KLEYR GRASSO contributes to the Chambers and Partners International Arbitration 2026 Global Practice Guide

Located at the heart of Europe and armed with a strong economy that attracts global investors and pushes companies to establish their corporate presence in its territory, Luxembourg presents itself as a highly favourable jurisdiction for international arbitration.

Particularly, following the introduction of the Law of 19 April 2023 (the “Luxembourg Arbitration Law”) amending Title I of Book III of the New Code of Civil Procedure (NCCP), which effects a large-scale reform of Luxembourg’s legal framework for domestic as well as international arbitration and further aims to improve flexibility, speediness and confidentiality, Luxembourg has effectively enhanced its attractiveness as a seat of international arbitration.

Similarly to most jurisdictions, traditional litigation before courts remains the predominant recourse when a dispute arises in Luxembourg. However, over the past several years, the number of arbitration cases has increased by over 60%, of which over 85% pertain to international arbitration matters where at least one party is located outside of Luxembourg.

Given Luxembourg’s standing as an international forum, parties commonly resort to it for the enforcement of arbitral awards. With its continuous efforts to promote itself as an arbitration-friendly jurisdiction, Luxembourg is increasingly serving as the seat for arbitral proceedings.

There are ongoing efforts to promote greater reliance on arbitration proceedings for disputes in the financial and banking sectors in Luxembourg. In recent years, there has been a marked increase in the number of contracts incorporating arbitration clauses and, as a result, international arbitration relating to investment fund disputes has become an indisputable trend.

This is largely attributable to Luxembourg’s expanding role as a global hub for the restructuring and management of such funds, its high concentration of cross-border transactions and its regulatory sophistication in such matters.

Specifically, Luxembourg is the largest investment fund centre in Europe, with net assets under supervision of over EUR6,731.3 billion. The abundance of such funds inevitably triggers disputes, and arbitration is therefore positioned as an attractive mechanism of alternative dispute resolution due to its enforceability, privacy and flexibility.

The Arbitration Center of the Luxembourg Chamber of Commerce, also known as the Luxembourg Arbitration Center (LAC), was established in 1987 and serves as the principal arbitral institution in Luxembourg for the administration and resolution of domestic and international disputes. The LAC is managed by its Council and assisted in its work by its Secretariat.

The LAC operates pursuant to its own set of procedural rules, namely the Rules of Arbitration of the Luxembourg Chamber of Commerce (the “LAC Rules”). The LAC Rules, which draw inspiration from the arbitration rules of the International Chamber of Commerce (ICC), were most recently updated effective from 1 October 2025, and are available on its official website in English as well as in French.

The LAC’s 2025 revision of the rules is the first since the modernisation of the Luxembourg Arbitration Law and introduces significant new features designed to streamline arbitral proceedings, notably by placing greater emphasis on electronic communications and broadening the use of videoconferencing for arbitral hearings.

In addition to its primary function of administering arbitration proceedings, the LAC is also committed to promoting arbitration in Luxembourg and provides support to regional arbitration associations such as the Think Tank for Arbitration and the Luxembourg Arbitration Association (LAA), a non-profit organisation dedicated to the promotion and development of arbitration practice in Luxembourg founded in 1996.

Apart from the LAC, prominent bodies such as the ICC, the London Court of International Arbitration (LCIA), the German Arbitration Institute (DIS) and the Belgian Centre for Arbitration and Mediation (CEPANI) are frequently employed in international arbitration cases in Luxembourg.

To further strengthen Luxembourg’s collaboration with foreign arbitral institutions, the Luxembourg Chamber of Commerce in 2022 signed, along with CEPANI, the Netherlands Arbitration Institute (NAI), the Dutch Arbitration Association (DAA) and the LAA, a co-operation agreement to promote arbitration in the Benelux area.

In Luxembourg, there are no specialised courts expressly designated to adjudicate disputes relating to international or domestic arbitration. Where an arbitration proceeding is pending, state courts are required to stay any identical cases submitted to them.

However, the Luxembourg Arbitration Law provides for the involvement of state courts in support of the arbitration process, particularly through the role of the supporting judge (juge d’appui), as set out in Articles 1229 and 1230 of the NCCP, which is inspired by French law. The Luxembourg provisions are also consistent with the Model Law on International Commercial Arbitration adopted in 1985 by the United Nations Commission on International Trade Law (the “UNCITRAL Model Law”), which has been transposed in over 100 countries and aims to harmonise arbitration law internationally.

The supporting judge, who is the President of the District Court sitting as in summary matters (Président du Tribunal d’arrondissement siégeant comme en matière de référé), may be seized either by one of the parties, by the arbitral tribunal or by one of its members, and has jurisdiction where any of the following conditions are met:

• the seat of the arbitration is Luxembourg;
• the parties have agreed that the arbitration will be governed by Luxembourg procedural rules;
• the parties have expressly conferred jurisdiction upon the Luxembourg courts in matters related to arbitration; or
• the dispute bears a significant link with Luxembourg.

In addition, the supporting judge may also intervene in various aspects of the arbitral proceedings in order to facilitate the process, such as in the appointment of arbitrators (see 4.3 Court Intervention) as well as in the issuance of interim and conservatory measures (see 6.2 Role of Courts).

