LexGo

New act on professional payment guarantees
15/07/2020

The law of 10 July 2020 on professional payment guarantees has just been published and will enter into force on 17 July 2020. It provides for the creation of a new type of payment guarantee (garantie professionnelle de paiement) under Luxembourg law which will supplement the existing range of guarantees, such as the suretyship (cautionnement) and the first demand guarantee (garantie à première demande), and provides greater freedom of contract and flexibility for parties in the context of personal guarantees governed by Luxembourg law.

The law defines a professional payment guarantee as a commitment whereby a guarantor undertakes to pay a beneficiary, at the request of the latter or an agreed third party, an indicated amount, in connection with certain claims or related risks.
The guarantor can be either a legal entity (with or without legal personality) or a natural person.
Although not expressly provided for by the new law, the new professional payment guarantee can cover all claims, regardless of their nature or origin, provided they are identified or identifiable, subject to the limits imposed by rules of public policy.
Parties can contractually determine the terms of the professional payment guarantee, such as the amount, the duration, the conditions for payment under the guarantee, etc. 
One noteworthy characteristic is that the professional payment guarantee can be granted in favor of a (security) agent or trustee acting on behalf of (identified or identifiable) third-party beneficiaries, as is already the case for security granted under the Luxembourg Collateral Act of 5 August 2005. This feature makes the new guarantee a useful tool in the context of multi-lender credit transactions whereby a security agent typically holds the security/guarantee for the benefit of all secured parties.
Unless the parties agree otherwise, the guarantor remains liable to the fullest extent under the professional payment guarantee, even if the debtor is subject to a reorganization, liquidation or other national or foreign measure affecting the rights of creditors.
The new guarantee is only available if the parties expressly provide for its application in their guarantee agreement, which must be in writing (including in electronic form or any other durable medium). This requirement is intended to eliminate the risk of recharacterisation of the guarantee. Parties can make an existing personal guarantee subject to the new legislation by amending their agreement to include an express reference to the law. 

The new law on professional payment guarantees, which aims to create greater freedom of contract whilst ensuring legal certainty in the provision of personal guarantees governed by Luxembourg law, is undoubtedly a welcome addition, especially in times of heightened uncertainty, and demonstrates once again Luxembourg's attractiveness as a forward-looking and business friendly financial centre.

Zie ook : Nautadutilh Avocats Luxembourg Sàrl ( Mrs. Josée Weydert ,  Mr. Romain Sabatier ,  Mrs. Margaretha (Greet) Wilkenhuysen )

[+ http://www.nautadutilh.com]

Mrs. Josée Weydert Mrs. Josée Weydert
Managing Partner
[email protected]
Mr. Romain Sabatier Mr. Romain Sabatier
Partner
[email protected]
Mrs. Margaretha (Greet) Wilkenhuysen Mrs. Margaretha (Greet) Wilkenhuysen
Partner
[email protected]

Click here to see the ad(s)
Alle artikels Bank -en Krediet recht

Laatste artikels Bank -en Krediet recht

Comparability of Investment Funds – another Finnish referral to the Court of Justice of the Eur...
22/10/2021

Recently, an Advocate General’s opinion (the “Opinion”) on Finnish CJEU case C-342/20 (the “Case&r...

Comparability of Investment Funds – another Finnish referral to the Court of Justice of the European Union – another positive signal Read more

New rules on material IT outsourcing in the financial sector
15/10/2021

Effective 15 October 2021, financial institutions must notify the CSSF of any planned outsourcing of material IT activitie...

Read more

Payments services and e-money | New delegated regulation
15/10/2021

On 28 September 2021, the Commission Delegated Regulation (EU) 2021/1722 of 18 June 2021 (the “Regulation”), s...

Payments services and e-money | New delegated regulation Read more

Performance fees: the CSSF digitalises data collection
12/10/2021

Investment fund managers must report to the CSSF on the performance fee models used by all Luxembourg UCITS and AIFs that ...

Performance fees: the CSSF digitalises data collection Read more

Laatste artikels van Mrs. Josée Weydert

New rules on material IT outsourcing in the financial sector
15/10/2021

Effective 15 October 2021, financial institutions must notify the CSSF of any planned outsourcing of material IT activitie...

Read more

Applicability of law on financial collateral agreements to insolvency proceedings
17/06/2021

The law of 5 August 2005 on financial collateral agreements, as amended (the 2005 law), provides an attractive legal frame...

Read more

Bill amending the Luxembourg Securitisation Act published
28/05/2021

Bill No 7825 (the Bill), which aims, amongst other things, to amend the Act of 2 March 2004 on securitisation, as ame...

Read more

New bill brings Luxembourg to the forefront of distributed ledger technology
17/03/2021

On 22 January 2021 Parliament approved Bill 7637, which modified:  the Law of 5 April 1993 on the financial sec...

Read more

Laatste artikels van Mr. Romain Sabatier

Extension of the possibility to organise virtual shareholder and board meetings and suspension of...
02/07/2021

The Act of 30 June 2021 has extended the possibility for Luxembourg-based companies to hold virtual board and shareholder ...

Read more

Long-awaited bill clarifying and confirming the financial assistance prohibition
19/03/2021

Long-awaited bill clarifying and confirming that the financial assistance prohibition of the Companies Act does not apply ...

Read more

Luxembourg establishes a register of fiducies and trust
24/07/2020

The Act of 10 July 2020 ("the Act") transposes into Luxembourg law the last part of the fourth Anti-money Launde...

Read more

The Luxembourg UBO Register: the end of the transition period is fast approaching (31 August 2019)
08/07/2019

The UBO Register Act, which entered into force on 1st March 2019, provides for a six-month transition period to submit inf...

Read more

Laatste artikels van Mrs. Margaretha (Greet) Wilkenhuysen

Extension of the possibility to organise virtual shareholder and board meetings and suspension of...
02/07/2021

The Act of 30 June 2021 has extended the possibility for Luxembourg-based companies to hold virtual board and shareholder ...

Read more

Long-awaited bill clarifying and confirming the financial assistance prohibition
19/03/2021

Long-awaited bill clarifying and confirming that the financial assistance prohibition of the Companies Act does not apply ...

Read more

COVID-19 - Virtual shareholder and board meetings allowed until 31 December 2020
25/09/2020

Virtual shareholder and board meetings allowed until 31 December 2020

Read more

Luxembourg establishes a register of fiducies and trust
24/07/2020

The Act of 10 July 2020 ("the Act") transposes into Luxembourg law the last part of the fourth Anti-money Launde...

Read more

LexGO Network