Luxembourg

Luxembourg offers a modern, arbitration-friendly framework, confidentiality, and robust enforcement tools.

1.1 Advantages

• Modern, arbitration-friendly legal framework.
• Strong confidentiality protection.
• Expeditious proceeding (the 2023 reform introduced a six-month time limit to conclude proceedings).
• Parties are free to choose arbitrators with the expertise relevant to their dispute.
• A multilingual culture that facilitates international cases.
• Availability of lawyers from different backgrounds with knowledge of the various jurisdictions’ legal systems.
• Political and economic stability that reinforces trust in Luxembourg as a neutral seat.

1.2 Disadvantages and common pitfalls

• Costs may outweigh the costs of court litigation in minor disputes.
• Not all matters are arbitrable.

1.3 Distinctive features

• Competence–competence principle: the arbitral tribunal may rule on its own jurisdiction.
• The presence of a supporting judge, who assists the arbitral tribunal in organising the proceedings.
• Luxembourg includes a review of the award in cases of fraud, newly discovered evidence, or falsified documents.
• Confidentiality of the proceedings.
• Flexible procedural rules: parties can tailor procedures and language to suit disputes.

2.1 Legal framework

Luxembourg’s Arbitration Law is set out in the New Code of Civil Procedure (NCPC), Articles 1224–1249, as amended by the New Arbitration Law of 19 April 2023.

2.2 What qualifies under domestic law as “international arbitration”? Is there a specific statute?

Luxembourg law does not provide a statutory definition of “international arbitration” and draws no distinction between domestic and international arbitration. The only difference found in the law pertains to domestic versus foreign awards. The latter, defined as awards rendered abroad, are subject to separate recognition and enforcement proceedings, distinct from the ones governing domestic awards (Article 1245, NCPC).

An arbitration is deemed international under general principles when it involves cross-border interests, regardless of where the decision is rendered.

2.3 Ratification of the New York Convention

Luxembourg ratified the New York Convention in 1983, through the Law of 20 May 1983.

2.4 Ratification of the ICSID Convention

Luxembourg ratified the International Centre for Settlement of Investment Disputes (ICSID) Convention in 1970, through the Law of 8 April 1970.

2.5 Other treaties relating to arbitration

Luxembourg is also a party to the European Convention on International Commercial Arbitration of 21 April 1961 (the Geneva Convention) and the Convention on Conciliation and Arbitration within the Organization for Security and Cooperation in Europe (OSCE) of 1992.

Furthermore, the country entered into over 100 bilateral investment treaties that include arbitration provisions.

It is worth noting that Luxembourg was previously a party to the Energy Charter Treaty (ECT), which includes arbitration mechanisms. However, it officially withdrew on 17 June 2024.

2.6 Choice of forum for intra-EU dispute settlement

For intra-EU dispute settlements, it is necessary to distinguish investor–state disputes from commercial disputes between private parties.

• In investor–state disputes, the choice of forum has been curtailed by the European Court of Justice’s Achmea decision, which found arbitration clauses in international investment treaties between Member States incompatible with EU law (Case C-284/16 Slovak Republic v. Achmea BV EU: C:2018:158). As a result, such disputes now fall outside the arbitral tribunals’ jurisdiction.
• Conversely, any other commercial arbitration between private parties remains allowed, and parties are free to resolve their disputes through arbitration.

2.7 Is the municipal law governing arbitration based on UNCITRAL Model Law?

Luxembourg Arbitration Law has been heavily influenced by the UNCITRAL Model Law.

2.8 Recent amendments or reforms in arbitration laws

In 2023, Luxembourg overhauled its legislative framework through the Law of 19 April 2023, amending the second part of Book III of the NCPC.

The reform includes several significant changes aimed at strengthening Luxembourg’s appeal as an arbitration forum, such as the establishment of the principle of confidentiality and the introduction of a supporting judge to assist the arbitral tribunal.

The main arbitration institution is the Luxembourg Arbitration Centre (LAC). The LAC, established in 1987, contributes to the development of arbitration law and supports the training of arbitrators, as well as local arbitration associations.

