1) Does Luxembourg law have any general purchase or sale conditions? Is there a list of general terms which are prohibited by law?

 

By a law dated 26 November 1996, Luxembourg has ratified the United Nations Convention on international goods sales contracts dated 11 April 1980.

Luxembourg has also transposed (by a law dated 21 April 2004) into national law the EC directive 1999/44 regarding certain aspects concerning purchase and guarantees of consumable goods.

Luxembourg law does not provide any general termes and conditions. The only legal provision is Article 1135-1 of the Luxembourg Civil Code, which states that general conditions of a contract that is pre-established by one of the parties may only be opposed to the other contracting party if the latter has been able to know them at the signature of the contract or may be considered, due to the circumstances, to have accepted them. Contractual provisions are considered “pre-established” if they have been written by one of the parties and if the other party had not influenced their content. This provision applies to B2B and B2C contrats.

Luxembourg law (dated 25 August 1983 on legal protection of consumers) also foresees a list of 24 general terms which are considered to be excessive and improper. This provision applies to contracts between professionals and consumers, and also covers any provision that causes an imbalance in the rights and obligations to the consumer’s detriment.

  

2) How many times the creditor needs to demand payment from de debtor? In what way has this request to be sent to the creditor?

 

By virtue of Luxembourg Civil Code (article 1146), the debtor has to perform his obligation the day specified by the parties or one of the parties by virtue of a special right that it has. The debtor is ordered to perfom by the effect of the sole expiry of this day. This is the case for instance if the general terms and conditions, duly accepted by the debtor, foresee a payment period.

Before being able to ask for interests and damages relating to late payment, the creditor has to issue and send to the debtor a formal order to pay. This formal order constitutes an express warning that the creditor waits for the payment andreserves the right to ask for the resolution of the contract. Only after issuing such a formal order, the creditor may claim any damages, for example a special indemnity equal to 15 % of the principal amount.

In practice, the creditor sends a reminder (after the payment period) and then a formal order to pay,

There are no formal requirements for reminders.

Formal orders to pay have to be sent by registered letter or by a bailiff.

The debtor may refuse to pay, arguing that he has never received the invoices, if these were not sent by registered letter.

The Luxembourg Commercial Code (Article 109) issues the general principle that the debtor has to dispute invoices and that non disputed invoices are deemed to be accepted by the debtor.

The dispute has to be issued by the debtor in a very short time. Jurisprudence is saying that a thirty day period should be enough to dispute invoices.

 

 

3) Before which judicial authority should legal proceedings be instituted?

 

Court procedures have to be introduced before the Justice of the Peace (for disputes up to 10.000 euros) or the District Court (for disputes above 10.000 euros).

Appeals against first instance decisions may be introduced before the District Court (for appeals against Justice of the Peace judgments) or the Appeal Court (for appeals against District Court judgments).

Territorial jurisdiction depends on the debtor’s domicile or the place of performance of the contractual obligation. There are three Justices of the Peace (in Luxembourg, Diekirch and Esch/Alzette) and two District Courts (Luxembourg and Diekirch).

 

 

4) How do the legal proceedings work in Luxembourg?

 

There are several ways to proceed.

Before the Justice of the Peace (if the total claim is up to 10.000 euros), the first way is to request a court order. If the Justice of the Peace accepts to issue the court order on the view of the file presented to him bay the creditor, the court order is sent to the debtor, who has 10 days to dispute the court order. In this case, the file is taken to an ordinary court audience, where the creditor and the debtor exchange their arguments. This process will be closed by a judgment. If the debtor chooses not to dispute the court order, the creditor may request from the judge a binding title, which is sent to the debtor and constitutes a judgment. Appeals against judgments (in the two cases) are possible, but have to be issued at last forty days after the notification of the judgment. There is no need of a bailiff in this process, because all notifications are made by the justice secretary.

The second way is to proceed by a writ of summons, which is delivered by a bailiff (costs ca. 100 euros) to the debtor and contents order to appear in a public audience of the Justice of the Peace. In this first audience, if the debtor chooses not to be represented by a lawyer, the pleadings will take place directly. If the debtor chooses to be represented by a lawyer, the date of the peladings will be fixed, and in this subsequent audience (4 to 6 weeks later), the pleading between the two lawyers will take place. The Justice of the Peace will issue a judgment, normally 8 to 21 days after the pleadings. An appeal against this judgment is possible, but has to be issued at last forty days after the notification of the judgment (by a bailiff , costs ca. 100 euros) to the debtor.

Before the District Court (if the total claim is more than 10.000 euros), the same two procedures may apply. In the second procedure, the creditor and the debtor have to be represented by a lawyer. This procedure is also a little bit longer (up to 12 to 18 months).

This is why a third procdure may be choosen for this sort of claims. It is an urgent summons (by bailiff) before the President of the District Court (or his substitute), where the first audience can take place within 3 or 4 days, and a court order issued (after pleadings in a public audience of the President) within 14 days. This will be a provisional, but binding order, which allows to proceed by force against the debtor.

