LUXEMBOURG Trends and Developments Contributed by: Arnaud Arrecgros, Yann Hilpert, David De Pasquale, Beatriz Garcia and Antoine Becker, Maples and Calder
cier ) in advance, and must have a clear organisational structure, transparency rules, and risk management mechanisms. Without replacing the central account keeper, the involvement of a control agent (an investment firm or credit institution) is an additional option offered to issuing companies to modernise the management of their financial operations and securities administra- tion. The Shift From Asymmetric Jurisdiction Clauses in Cross-border Financing Arrangements Due to Uncertainty Regarding Their Validity The decision by the Court of Justice of the European Union (CJEU) handed down on 27 February 2025 in Sociétà Italiana Lastre SpA v Agora SARL (Case C-537/23) (“ Lastre ”) has been the subject of discus- sion and analysis in the Luxembourg legal market and has led to notable drafting changes with respect to asymmetric jurisdiction clauses in international finance contracts and the related Luxembourg legal opinions that are typically implemented in connection with such transactions. Asymmetric jurisdiction clauses have long been standard practice in international finance agreements due to the flexibility they provide to lenders. These clauses are inherently one-sided: whilst they desig- nate specific courts as having jurisdiction over con- tractual disputes, they simultaneously grant lender parties the liberty to initiate proceedings in any other courts of competent jurisdiction. The CJEU’s decision in Lastre brings welcome clari- fication on fundamental issues by confirming that the assessment of such asymmetric jurisdiction clauses falls under European law rather than national law, as they must comply with the requirements of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (recast) (the “Brussels Regulation”). Importantly, the court established that these clauses are not inherently invalid. Furthermore, the court in Lastre clarified that where alternative jurisdictions of competent jurisdiction are restricted to courts within EU member states and parties to the
Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, signed on 30 October 2007 (the “Lugano II Convention”), such clauses are acceptable as they satisfy the objective criteria of foreseeability, transpar- ency and legal certainty prescribed by the Brussels Regulation. Alongside this welcome clarification, however, Lastre has generated new uncertainty regarding the precise drafting required for such clauses to be enforceable. For instance, it remains unclear how a Luxembourg court would assess an asymmetric jurisdiction clause designating the English courts while also broadly per- mitting lenders to bring proceedings before any other competent court. As a consequence of Lastre , adaptations are emerg- ing in the Luxembourg legal market. In pursuit of more legal certainty, and when establishing new financing arrangements, lenders are often foregoing asymmetric jurisdiction clauses and instead opting for clauses that attribute jurisdiction to specific courts either on an exclusive basis applicable to all contracting parties, or sometimes modify asymmetric clauses to achieve compliance with the conditions of foreseeability and transparency. Where classic asymmetric jurisdiction clauses are retained, lenders should be aware that there have been adjustments in the associated Lux- embourg legal opinion practice with legal advisers appropriately qualifying their opinions on such clauses in order to underscore the potential uncertainties sur- rounding the validity of such clauses following Lastre . This is one of the reasons why lenders are tempted to seize the opportunity of an amendment to existing financing arrangements (such as in the context of an increase, an extension, the accession of other obli- gors or credit parties) to implement such adjustments (however, we have not seen lenders amending their documentation for that sole purpose). Related developments in England and Wales are also noteworthy. The entry into force on 1 July 2025 of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “2019 Hague Convention”) will affect the enforcement of judgments rendered by courts in contracting states, including those arising from agreements containing
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