3.1 Presence of local arbitration institutions

The LAC has its own Arbitration Rules (the LAC Rules), which are similar to the International Chamber of Commerce (ICC) International Court of Arbitration Rules.

The LAC is governed by an Arbitration Council, composed of:

• The President of the National Luxembourg Committee of the ICC.
• The National member of the Arbitration Court of the ICC.
• The President of the Luxembourg Bar Association.
• The Director of the Chamber of Commerce.
• The President of the Auditors Institute.

The Arbitration Council is an administrative body that exerts supervisory activity.

3.2 Does the London Court of International Arbitration (LCIA) have a local office?

No, the LCIA does not have a local office in Luxembourg.

3.3 Does the Permanent Court of Arbitration (PCA) have a local office?

The PCA does not have a local office in Luxembourg.

3.4 Does the ICC International Court of Arbitration have a local office?

The ICC does not have a local office, but it is represented in the country through the National Luxembourg Committee of the ICC.

3.5 Does the International Centre for Dispute Resolution (ICDR) have a local office?

The ICDR does not have a local office in Luxembourg.

3.6 Agreement entered into with local offices of international arbitration institutions

There are no formal agreements in place between Luxembourg and international arbitration institutions to establish local offices in the country.

The NCPC distinguishes between arbitration clauses, which are included in a contract and relate to potential disputes arising therefrom, and submission agreements for arbitration, by which parties submit an already existing dispute to arbitration. Both are considered arbitration agreements.

4.1 Requirements as to content and form

• Formal requirements. Arbitration agreements are not subject to any formal requirements and need not be in writing (Article 1227, NCPC) — common rules of evidence apply to the proof of the existence and content of the arbitration agreement. Furthermore, they can be concluded at any moment (including when court proceedings are already pending).
• Substantive requirements. Parties only need to express their intent to arbitrate. There are no other substantive requirements.

Separate Arbitration Agreement

As anticipated, a clause in the main contract forms an arbitration agreement.

If a separate document is entered by the same parties (e.g., an addendum to the main contract) and refers explicitly to the arbitration clause, the dispute linked to this other document is referred to arbitration.

4.2 Validity of arbitration agreements

For arbitration agreements to be valid, the parties must have the capacity to fully dispose of the rights that are the subject matter of the agreement (Article 1224, NCPC).

4.3 Special formalities

No special formality is required.

4.4 Governing law

Parties can expressly choose the law governing the arbitration agreement; otherwise, the law of the seat usually applies.

In Luxembourg, matters are generally arbitrable if parties are free to dispose of their rights, covering most civil and commercial disputes. However, certain categories remain excluded from arbitration.

5.1 Applicable restrictions

Article 1224 of the NCPC excludes the arbitrability of disputes relating to the status and legal capacity of individuals, matters involving the representation of incapacitated persons, and cases concerning incapacitated individuals or those who are absent or presumed absent.

Article 1225 further excludes disputes between professionals and consumers, disputes between employers and employees, and disputes relating to residential leases.

The opening of insolvency proceedings does not affect the validity of arbitration agreements, whether they were concluded before or after the opening of insolvency. Nevertheless, under Article 1226 of the NCPC, disputes regarding or arising directly from the insolvency proceedings cannot be arbitrated.

To enforce an arbitration agreement, the court may suspend judicial proceedings and require the parties to comply with the arbitration clause.

6.1 Stay of proceedings

If a dispute falls under a valid arbitration agreement, national courts will stay court proceedings and refer the parties to arbitration, provided the parties raise a timely jurisdictional objection.

However, if the arbitral tribunal declares that it lacks jurisdiction, or if the arbitral award is set aside on grounds that preclude the matter from being referred to an arbitral tribunal again, the case is heard by the court initially seized of the matter as soon as the parties or one of them have notified the clerk and the other parties (Article 1227-3, NCPC).

6.2 Anti-suit injunctions

Anti-suit injunctions are not available per se under Luxembourg law. It is untested as a generic remedy following normal procedural rules for interim measures, pending the outcome of a case on the merits.

Luxembourg law requires that the arbitrator be a physical person enjoying civil rights. If a legal person is appointed, it must designate a natural person to serve as arbitrator.