 

 

5) What are the expenses (incidental) to legal proceedings? The costs of being represented by a lawyer? The court registry fees and the costs of proceedings? The costs which are made by the bailiff?

Plus other propable costs which are necessary during the judicial process?

 

In Luxembourg, lawyers are free to fix their fees. There is no general tariff, but lawyers in practical determine the amount of their fees according to the time spent, the result of their intervention, the importance of the case and the client’s financial situation. Lawyer fees are not taken over by the defaulting party. A legal provision of the New Civil Procedure Code (article 240) however allows judges to allocate to the winning party a special indemnity destinated to cover part of their lawyer fees. The amount of the indemnity depends on the judge, but rarely amounts over 500 to 800 euros.

Except in civil cases before the District Court, there are no court registry fees and no proceedings costs.

Bailiff costs amount ca. 150 euros (as well for the writ of summons, as the notification of judgments).

 

 

6) How does the procedure of notifying the debtors default work? What are the conditions before a debtor is in cuplable neglected/or is to be considered to be in default?

 

Against debtors who do not appear before court, the judge will issue a first judgment. Against this judgment, the debtor may issue an act of opposition, at last 10 days after the notification of the judgment. In this case, the same judge will have to decide on the case.

If no act of opposition is issued, the judgment may only be disputed by an appeal (at last forty days after the notification of the judgment). In this case, the case is taken to an upper court (as specified before).

The debtor is considered to be in default, if the payment period has expired or if he has not reacted to a formal order to pay sent by the creditor.

 

 

7) How does the creditor have to handle, in case that he is entitled to enforcement? Can he take measures preventing the debtor of alienating property? How does the creditor have to handle after the judgment has been deliverd. Can he enforce a judgment? How does this come into effect?

 

If no appeal has been made against the judgment, this judgment will constitue a binding title which may be enforced against the debtor.

The enforcement lies in the competence of the bailiff. His fees are taken over by the debtor in the course of the enforcement process.

Several measures may be taken to prevent debtors from alienating their property. For example, seizure of bank accounts, seizure of movables and buildings, seizure of goods which are in the hands of third parties. Procedures can be complicated (especially for buildings and goods in the hand of third parties), but seizure of bank accounts and movables may be operated in a very short laps of time.

 

 

8) Is it possible to enforce a judgement immediatley or are there other obstacles the creditor has to considerate?

 

Judgments may only be enforced if their are definitive. This means, that no enforcement is possible in the appeal period.

By exception, a provisional binding title may be requested and obtained by the creditor, for example in the urgent summons procedures before the President of the District Court. This binding title, after the appeal, may be enforced directly.

 

 

9) Regarding the payment of interest, which are the statutory rates to which the creditor is entitled?

 

The subject matter is governed by the Luxembourg law dated 18 April 2004, which has transposed into national law the EC directive 2000/35 dated 29 June 2000.

 

For B2B transactions, interests are due automatically at the expiry date of the payment period agreed between the parties. The rate is the European Central Bank rate, increased by 7 %.

 

Rates:

2004 (1st semester):    9,02 % (publ. 21 October 2004)

2004 (2nd semester):   9.01 % (publ. 21 October 2004)

2005 (1st semester):    9,09 % (publ. 28 January 2005)

2005 (2nd semester):   9,05 % (publ. 19 October 2005)

2006 (1st semester):    9,25 % (publ. 9 February 2006)

2006 (2nd semester):   9,83 % (publ. 28 August 2006)

2007 (1st semester): 10,58 % (publ. 2 February 2007)

2007 (2nd semester): 11,07 % (publ. 28 September 2007)

2008 (1st semester):  11,20 % (publ. 19 May 2008)

2008 (2nd semester): 11,07 % (publ. 25 July 2008)

2009 (1st semester):   9,50 % (publ. 6 February 2009)

2009 (2nd semester):  8,00 % (publ. 3 August 2009)

2010 (1st semester):   8,00 % (publ. 9 February 2010)

 

For B2C transactions, interests are due automatically 3 months after the provision or services or the delivery of goods. The conditions are that the invoice is sent to the consumer within one month after the provision of services or the delivery of goods, and that the invoice mentions that the creditor wants to benefit from the legal provisions. The interest rate is fixed every year by a Grand-Duke regulation.

 

Rates:

2004 (year): 4,75 %

2005 (year): 4,75 % (regulation dated 7 April 2005)

2006 (year): 5,00 % (regulationd dated 29 May 2006)

2007 (year): 5,25 % (regulation dated 22 December 2006)

2008 (year): 5,75 % (regulation dated 19 December 2007)

2009 (year): 4,25 % (regulation dated 22 January 2009)

2010 (year): 3,50 % (regulation dated 5 February 2010)