Luxembourg
Answer ... The Securitisation Law governs securitisation in Luxembourg. It provides that:
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the law governing the assigned claim determines:
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- its assignability;
- the relationship between the assignee and the debtor;
- the conditions for the debtor;
- the conditions under which the assignment may be relied on against the debtor; and
- the nature of the discharge of the performance by the debtor; and
- the law of the state in which the assignor is situated governs the conditions under which the assignment may be relied upon against third parties.
Luxembourg often deals with securitisations involving foreign laws, such as English law, and the relevant receivables are typically transferred under the relevant foreign laws. The EU Rome I Regulation (593/2008) on the law applicable to contractual obligations also applies.
Luxembourg
Answer ... As provided for by EU Regulation 2016/1191 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union, public documents (eg, regarding birth, domiciliation, nationality) – whether originals or certified copies issued by the authorities in an EU country – are accepted by the authorities of another EU country as authentic without an apostille stamp to prove their authenticity. An official translation of such documents is not required if they are written in one of the official languages of the EU country in which they are presented. Otherwise, the authorities of the EU country that issued the documents will provide a multilingual standard form. Luxembourg is also a party to the Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents from the Hague Conference on Private International Law.
Where a foreign document is presented in litigation, depending on the law(s) governing the transferred assets and on the types of assets transferred, the Luxembourg courts will apply the EU rules, such as Rome I, the EU Brussels 1bis Regulation (1215/2012) or the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters from the Hague Conference on Private International Law.
Luxembourg
Answer ... According to the Civil Code, the assignment of a claim against a third party is effective between the assignor and the assignee by the exchange of consents. The assignment is only enforceable against the debtor of the assigned receivables (and against third parties) by the notification to, or the acceptance by the debtor of, the assignment of the claim. The notification and/or acceptance of such assignment shall be made either by a notarial deed or by a private document. If, before the assignor or assignee notifies the debtor of the assignment of the claim, the debtor has paid the assignor, it will be validly discharged, unless it is proved that it otherwise had knowledge of the assignment. The sale or assignment of a claim will typically also include the accessories to the claim, such as guarantees, liens and mortgages.
A person that sells a claim or other tangible right must guarantee its existence at the time of the assignment, even if it is made without security. It will be liable for the solvency of the debtor only where it has undertaken to do so, and only up to the amount of the price it has obtained from the claim. Where it has promised to guarantee the debtor’s solvency, this promise refers only to present solvency and does not extend to the future, unless the assignor has expressly stipulated this.
Luxembourg
Answer ... According to the Securitisation Law, the assignment of an existing claim to or by a securitisation undertaking becomes effective between the parties and against third parties as from the moment the assignment is agreed upon, unless the contrary is provided for in such agreement.
A future claim which arises from an existing or future agreement can be assigned to or by a securitisation undertaking, provided that it can be identified as being part of the assignment at the time it comes into existence or at any other time agreed between the parties. The assignment of a future claim is conditional upon its coming into existence; but when the claim does come into existence, the assignment becomes effective between the parties and against third parties as from the moment the assignment is agreed on, unless the contrary is provided for in such agreement, notwithstanding the opening of bankruptcy proceedings or any other collective proceedings against the assignor before the date on which the claim comes into existence.
The claim assigned to a securitisation undertaking becomes part of its estate as from the date on which the assignment becomes effective, notwithstanding any undertaking by the securitisation undertaking to reassign the claim at a later date. The assignment cannot be recharacterised on grounds relating to the existence of such an undertaking.
The assignment to or by a securitisation undertaking entails, unless otherwise agreed:
- the transfer of the guarantees and security interests securing such claim; and
- its enforceability by operation of law against third parties, without any further formalities.
The assigned debtor is validly discharged from its payment obligations by payment to the assignor as long as it has not gained knowledge of the assignment.
An assignment prohibited by the agreement from which the assigned claim arises or which for other reasons does not comply with the provisions of such agreement is not effective against the assigned debtor unless:
- the assigned debtor has agreed thereto;
- the assignee legitimately ignored such non-compliance; or
- the assignment relates to a monetary claim.
The articles of incorporation, the management regulations of the securitisation undertaking, an assignment agreement or any other agreement may grant the assignor a right over all or part of the assets of the securitisation undertaking which are available after payment of all other creditors.
Luxembourg
Answer ... The Securitisation Law provides that the assignment by the securitisation undertaking of the acquired receivable cannot be recharacterised.
Luxembourg
Answer ... If the assignor or the third party to which the collection of claims has been entrusted becomes subject to insolvency proceedings – such as bankruptcy, controlled management, judicial liquidation or any other proceedings affecting the rights of creditors generally – the securitisation undertaking is entitled to claim any sums collected on its behalf prior to the opening of such proceedings, without the other creditors having any rights to such amounts and notwithstanding any claims raised by the bankruptcy receiver, the controlled management commissioner or the liquidator.
The articles of incorporation, the management regulations of a securitisation undertaking and any contract entered into by the securitisation undertaking may contain clauses whereby investors and creditors undertake:
- not to seize the assets of the securitisation undertaking or, as the case may be, of the acquiring or issuing undertaking; and
- not to file for bankruptcy or request the opening of any other collective or reorganisation proceedings against them.
The assignment of a future claim is conditional upon its coming into existence; but when the claim does come into existence, the assignment becomes effective between the parties and against third parties as from the moment the assignment is agreed on, unless the contrary is provided for in such agreement, notwithstanding the opening of bankruptcy proceedings or any other collective proceedings against the assignor before the date on which the claim comes into existence.