7.1 Restrictions on the parties’ freedom to choose arbitrators

The law does not impose any restrictions. Parties can freely choose the number of arbitrators, the arbitrators and the procedure for appointing them (Article 1228-2, NCPC).

7.2 Requirement of arbitrator independence and impartiality

Under Article 1228-6 of the NCPC, arbitrators must be impartial and independent.

7.3 Mandatory rules applicable to the appointment process

There are no mandatory rules regulating the appointment process. It is only specified that, if the arbitration agreement is void because the matter is not arbitrable or if, for any other reason, it is manifestly void or manifestly unenforceable, the supporting judge declares that there is no need for appointment. The decision may be appealed (Article 1228-5, NCPC).

7.4 Appointment mechanism in the absence of party agreement or applicable institutional rules

• In the absence of the parties’ agreement, three arbitrators are appointed (Article 1228-2, NCPC).
• The arbitral institution, or failing that, the supporting judge, appoints the arbitrator(s) where the parties do not reach an agreement. They do so:
  • in case of a three-arbitrator tribunal, where a party fails to appoint an arbitrator within one month of the other’s request, or if the two arbitrators cannot agree on the third within one month;
  • where only one arbitrator is to be appointed, and the parties cannot agree; or
  • in multi-party arbitrations where no agreement exists on how to constitute the tribunal (Article 1228-4, NCPC).

7.5 Mandatory rules applicable to the replacement process

In case an arbitrator previously appointed is to be replaced, the new arbitrator is designated in accordance with the rules agreed between the parties or, by default, with the rules under which the replaced arbitrator was designated (Article 1228-9, NCPC).

7.6 Mandatory disclosure obligations

Before appointment or confirmation, the prospective arbitrators must disclose any facts or circumstances that might call into question their independence, and any circumstances that might give rise to reasonable doubts as to their impartiality.

Arbitrators are then bound to disclose without delay any circumstances of a similar nature that may arise after accepting their assignment.

7.7 Grounds for challenge

Arbitrators can be disqualified if there are circumstances giving rise to legitimate doubts about their impartiality, independence or qualifications.

In terms of impartiality and independence, case law has referred to the same grounds used to challenge a judge. For example:

• the arbitrator or their spouse is a relative of one of the parties;
• the arbitrator has advised or written on the issue in the past;
• the arbitrator has entertained the parties at home or received presents; or
• there is hostility between the arbitrator and one of the parties.

7.8 Mandatory rules governing the challenge of arbitrators

Article 1228-7 of the NCPC provides that, in the event of a disagreement over the challenge to an arbitrator, the dispute is resolved by the arbitral institution or, failing that, the supporting judge, who must be seized of the matter within one month from the arising or discovery of the relevant facts.

7.9 Removal

Arbitrators can be dismissed by unanimous consent of the parties. In case of a dispute, the arbitral institution or the supporting judge will decide (Article 1228-8, NCPC).

7.10 Liability and immunity of arbitrators

Luxembourg law does not provide for immunity for civil liability to arbitrators; hence, the common rules apply.

Conversely, the Luxembourg Criminal Code explicitly sanctions corruption of judges and arbitrators (Articles 250 and 252, Luxembourg Criminal Code).

Luxembourg state courts retain a subsidiary role in the arbitration proceedings. The supporting judge plays a key role.

The supporting judge is the President of the District Court and is seized either by one of the parties or by the arbitral tribunal or one of its members. The supporting judge sits in summary matters and, unless provided otherwise, their orders are not subject to appeal or opposition.

8.1 Interim measures

8.1.1 Overview of interim measures

• Unless the parties agree otherwise, once constituted, the arbitral tribunal may order any interim measures, except attachments, which may only be granted by the courts (Article 1231-9, NCPC).
• When the arbitral tribunal is not yet constituted or when the tribunal cannot grant the measure, parties can seek interim relief from state courts.

8.1.2 Relevance of availability of emergency arbitrator mechanism

The LAC Rules provide for emergency arbitration when a party requests interim measures that cannot be delayed until the constitution of an arbitral tribunal. The President of the Council or, in his/her absence, any other member of the Council appointed for this purpose by the President, appoints an emergency arbitrator who decides on the measure (Article 20 and Appendix III to the LAC Rules).