The Luxembourg rules governing arbitration are codified within a dedicated section of the NCCP, specifically in Articles 1224 to 1251, as amended by the Luxembourg Arbitration Law which entered into force on 19 April 2023.

The Luxembourg Arbitration Law establishes mandatory provisions governing the conduct of arbitration. These include provisions on the matters that can be submitted to arbitration, the circumstances under which an arbitral award might be set aside and the enforcement of arbitration awards by an order of the President of the District Court, as well as the matters that are expressly excluded from arbitration.

Historically, the arbitration framework in Luxembourg was primarily inspired by French law. Presently, the Luxembourg Arbitration Law is also significantly influenced by the UNCITRAL Model Law.

Although the Luxembourg Arbitration Law and the UNCITRAL Model Law are largely aligned, certain nuances persist. For instance, the 2023 arbitration reform introduced a maximum duration of six months for the conduct of arbitral proceedings, a procedural requirement that is not included in the UNCITRAL Model Law.

On 19 April 2023, Luxembourg undertook a reform of its arbitration law, aimed at modernising the existing legal framework and aligning it with the expectations of market actors as well as international standards in alternative dispute resolution. The new text applies, in principle, to arbitration agreements concluded subsequent to 25 April 2023.

The reform introduced significant innovations aimed at enhancing the efficiency of arbitral proceedings. Among other things, the new text introduces the role of the supporting judge (see 1.4 National Courts) and creates a swift legal framework where the maximum duration of the arbitral proceedings is set, in principle, at six months.

In accordance with Article 1227 of the NCCP, the decision of parties to submit a dispute to arbitration is formalised in an arbitration agreement that may be concluded in the form of either an arbitration clause (clause compromissoire) concluded prior to any dispute, or a separate arbitration agreement (compromis) agreed upon subsequent to the emergence of the dispute.

There are no specific requirements that are imposed with respect to the form of such agreements, which may therefore be made verbally.

In this respect, the LAA regularly holds seminars aimed at raising awareness among practitioners and scholars regarding the essential elements to be included in arbitration clauses, with a view to ensuring clarity and minimising the risk of future disputes or procedural uncertainties relating thereto.

Under the Luxembourg Arbitration Law, the majority of civil and commercial matters may be validly referred to arbitration provided that they concern rights that are at a person’s free disposition.

In particular, pursuant to Article 1224 of the NCCP, disputes relating to the status and legal capacity of persons as well as matters concerning missing persons are excluded from the scope of arbitration.

Moreover, Article 1225 of the NCCP establishes that disputes pertaining to lease agreements, disputes between employers and employees, and disputes arising between professionals and consumers are not subject to arbitration.

Lastly, Article 1226 of the NCCP expressly provides that the commencement of insolvency proceedings does not affect the validity of arbitration agreements irrespective of whether those agreements were concluded prior to or following the commencement of such proceedings.

Nonetheless, disputes concerning the conduct or administration of the insolvency proceedings themselves may not be referred to arbitration.

State courts in Luxembourg respect the principle of party autonomy and apply the law chosen by the parties in their arbitration agreement. In the absence of such choice of law, the courts will apply the law they consider most appropriate in view of the circumstances of the case, taking into account relevant connecting factors (Article 1231 of the NCCP).

In accordance with well-established case law on the matter, national courts have consistently recognised the validity of, and given effect to, arbitration agreements. This reflects Luxembourg’s status as a jurisdiction that is supportive of international practices as well as its commitment to effectively integrating arbitration into its legal system.

Accordingly, national courts will decline jurisdiction over a dispute that falls within a valid arbitration agreement, save in limited circumstances where the agreement is null and void due to the non-arbitrable nature of the dispute, or if it is manifestly null and void for any other reason determined by the court.

Where a valid arbitration clause exists, a defendant’s failure to raise an objection to the state court’s jurisdiction at the commencement of the proceedings shall be regarded as a tacit waiver of the arbitration agreement. It is for this reason that a party wishing to raise an objection with respect to the court’s jurisdiction must do so at the very outset of the proceedings – ie, in limine litis (see 5.5 Breach of Arbitration Agreement).

The Luxembourg Arbitration Law expressly recognises the separability of arbitration agreements, as enshrined in Article 1227-2 of the NCCP. Pursuant to this principle, an arbitration clause is deemed to constitute an autonomous agreement, distinct and independent from the underlying contract in which it is embedded.

Settled case law has confirmed this approach, recognising that an arbitration agreement is separate from the primary contract and may be subject to different governing rules.

Consequently, the validity of the arbitration clause remains unaffected by any finding of nullity, voidness or rescission of the principal contract, thus safeguarding the arbitral tribunal’s competence to rule on its own jurisdiction as well as preventing dilatory tactics.

It is also pertinent to point out that this principle finds additional confirmation in Article 5(4) of the LAC Rules, which expressly empowers the arbitral tribunal to uphold the validity and enforceability of the arbitration agreement regardless of any allegation that the underlying contract is non-existent, null and void, or otherwise invalid.