statutory obliga - tion for parties to attempt alternative dispute reso - lution (ADR) such as mediation or arbitration before initiating court proceedings in civil or commercial mat - ters. Parties are generally free to bring their disputes directly before the courts unless they have contractu - ally agreed to an ADR process (such as a mediation or arbitration clause). The recognition of a foreign judgment in Luxembourg may require an exequatur procedure in accordance with Article 678 of the Luxembourg New Civil Pro - cedure Code. However, Luxembourg, being an EU member state, it also applies the EU regulations in this domain, such as: • Regulation (EC) No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) to which Luxembourg is a party; and • Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and
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