This emergency mechanism has proven to be highly effective, as it provides urgent, provisional measures to prevent irreparable harm and preserve the status quo.

8.2 Taking of evidence

The supporting judge can order the production or disclosure of evidence held by third parties.

The party that intends to acquire the document will seize the supporting judge, upon invitation from the tribunal. The supporting judge will then summon the third party (Article 1231-8 NCPC).

8.3 Appointment or challenge of arbitrators

The supporting judge resolves disputes relating to the appointment and challenge of arbitrators (see Sections 7.4, 7.8 and 7.9, above).

8.4 Other available assistance

In general, the supporting judge is competent to resolve any procedural difficulties arising from the arbitration proceedings. This includes the possibility to extend the time limit of the arbitral proceedings indicated in the law or agreed upon by the parties.

Another form of assistance to the arbitral tribunal by state judges is regulated in Article 1243, paragraph 3 of the NCPC. Under that law, the Court of Appeal may hear an application for review of an award if the arbitral tribunal cannot be reconvened.

Luxembourg has not codified the doctrine of sovereign immunity, which is based on customary international law.

Courts differentiate between jurisdictional immunity and immunity from execution.

9.1 Domestic scope of sovereign immunity from Luxembourg

Precedents related to sovereign immunity in the context of arbitration are not known as the LAC does not publish its awards.

Luxembourg courts have, however, dealt with them in the context of enforcement of arbitral awards. Luxembourg courts have implemented a restrictive approach to immunity, aligning with international standards. Case law consistently holds that a state’s consent to arbitration equates to an implicit waiver of immunity from jurisdiction. Such a consent may result from a contractual clause or from the state’s participation in the proceedings without claiming immunity. (For a study of relevant case law see: Trevisan, Gaicio-Fievez, Mastragostino. Sovereign Immunity as an Obstacle to Enforcement: The Luxembourg Approach, Journal of International Arbitration, Vol. 42, 1, 2025.)

9.2 Immunity from execution

Immunity from execution is again dealt with at the level of the enforcement of an arbitral award.

Like jurisdictional immunity, immunity from execution can be waived, explicitly or implicitly. Recent case law specified that a state that consents to arbitration through an arbitration clause waives its immunity from execution in relation to any resulting arbitral award.

Particularly, in the context of enforcing an ICSID award, the Luxembourg Supreme Court held that a signatory state’s acceptance of the arbitration clause amounts to a waiver of immunity from execution, thereby preventing that state from claiming such immunity (Luxembourg Supreme Court, State of Romania v. Micula, 14 July 2022, 166/2022).

Only a few procedural requirements are set by law, as the regulation generally aims at flexibility.

• The arbitration must take place at its seat. However, according to Article 1228 of the NCPC, the tribunal may hold hearings and procedural meetings, and sign decisions in any place it deems appropriate, unless the parties have agreed otherwise.
• The parties determine the procedural rules, including deciding whether hearings are to be held in person or virtually, within the sole limits imposed by the principles of due process — namely, equality between the parties, the right of defence and the right to a fair trial (Articles 1231, 1231-3, NCPC).
• The participation of all the parties to the arbitral procedure is not considered a mandatory requirement, as the tribunal may render an award by default so long as the parties have all received due notice (Articles 1231-10 2° and 3°, NCPC).
• The case is different where the claimant fails to develop their claim. Here, the arbitral tribunal must terminate the arbitration proceedings, without prejudice to the processing of claims by another party.

Unless otherwise agreed by the parties and subject to contrary legal obligations, arbitration proceedings are confidential (Article 1231-5, NCPC). Confidentiality binds all parties to all elements related to the arbitration; the award itself is confidential.

Arbitrators are bound to confidentiality regarding the facts that have been revealed in the proceedings, unless they are ordered to disclose confidential information by a court or under the law.

The parties may authorise each arbitrator to express their opinion and include it in the award.

