Luxembourg, Luther SA updates

Litigation

Contributed by Luther SA
Court of Appeal specifies consequences of rescinding contracts
  • Luxembourg
  • 21 May 2019

The buyer of an apartment signed a long-term lease and agreed to live in the apartment for at least 12 years. However, in contravention of this commitment, the buyer moved out and rented the property to a tenant. The seller sued the buyer, seeking to have the contract rescinded. In its decision, the Court of Appeal ruled that the contract had been divided into a contract of sale and a lease contract, and that the retroactive rescission principle would have a different effect on each of these.

Court of Appeal rules on enforcement of pledge versus insolvency proceedings and fraud
  • Luxembourg
  • 16 April 2019

A Court of Appeal decision appears to have definitively removed any possibility of effectively challenging a transfer of ownership of pledged assets in an enforcement scenario on the basis of fraud, including manifest fraud by the pledgee. This is in contrast to a 2013 Luxembourg District Court decision and the general practice to date, which has been to consider the facts on a case-by-case basis.

Luxembourg District Court defines conditions of minority abuse at shareholders' meetings
  • Luxembourg
  • 09 April 2019

In a notable decision, the Commercial Section of the Luxembourg District Court clearly defined – for the first time – the concept of minority abuse at shareholders' meetings under Luxembourg law. Further, the court detailed the conditions which must be met in order for conduct to qualify as minority abuse. This decision is of particular interest, as the alternative conditions for determining whether minority abuse has taken place are much broader than those initially set out in Luxembourg law.

Court of Appeal rules on testimony of executive board members
  • Luxembourg
  • 12 March 2019

In a dispute between a public limited liability company and one of its employees, the Court of Appeal issued a decision concerning the testimony of executive board members of a party to a dispute. The court's decision contradicts case law that seemed to have overcome this problem with regard to public limited liability companies. Hence, the courts remain divided as to whether the testimony of a director who individually has no power to represent their legal entity will be taken into consideration.

Court of Appeal rules on interpretation of court decisions
  • Luxembourg
  • 16 October 2018

The plaintiff in a recent Court of Appeal case concerning the enforcement of a pledge on shares given to a bank as part of a financing believed that the court's original decision was unclear. It consequently asked the court to clarify whether the decision ordering the return of the shares entailed that the plaintiff should be considered a shareholder from the date on which the bank had unlawfully acquired the shares or effectively returned them to the plaintiff.


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