No Exequatur Needed for Private Acts in Luxembourg

On 4 April 2025, the Luxembourg District Court issued an interesting judgment discussing the conditions to have legal standing (intérêt à agir) and to recognize foreign judgments in Luxembourg. The ruling will be helpful for practitioners who regularly deal with the effects of foreign judgments in Luxembourg.

 

Facts

In March 2024, the High Court of Justice in London approved the restructuring of different tranches of a financing under Part 26A of the Companies Act 2006 (Plan). It involved three companies formed in Luxembourg, one of which was referred to as the “Plan Company” (English Judgment).

The plaintiffs, acting for some dissident creditors of the Plan, sought to prevent any act of execution of the English Judgment from being carried out in Luxembourg, arguing that it should first be recognized through exequatur in Luxembourg.

 

Exequatur

After having detailed the conditions to prove legal standing for a person (in the case at hand, the interest of the plaintiff in putting an end to the English Judgment), the court reminded that an exequatur is a judicial procedure by which a foreign judgment is recognized and declared enforceable in Luxembourg.

With no international convention or European regulation, a foreign judgment has to be declared enforceable by a Luxembourg court before it can be executed in Luxembourg, according to Article 678 of the New Code of Civil Procedure (Nouveau Code de Procédure Civile).

The court set an important and useful distinction though:

• Acts requiring a law enforcement authority: the court explained that only acts of execution requiring the legitimate intervention of public force, such as seizing an asset or auctioning private assets, require the prior exequatur of the relevant foreign decision. This means that the foreign judgment has to be validated by Luxembourg courts before these coercive measures can be carried out.

• Private acts: private acts, even if legally binding, don’t require prior exequatur of the relevant foreign decision. Examples include the transcription of the release of a pledge or the transfer of shares in a company’s shareholders’ register. These acts can be performed directly without judicial validation of the foreign decision.

 

The court’s reasoning

The court analysed whether the situation caused by the English Judgment gave rise or was likely to give rise to a disturbance to the plaintiffs, and whether the measures requested by the plaintiffs are likely to stop or prevent such a disturbance or improve their legal situation.

The court noted that the Plan and the English Judgment have repercussions on the plaintiffs (as they extinguish the plaintiffs’ claims against the debtor). But no acts of execution have occurred or will occur in Luxembourg considering the actual circumstances of the case. So the court concluded that there’s no direct impact on Luxembourg territory that would justify the plaintiffs’ request. The court further upheld that some of the plaintiffs’ requests were related to private acts, not requiring the intervention of public force so no exequatur was needed.

Accordingly, without any material acts of execution on Luxembourg territory, the plaintiffs’ requests were declared inadmissible by the court due to the lack of legal standing on the part of the plaintiffs.

 

Conclusion

This decision reaffirms the stringent criteria to justify legal standing in Luxembourg’s judicial system. And it sets a significant precedent for future cases involving the execution of foreign judgments in Luxembourg.

It recognizes a summa divisio between acts requiring, or not, a law enforcement authority. The Luxembourg Court has clarified when an exequatur is needed. Only acts of execution involving constraint or coercion by public authorities require prior validation by a Luxembourg court. Private acts don’t.

This judgment helps clarify the nuances of an exequatur. It also establishes an interesting precedent to assess the effects of a foreign judgment and enhances the predictability and effectiveness of the Luxembourg judicial system.