12.1 Requirements as to content and form

• The award must be in writing (this requirement is not explicitly stated in the law, but it can be inferred).
• The award must be signed by all the arbitrators. In case a minority refuses to sign it, this must be mentioned in the award.
• Unless the parties agree otherwise, the award must be reasoned.
• Although the law does not mention it, it is generally recommended that the award include the date and the venue where it is rendered.
• Regarding the content, the award must reflect decisions in line with the law applicable to the dispute.

12.2 Time limit

The arbitration agreement can include a time limit for the procedure. In case it does not, the duration is limited by law to six months from the date the last arbitrator accepted the appointment.

However, the statutory or contractual time limit may be extended by the parties, or by the arbitral institution, or, failing that, by the supporting judge.

12.3 Remedies

The arbitral tribunal can award the final remedies allowed under the law it applies.

In no way can it grant punitive damages, as they are considered contrary to Luxembourg law, which allows only compensatory damages.

13.1 Interpretation and correction of awards

At the request of a party, the arbitral tribunal can interpret the award, rectify material mistakes and omissions, or supplement it when it omitted to rule on a claim.

The tribunal decides after hearing the parties or summoning them. If the arbitral tribunal cannot be reconvened and if the parties cannot agree to reconstitute it, the supporting judge decides, ruling on appeal (Article 1232-4, NCPC).

The request must be submitted within three months of the date of the award’s service (Article 1232-5, NCPC).

13.2 Challenge of an award

Awards rendered in Luxembourg cannot be appealed; they can only be subject to annulment. Any agreement waiving the action for annulment is ineffective.

The application for annulment of the award automatically entails a challenge against the order of the judge who ruled on the exequatur or the recusal of that judge (Article 1237, NCPC).

An application for annulment must be filed with the Court of Appeal within one month from the notification of the award or from the discovery of the fraud (Article 1239, NCPC).

The law does not differentiate between partial and final awards. Therefore, a party can, in principle, challenge a partial award that decides exclusively on the tribunal’s competence without awaiting the final award.

Grounds for annulment of the award

According to Article 1238 of the NCPC, an action for annulment can be brought where:

• the arbitral tribunal wrongly declared or denied its jurisdiction;
• the arbitral tribunal was improperly constituted;
• the arbitral tribunal exceeded its mandate;
• the award is contrary to public policy;
• the award is not reasoned (unless the parties have agreed that the arbitrator need not give reasons); or
• there has been a breach of defence rights.

Review of an award

A party seeking to set aside the award, for a new decision to be made on the same facts and law, can present a request for review to the arbitral tribunal. The application is presented:

• if it is discovered that the award was obtained by fraud of the successful party;
• if it appears that decisive evidence has been withheld by another party;
• if the award was based on evidence that was later recognised or judicially declared to be counterfeit; or
• if the award was based on testimonies, affidavits, or sworn statements that have been recognised or judicially declared counterfeit.

In case the arbitral tribunal cannot be reconvened, the application for review is brought before the Court of Appeal.

The application must be filed within two months from the notification of the award or the discovery of the fraud, the withholding, or the counterfeit (Article 1243, NCPC).

Challenge by third parties

Awards rendered after the entry in force of the new law on arbitration can be challenged by third parties who are negatively impacted thereby.

The challenge is brought before the jurisdiction that would have been competent in the absence of an arbitration agreement (Article 1244, NCPC).

Challenge by third parties, like revision, is a new instrument introduced with the reform of April 2023. Therefore, such a remedy applies only to awards issued after the new law came into force, while those issued beforehand are not covered.

13.3 Recognition and enforcement proceedings

Arbitral awards can be enforced only by virtue of an exequatur order. The procedure to obtain the order differs according to whether the award was rendered, in Luxembourg or abroad.

For domestic awards, the application for exequatur must be filed in the District Court where the award was rendered (Article 1233, NCPC). The proceedings are ex parte and are decided by the President of the District Court. (For foreign awards see Section 14.)

No time limit is set by law for applying for enforcement.

13.4 Cost of enforcement

At the level of the filing of the exequatur which is ex parte there are no court filing costs except for lawyer’s fees, and translation costs related to the award. Once the order is obtained it is served by the bailiff, which will trigger bailiff fees.

