A. LEGISLATION AND RULES
A.1.1 Luxembourg is modernizing its arbitration statutory law
International arbitration in Luxembourg continues to be governed by the provisions of the New Code of Civil Procedure, Book III (articles 1224 to 1251), to which there have been no legislative amendments, yet. However, we expect a change in the Luxembourg statutory law on arbitration within the next coming months since an arbitration bill (Bill No. 7671) was filed on 15 September 2020 and is being debated before the Luxembourg House of Representatives. That arbitration bill reflects a continuing and careful effort by the Grand-Duchy of Luxembourg to modernize its arbitration provisions and to offer arbitration users an arbitration-friendly environment. For further details on that bill, we refer to the 2021-2022 edition of this yearbook in which we highlighted the major upcoming improvements in arbitration in Luxembourg.
A.1.2 Luxembourg makes public its intention to withdraw from the ECT
On 18 November 2022, Luxembourg announced its intention to withdraw from the ECT, following in the footsteps of Poland, Spain, France and others EU member states which have recently decided to leave the treaty.
The Luxembourg Minister of Energy stated that despite the modernization efforts with respect to the ECT, the treaty is still not compatible with the goals of the Paris Climate Agreement, as it continues to protect investments in fossil and nuclear energies. That statement was in line with the environmental concerns raised by other exiting European states.
Luxembourg has not yet provided any date on which it will officially leave the ECT. Pursuant to article 47(1) of the ECT, Luxembourg shall “give written notification to the Energy Charter Depositary of itswithdrawal from the Treaty.” Such withdrawal will take effect one year after the date of receipt by the Depositary of the notification of withdrawal, or on such later date as may be specified in the notice. In other words, the ECT still applies in Luxembourg at least until 2024.
It is noteworthy that the ECT will continue to protect investments already made in Luxembourg in the energy field, including with respect to fossil fuels and green energy for a period of 20 years from the date when Luxembourg’s withdrawal from the treaty becomes effective.
A.2 Institutions, rules and infrastructure
The main arbitral institution in Luxembourg is the Arbitration Chamber of the Luxembourg Chamber of Commerce (ACLCC).
On 8 September 2022, the ACLCC entered into a Cooperation Agreement with, among others, CEPANI and NAI to strengthen arbitration in the Belgium-Netherlands-Luxembourg area (Benelux area). Under that agreement, the ACLCC, CEPANI and NAI will mainly recommend to each other suitable individuals to serve as arbitrators or neutral individuals in particular cases, facilitate lectures of mutual interest in the field of arbitration and other forms of ADR, and exchange information and publications on arbitration and other forms of ADR. The institutions will also work together to promote international arbitration and ADR as preferred methods of dispute resolution for resolving disputes in the Benelux area. Last but not least, the parties to the Cooperation Agreement will explore the possibility of a uniform arbitration act for international arbitration seated in the Benelux area.
B.1 The Supreme Court denied enforcement of an ICSID Award in an intra-EU dispute on the ground of sovereign immunity from jurisdiction
In Romania v. Micula, the Cour de cassation quashed the enforcement of the Micula brothers’ award against Romania on the ground that the arbitration agreement in the Sweden-Romania Bilateral Investment Treaty (BIT), on which the Micula brothers relied, was devoid of any purpose when Romania accessed to the European Union in 2007.
This decision is in line with the ruling of the Court of Justice of the European Union (CJEU) in the Micula’s case issued on 25 January 2022. In that case, the CJEU found that the Treaty on the Functioning of the European Union precludes international agreement concluded between two member states which provides that an investor from one of those member states, in the event of a dispute concerning investments in the other member state, may bring proceedings against that other member state before an arbitral tribunal. Accordingly, any arbitration agreement included in such international agreement lacked any force from the date of accession of a member state in the EU.
From the CJEU’s ruling, the Luxembourg Supreme Court inferred that Romania’s accession to the EU nullified the arbitration clause in the Sweden-Romania BIT, and therefore, Romania did not waive its immunity from jurisdiction since that date. In consequence, the award cannot be enforced within the territory of the Grand-Duchy of Luxembourg.
B.2 Departing from previous case law, the Court of Appeal ruled that a pending criminal action can stay the enforcement of an award
In Republic of Kazakhstan v. ASCOM Group S.A. et al., the Court of Appeal decided to stay the proceedings of enforcement pending a criminal action lodged by the Republic of Kazakhstan. This is the second time that the Court of Appeal ruled on the request to set aside an order granting enforcement of an award in favor of ASCOM. In 2019, the Court of Appeal denied such request. However, that decision had been overturned by the Luxembourg Cour de Cassation. According to the Supreme Court, the Court of Appeal had violated due process when it admitted evidence of the Republic of Kazakhstan’s fraud allegations. Such evidence should have been discussed in adversarial proceedings (according to the principe du contradictoire).
In the present case, the Court of Appeal held that as a criminal investigation was pending in respect of the forged character of certain documents that had been relied on in the arbitral proceedings and in the enforcement proceedings before the Luxembourg courts, that later proceeding shall be stayed. The judges explained that pursuant to the principle that criminal proceedings took precedence over civil proceedings, when a decision to be taken in criminal proceedings is likely to influence the decision to be taken in civil proceedings, the civil action shall be stayed pending the outcome of the former. The Luxembourg judges concluded that if the criminal action found that the arbitral award had been influenced by fraudulent means by ASCOM and the other investors, the recognition and the enforcement of such award would be contrary to public policy under article V(2)(b) of the New York Convention. As a result, the criminal proceedings are likely to influence the enforcement decision.
B.3 Asian state entity’s asset has been unfrozen
On 24 January 2023, the District Court of Luxembourg set aside the attachments order previously granted to award creditors seeking to enforce a mega-award against an Asian state. The court found that as the award creditors failed to provide security or omitted to reveal their real addresses, the state will not be able to recover any costs or damages that might be awarded in the attachment.
 ECT, article 47(1).
 ECT, article 47(2).
 ECT, article 47(3).
 Cooperation Agreement between ACLCC, CEPANI, NAI, LAA (Luxembourg Arbitration Association), DAA (Dutch Arbitration Association), 8 September 2022.
 The Belgian Centre for Arbitration and Mediation.
 The Netherlands Arbitration Institute.
 Cour de cassation, case No. 116/2022, CAS number 2021-00061 of the register, 14 July 2022.
 CJEU, Case C-638/19 P, Viorel Micula and others v. Romania, 25 January 2022.
 TFEU, articles 267 and 344.
 Court of Appeal, Republic of Kazakhstan v. ASCOM Group S.A. et al., No. 108/21-III-Exequatur, No. CAL2018-00013 of the docket, 2 December 2021.
 District Court of Luxembourg hearing an application for interim relief, No. TAL-2022-06568 of the docket, 24 January 2023