LUXEMBOURG Law and Practice Contributed by: Andreas Heinzmann, Hawa Mahamoud and Eva Jean, GSK Stockmann
• appropriate the security or have it appropriated by a third party at market price (if any) unless other- wise agreed; • sell or cause the security to be sold in a private transaction under arm’s length conditions, by a public sale or by way of an auction; • request a court that title to the security be trans- ferred to it as payment of the secured obligations; • appropriate the security at its market price if traded on a trading venue defined in the Collateral Law as a regulated market, multilateral trading system, or organised trading facility system; or • otherwise enforce the security in any other manner permitted by Luxembourg laws, including, if appli- cable, by requesting a set-off or direct payment. The last amendment of the Collateral Law introduced an alternative method of enforcement with respect to the appropriation of units or shares of a collec- tive investment undertaking, whereby a pledgee can redeem them at the redemption indicated in the instru- ments of incorporation of this undertaking. Another amendment included in the Law relates to the public auction procedure for the enforcement of pledges, which can now be carried out by a notary or bailiff, designated as auctioneer by the creditor. The Collateral Law now also delineates the auction pro- cedure, the designation of the pledged assets to be sold, the methods of publication and the deadlines. Enforcement of Guarantees Due to the independent nature of a guarantee, the calling of it could be made as contractually agreed between the parties (even in the absence of a default or the occurrence of the risk guaranteed). However, certain contractually agreed conditions might be observed by the beneficiary before proceeding to the calling of a guarantee. 6.2 Foreign Law and Jurisdiction Under Luxembourg laws, parties to an agreement can freely choose the law governing such agreement and submission to a foreign jurisdiction, subject to such choice not being abusive. Hence, the choice of for- eign law as the governing law of the contract will – in accordance with, and subject to, the provisions of Regulation (EC) No 593/2008 of 17 June 2008 on the
law applicable to contractual obligations – be recog- nised and upheld by Luxembourg courts, unless the chosen foreign law was not made bona fide and/or if: • the foreign law was not pleaded and proved; or • if pleaded and proved, such foreign law would be contrary to the mandatory rules of Luxembourg law or manifestly incompatible with Luxembourg international public policy. The submission by the parties to the jurisdiction of foreign courts would be upheld by the Luxembourg courts, with the exceptions provided for in 6.3 Foreign Court Judgments . A final and conclusive judgment rendered by the fol- lowing courts would be enforced by Luxembourg courts without a retrial or re-examination of the mat- ters thereby adjudicated, save for the examination of the compliance of such judgment with Luxembourg public order: • European Union-located courts, in accordance with applicable enforcement proceedings as provided for in Regulation (EU) No 1215/2012 (the “Brussels Regulation”); and • European Free Trade Association (EFTA)-located courts, in accordance with applicable enforcement proceedings as provided for in the Lugano Con- vention of 30 October 2007 (the “Lugano Conven- tion”). 6.3 Foreign Court Judgments Judgment Given by a Foreign Court A final and conclusive judgment rendered by the below-mentioned courts would be enforced by Lux- embourg courts as follows: • England and Wales courts subject to (i) the provi- sions of the Convention of 30 June 2005 on choice of court agreements (the “Hague Convention”), (ii) the exequatur procedure as set out in Article 678 of the Luxembourg New Civil Procedure Code and (iii) established Luxembourg case law in respect of the enforcement of foreign law judgments; and • a non-EU- or non-EFTA-located court, subject to (i) the applicable exequatur procedure as set out in Article 678 of the Luxembourg New Civil Procedure
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