13.5 Enforcement of orders of emergency arbitrators

Orders and awards by emergency arbitrators, as regulated in the LAC Rules, cease to be enforceable and binding on the parties where:

• no request for arbitration has been filed with the LAC Secretariat within 30 days of the notification of the emergency arbitrator’s decision;
• the emergency arbitrator or an arbitrator so decides;
• a final award has been rendered, unless the arbitrator expressly decides otherwise; or
• all claims have been withdrawn, or the arbitration proceedings have ended before the final award was rendered.

Concerning foreign arbitral awards, enforcement in Luxembourg is predominantly based on the New York Convention.

14.1 Process for enforcing New York Convention awards

Luxembourg applies the New York Convention subject to a reciprocity reservation, limited to awards issued in other contracting states.

To enforce a foreign award, the party must file a request with the President of the District Court where the award-debtor has a domicile or residence, or where the award is to be enforced.

The proceeding is ex parte and will only be adversarial if the defendant appeals the decision of the President of the District Court.

14.2 Grounds for resisting enforcement of New York Convention awards

Luxembourg courts may only refuse the enforcement of New York Convention awards on the grounds listed under Article V of the Convention. These include the incapacity of a party, invalidity of the arbitration agreement, due process violation, non-arbitrability under Luxembourg’s law and the resolution that the recognition or enforcement of the award would conflict with public policy.

14.3 Enforcing non-Convention awards

In case none of the conventions ratified by Luxembourg is applicable, the enforcement of a foreign award is governed by national rules.

Under Article 1245 of the NCPC, the party must file a request with the President of the District Court where the award-debtor has a domicile or residence, or where the award is to be enforced. The appeal against the order of enforcement must be lodged within one month of the order being served and is submitted to the Court of Appeal sitting in civil matters.

Under Article 1246 of the NCPC, the enforcement of the foreign award may be challenged on any of 10 grounds, represented by the six grounds for the annulment of awards rendered in Luxembourg (see Section 13.2, above), and the four grounds for the review of awards rendered in Luxembourg (see Section 13.2, above).

Furthermore, Article 1247 of the NCPC allows a party that discovers that the award was obtained through fraud after the deadline to challenge the exequatur order has expired, to seek revision before the Court of Appeal within two months of discovering the fraud.

Luxembourg law does not include any professional or ethical provisions specifically applicable to arbitration. Counsels and arbitrators must, however, comply with the ethical duties of the professional association to which they belong, if any.

15.1 Applicable to counsel

There is no professional or ethical provision specific to counsels.

15.2 Applicable to arbitrators

There is no professional or ethical provision specific to arbitrators.

There is no specific provision regulating the financing of a dispute by a third party in Luxembourg. No rule excludes it, and no disclosure is required.

16.1 Applicable regulatory requirements

There is no regulatory requirement.

16.2 Overview of the third-party funding market

As there are no rules as to the disclosure of third-party funding in Luxembourg, it is not possible to provide such an overview.

A few third-party litigation funding entities are based in Luxembourg, with legal structures incorporated under the jurisdiction. Nevertheless, none has an operational local basis.

Luxembourg does not specialise in a particular area; however, the country’s position as a financial and investment funds centre has progressively led to greater international arbitration activity in these sectors.

17.1 Types of specialist arbitration

Arbitration in the investment funds is being promoted by the Luxembourg Association for Arbitration through seminars and conferences. It is seen as a desirable solution in this field for speed and confidentiality reasons.

17.2 Key legal principles

N/A

17.3 Types of claim and defences typically brought in that area

N/A

17.4 Issues and strategic considerations to take note of

N/A

The primary most recent development in Luxembourg arbitration is the comprehensive reform of April 2023, which reflects a clear commitment to fostering an arbitration-friendly environment aligned with international standards. Over the last few years, Luxembourg has seen a growing interest in arbitration, which is likely to lead to further expansion of arbitration activity, particularly in sectors such as finance and corporate. Luxembourg’s role as a central hub for holdings and investment funds will lead to the foreseeable broadening of the country’s expertise in arbitration for investment matters and shareholder disputes.