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Arbitration agreements

What are the validity requirements for an arbitration agreement?

The legal requirements governing arbitration agreements are set out in Articles 1224 to 1251 of the New Code of Civil Procedure.

These provisions make no distinction between the domestic or international nature of the case in commercial or civil matters.

The parties may either:

  • agree in advance, by means of an arbitration clause, to submit to arbitration any dispute that arises in relation to specific matters; or
  • enter into an arbitration agreement once a dispute has already arisen.

The arbitration agreement or arbitration clause must be accepted by both parties; otherwise, it may be declared void.

Arbitration agreements can be concluded before the arbitrators, by notarial deed or by written agreement (Article 1226 of the New Code of Civil Procedure). Arbitration agreements concluded ex ante need not be executed in writing, as long as written evidence can be provided showing that the parties have agreed to resolve their disputes through arbitration.

Article 1227 of the New Code of Civil Procedure further provides that the arbitration agreement must specify the subject of the dispute and the arbitrators' names in order to be valid. 

Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

Luxembourg case law has consistently confirmed the compulsory nature of arbitration clauses. The domestic courts will thus decline jurisdiction when they are faced with an arbitration clause invoked by one of the parties.    

Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

Consolidation will primarily depend on the arbitration rules chosen by the parties, as the New Code of Civil Procedure is silent on this issue.  

Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

In most cases the parties will have agreed on the substantive law governing their agreement. In principle, the law applicable to the substance of a dispute is thus determined by the parties to the arbitration agreement, which will freely decide on the law applicable to the merits of the case. 

Otherwise, the arbitrators will choose the substantive law according to the rules applicable under private international law. The New Code of Civil Procedure contains no provisions on how the tribunal should decide on the substantive law of the dispute. 

Are there any provisions on the separability of arbitration agreements?

No. In 2003 the Court of Appeal ruled that an arbitration clause is ancillary to the principal contract and must thus be declared void where the principal contract is declared void.   

Multiparty agreements
Are multiparty agreements recognised?

Yes. In the case of a multi-party dispute, where more than two parties have different interests, Article 1227 of the New Code of Civil Procedure provides that they must reach agreement on the appointment of three arbitrators. If they fail to do so, the president of the district court will appoint the arbitrators on the request of one of the parties.  

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