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No. 85 / 2023
of 29.06.2023
Registry number CAS-2022-00101

Public hearing of the Court of Cassation of the Grand Duchy of Luxembourg on

Thursday, June twenty-ninth, two thousand and twenty-three.

Composition:

Théa HARLES-WALCH, Counselor at the Court of Cassation, President,

Christiane JUNCK, adviser to the Court of Cassation,
Agnès ZAGO, counselor at the Court of Cassation,
Marie-Laure MEYER, Counselor at the Court of Cassation,
Laurent LUCAS, Counselor at the Court of Appeal,

Daniel SCHROEDER, Registrar at the Court.

In between

the California limited liability company CORPORATION1.) LLC, established and having
its registered office at ADDRESS1.), represented by the manager, registered in the
Californian corporate registry under number NUMBER1.),

petitioner in cassation,

appearing by the limited liability company LOYENS & LOEFF

LUXEMBOURG, listed on list V of the roll of the Luxembourg Bar Association, in whose
study domicile is elected, represented for the purposes of these proceedings by Maître
Véronique HOFFELD, attorney at the Court,

And

1) the limited liability company under California law COMPANY2.) LLC, established and
having its registered office at ADDRESS2.), represented by the management bodies, having
as agent for service of process COMPANY3.) INC.4, Venture,
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Suite 280, Irvine, CA 92618, California, United States of America, registered in the California
Companies Registry under number NUMBER2.),

defendant in cassation,

appearing by the limited liability company E2M, registered on list V of the table of the
Luxembourg Bar Association, in whose study domicile is elected, represented for the purposes of
these proceedings by Maître Max
MAILLET, lawyer at the Court,

2) the limited liability company under Luxembourg law SOCIETE4.), established and having its
registered office at L-ADDRESS3.), represented by the board of managers, registered in the trade
and companies register under number NUMERO3.), currently without known head office,

defendant in cassation.

_____________________________________________________________

Having regard to the judgment under appeal, number 120/22 - VII - REF, delivered on
June 22, 2022 under number CAL-2022-00252 on the roll by the Court of Appeal of the Grand Duchy of
Luxembourg, seventh chamber, sitting in matters of summary appeal;

Considering the factum in cassation served on October 7, 2022 by the Californian limited
liability company COMPANY1.) LLC to the Californian limited liability company COMPANY2.) LLC
and to the limited liability company COMPANY4.), filed on October 10, 2022 at the office of the
Superior Court of Justice;

Having regard to the statement in response served on November 28, 2022 by the company
SOCIETE2.) to the company SOCIETE1.) and to the company SOCIETE4.), filed on December 6,
2022 at the Court Registry;

Having regard to the memorandum entitled " memorandum in reply " served on March 20,
2023 by the company SOCIETE1.) to the company SOCIETE2.) and to the company SOCIETE4.),
filed on March 27, 2023 at the Court Registry;

On the conclusions of the attorney general Nathalie HILGERT.

On the admissibility of the appeal

The company SOCIETE2.) concludes that the appeal is inadmissible for having been filed
late on the grounds that the judgment under appeal would have been served on July 7, 2023 at the
elected domicile of the plaintiff in cassation, that this notification would entail the removal of the
distance period and that the appeal served on October 7, 2023 would have

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was filed on October 10, 2023, i.e. more than two months after the deadline provided for in Article
7, paragraph 1, of the amended law of February 18, 1885.

The plaintiff claims that the appeal is admissible, arguing that she had not elected domicile
with her agent and that in any event the election of domicile would not result in the loss of the
benefit of the distance period.

The choice of domicile is not presumed.

It does not appear from the documents to which the Court may have regard that the
company SOCIETE1.) has elected domicile with its agent or that the latter has indicated its
agreement to service at its domicile, so that proof of an election of domicile at the address of the
agent has not been established.

In the absence of notification of the judgment, the appeal filed on October 10, 2023 at the
Registry of the Court was done within the legal time limit.

It follows that the appeal, introduced for the remainder in the formalities of the law, is
admissible.

On the facts

According to the judgment under appeal, a vice-president of the district court of

Luxembourg, sitting as judge in chambers in replacement of the president of the same court, seized
by the company SOCIETE1.) of a claim directed against the companies SOCIETE2.) and
SOCIETE4.) seeking to have article 932, paragraph 1, of the New Code of Civil Procedure named
together, if not article 933, paragraph 1, of the same code, a receiver to receive, keep and
administer 100 shares of the company SOCIETE4.), held by the company SOCIETE2.), but
claimed by the plaintiff in cassation and to exercise the voting rights attached thereto, had said the
requests inadmissible. The Court of Appeal upheld this decision.

On the second plea of cassation which is preliminary

Statement of means

“Lack of grounds by contradiction of grounds

Alleged violation of Article 89 of the Constitution;

in that the Court of Appeal held that the appeal filed by SOCIETE1.) was unfounded,
confirming the order of February 15, 2022 No. 2022TALREFO/ 00063 of the roll, on the grounds
that the disputed shares for which the plaintiff in cassation had requested the sequestration had to
"be threatened with irretrievable disappearance without hope of recovery in kind or in value" for the
condition of urgency within the meaning of the article 932, par . 1 of the New Code of Civil
Procedure (hereinafter << NCPC >>) is fulfilled, while considering that << a

