21 July 2026 • 5 minute read
Luxembourg moves to strengthen its position as a forum for financial and high-value commercial litigation
On 12 May 2026, the Luxembourg Government submitted a draft bill1 proposing the creation of specialized chambers in economic and financial law within the Luxembourg courts.
If adopted, the reform would mark a significant development for Luxembourg as a dispute resolution forum.
For financial institutions, asset managers, funds, investors, depositaries, management companies and other market participants, the bill is more than an internal court-organisation measure. It is a clear signal that Luxembourg intends to align its dispute resolution infrastructure with the sophistication of its financial centre.
Specialized Chambers: Scope, Competence and Procedure
The draft bill would grant the Luxembourg District Court, sitting in commercial matters, exclusive national jurisdiction over a defined set of specialized economic and financial disputes. These include, among others, disputes relating to trusts and fiduciary contracts, financial collateral arrangements, professional payment guarantees, competition damages, trade secrets, securitization vehicles, SICARs, SIFs, UCIs/UCITS, AIFMs, RAIFs, EuVECAs, ELTIFs, money market funds and STS securitizations.2
For investment funds and other regulated investment structures, the specialized chamber would also have jurisdiction over disputes relating to the organisation of these entities, including contractual relationships between a fund and its management company or between a fund and its depositary bank. The bill does not, however, create a general “fund court” for any dispute involving a fund. A standard commercial dispute with no specific connection to the relevant financial legislation, such as a lease agreement entered into by a fund, would remain outside the scope.
The bill also introduces a number of procedural features designed to make the handling of financial disputes more efficient. Parties would be allowed to produce documents in English without translation, a practice already often accepted by Luxembourg courts in financial matters but now placed on a clearer statutory footing. Parties would also be convened to a preparatory hearing to set the procedural timetable, and cases wrongly brought before the Diekirch District Court would be referred to Luxembourg without requiring fresh proceedings.
Specialized criminal chambers in economic and financial law would be established at the Luxembourg District Court, the Diekirch District Court, and the Court of Appeal. These chambers extend the existing specialization at the prosecution and investigating judge level, and the bill further enshrines in law the creation of a dedicated economic and financial department and an AML/CTF service within the Parquet général (Attorney General's office).
The bill creates nine additional magistrate positions, evenly distributed between the Luxembourg District Court, the Diekirch District Court, and the Court of Appeal. The bill also provides for lists of magistrates specialized in economic and financial law, based on criteria including professional experience, relevant training and knowledge of English legal terminology. Specialized magistrates would also be subject to continuing training obligations in economic and financial law, English legal terminology, accounting and financial analysis.
What This Means for Forum Selection and Litigation Strategy
The reform may have an important impact on how market participants approach dispute resolution clauses and forum strategy in Luxembourg fund and finance documentation.
In Luxembourg-based structures, Luxembourg courts are already a natural forum for many disputes, particularly where the relevant vehicle, governing law or corporate/fund law issues are Luxembourg-based. The creation of specialized chambers should further reinforce the credibility of Luxembourg courts for high-value and technically complex disputes involving financial, accounting or fund governance issues.
This may be particularly relevant where parties are considering whether to provide for Luxembourg court jurisdiction or arbitration. The reform may make parties less reluctant to rely on Luxembourg courts for complex disputes involving investment funds, securitization vehicles, financial collateral arrangements, AIFMs, depositaries, management companies, fund administrators, investors and other financial-sector participants.
The bill remains subject to the legislative process. However, its direction of travel is clear: Luxembourg is seeking to ensure that its courts reflect the scale, sophistication and international profile of its financial centre. For market participants, this creates both opportunities and new litigation risks.
Timeline and Entry into Force
The bill was approved by the Government Council on 15 April 2026 and submitted to the Chambre des Députés on 12 May 2026. The opinion of the Conseil d'État has been requested. The new magistrate positions and chamber structures are planned to take effect on 16 September 2027. The bill remains at an early stage of the legislative process and may still be amended.
1Draft law No. 8748 amending: 1° the Commercial Code; 2° the New Code of Civil Procedure; 3° the amended law of 7 March 1980 on the organisation of the judiciary; 4° the amended law of 10 August 1992 on the protection of youth; 5° the amended law of 7 November 1996 on the organisation of the administrative courts; 6° the amended law of 27 July 1997 on the organisation of the Constitutional Court; 7° the amended law of 7 June 2012 on judicial trainees; 8° the amended law of 23 December 2022 on référendaires of the judiciary; 9° the law of 23 January 2023 on the organisation of the National Council for the Judiciary; 10° the amended law of 23 January 2023 on the status of judges; with a view to establishing specialised chambers in economic and financial law within the district courts and the Court of Appeal.
2For ease of reference, SICAR refers to a investment company in risk capital, SIF to a specialised investment fund, UCI/UCITS to undertakings for collective investment, AIFM to alternative investment fund manager, RAIF to reserved alternative investment fund, EuVECA to European venture capital fund, ELTIF to European long-term investment fund, MMF to money market fund and STS to simple, transparent and standardised securitizations.