LUXEMBOURG Law and Practice Contributed by: Vassiliyan Zanev and Natalja Taillefer, Loyens & Loeff Luxembourg S.à r.l.
bles would be subject to the law of the country in which the assignor has its habitual residence. Regarding assets other than receivables, the creation, perfection and enforcement of a securi - ty interest over, or transfer of, assets is governed by the law where such asset is located, notwith - standing the contractual choice of the parties. In practice, the originators, sellers and secu - ritised assets are prevailingly located abroad and thus the perfection of the transfer of (or the security interest over, as the case may be) such assets would not be governed by Luxembourg law. Luxembourg Perfection Requirements Where Luxembourg law applies, perfection requirements depend on the type of the rele - vant financial asset. Regarding the receivables, the assignment of an existing claim to or by an SPE becomes effective both between the parties and against third parties as from the moment the assignment is agreed on (unless agreed oth - erwise). While the assignment of a future claim is conditional on it coming into existence, as soon as the claim does come into existence, the assignment becomes effective between the par - ties and against third parties as from the moment the assignment is agreed on (unless agreed oth - erwise) despite the opening of bankruptcy pro - ceedings or any other collective proceedings against the assignor, even if such proceedings are opened before the date on which the claim comes into existence. The Securitisation Law does not require notifica - tion of the assigned debtor for the purpose of the perfection of the assignment. Nevertheless, the debtor can validly discharge its obligations to the transferor if it has not become aware of the transfer. A transfer of receivables entails a
transfer of any related guarantees and/or secu - rity interests and its enforceability by operation of law against third parties, without any further formalities. In the case of other assets, it is recommended to assess the relevant perfection requirements on a case-by-case basis, depending on the type of the asset. As described in 6.1 Insolvency Laws , the qualifi - cation of a transaction as a true sale or a secured loan would normally be subject to the laws gov - erning the sale agreement (which is, in turn, gen - erally chosen based on the location of the assets to be transferred). As the securitised assets are rarely located in Luxembourg, foreign law would usually be applicable to such determination. Where Luxembourg law does apply, the court would normally look at the economic substance of the transaction and the intention of the par - ties, as determined based on the available evi- dence. Unfortunately, there is little to no case law in Luxembourg, which would set the precise cri - teria. The Securitisation Law provides expressly that an SPE’s obligation to reassign the securi - tised claims back to the transferor included in the securitisation documents may not give basis for the requalification of the assignment and the risk that the assignment would be regarded as a secured loan is thus limited. As the qualification of the sale agreement is rarely a matter of Luxembourg law, true sale opinions are uncommon in Luxembourg and the practitioners would instead normally opine on the enforceability of the foreign-law judgments made with regard to such agreements.
241 CHAMBERS.COM
Powered by FlippingBook