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such a risk is not characterized by the company COMPANY1.), which on the contrary focuses
on the problems of decision-making at the level of the general assembly of the company
COMPANY4.) which according to it would be caused by the behavior of the company
COMPANY2.) and would be likely to affect the company COMPANY4.). Although the Court
cannot rule out the hypothesis that the management problems within the company SOCIETE4.)
may in the long term be of such a nature as to affect the value of the shares of the company
SOCIETE4.), and therefore the 100 shares under discussion, it does not follow that the urgency
is characterized in relation to these 100 shares >>;

whereas, with regard to the existence of a risk of imminent damage within the meaning
of Article 933, para. 1 of the NCPC, the judgment under appeal held that, since "it is common
ground in question that the company accounts for the years 2020 and 2021 have not been
adopted and published, that the company SOCIETE4.) is currently devoid of governing bodies
and that it would be deprived from June 24, 2022 of its registered office", "this situation constitutes
a violation of the relevant provisions of the LSC likely to lead to the judicial liquidation of the
company SOCI SUMMER4. ) .
This is a real and serious risk likely to affect the rights and interests of the holders of shares in
COMPANY4.), including COMPANY1.).
The condition of the risk of imminent damage is therefore characterized in this case >>;

that by ruling in this way, the Court of Appeal violated Article 89 of the Constitution by a
lack of reasons due to a contradiction. ".

Court's response

Considering article 89 of the Constitution.

By holding, on the one hand, that the condition of urgency, required for the application
of article 932, paragraph 1, of the New Code of Civil Procedure, has not been established and,
on the other hand, in the context of the request submitted on the basis of article 933, paragraph
1, of the New Code of Civil Procedure, that "the condition of the risk of imminent damage is
characterized", therefore that urgency is established, the appeal judges decided on contradictory
grounds .

It follows that the judgment incurs the cassation.

On the request for the allocation of procedural compensation

The company SOCIETE2.) being to be ordered to pay the costs of the proceedings in
cassation, his request for the allocation of procedural compensation must be rejected.

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FOR THESE REASONS,

and without there being any need to rule on the other means

the Court of Cassation

quashes and annuls the contested judgment, number 120/22 - VII - REF, delivered
on June 22, 2022 under number CAL-2020-00252 of the roll by the Court of Appeal of the
Grand Duchy of Luxembourg, seventh chamber, sitting in summary proceedings;

declares the said judicial decision and the ensuing acts null and void, restores the
parties to the state in which they found themselves before the quashed judgment and, to be
upheld, refers them to the Court of Appeal of the Grand Duchy of Luxembourg, composed
differently;

denies the request of the California law company COMPANY2.) LLC in

allocation of procedural compensation;

condemns the defendants in cassation at the expense of the proceedings in cassation

with distraction for the benefit of the limited liability company LOYENS &
LOEFF, on his assertions of right;

orders that, at the behest of the State Prosecutor, this judgment be transcribed in the
register of the Court of Appeal of the Grand Duchy of Luxembourg and that a reference to the
transcription of the judgment be entered in the margin of the minute of the annulled judgment.

The reading of this judgment was made in the aforementioned public hearing by
Councilor Théa HARLES-WALCH in the presence of Advocate General Bob PIRON and Clerk
Daniel SCHROEDER.

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Conclusions of the General Prosecutor's Office in the cassation case

the California law company COMPANY1.) LLC c/

1. the California corporation CORPORATION2.) LLC 2.

the limited liability partnership CORPORATION4.) s.à rl

(Register Case No. CAS-2022-00101)

The appeal by the plaintiff in cassation, by filing at the Court Registry on October 10, 2022 of
a memorandum in cassation, served on October 7, 2022 on the defendants in cassation1 is
directed against judgment no. cause entered under number CAL-2022-00252 on the roll .
,

The admissibility of the appeal which is disputed

The defendant in cassation sub 1. raises the inadmissibility of the appeal for reason of
belatedness on the basis of article 7 of the amended law of February 18, 1885 on appeals
and cassation proceedings (hereinafter "the Law of 1885") on the grounds that the judgment
under appeal was validly served at the elected domicile of the plaintiff in cassation with his
representative on July 7, 2022 and that, by this election voluntary from domicile, the plaintiff
in cassation waived the benefit of the distance deadlines.
By serving its memorandum in cassation dated October 7, 20222 the plaintiff in ,

cassation would not have respected the deadline of article 7 of the Law 1885, provided for on
pain of forfeiture.

Under the terms of Article 7, paragraph 1, of the Law of 1885, the time limit for lodging an
appeal in cassation, which runs against contradictory judgments on the day of service in
person or at home, is two months for the petitioner in cassation who lives in the Grand Duchy.

A person who lives outside the Grand Duchy has, in addition to this two-month period, the
period provided for in article 167 of the New Code of Civil Procedure to lodge an appeal in
cassation.

1
The act of service informs of the steps taken by the bailiff in order to ensure the service of the memorandum in cassation
on the defendant in cassation sub 1., a Californian law company. These procedures are those provided for by the Hague
Convention of 15 November 1965 on the service abroad of judicial and extrajudicial documents in civil or commercial matters.

2
The memorandum in response erroneously mentions two dates (6 and 7 October 2022) of service of the memorandum in
cassation.

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For a party domiciled in the United States of America, the distance period provided for in article 167 of
the New Code of Civil Procedure is thirty-five days.

It is necessary to determine whether there was an election of domicile in this case and, in the event of
an affirmative answer, whether an election of domicile in the Grand Duchy of Luxembourg eliminates the
time limits for distance.

The judgment of June 22, 2022 was served at the "elected domicile" of the Californian law company
COMPANY1.) (hereinafter "COMPANY1.)") on July 7, 2022. Indeed, it results from the terms of the act
of the bailiff that the recipient of the service was the company COMPANY1.), established and having its
registered office at (…) ADDRESS4.), (…), California (...) electing domicile in the study of the Loyens &
Loeff limited liability company. According to the terms of delivery of the document, the service of the
contested judgment was made at the elected domicile (box checked) in the hands of Maître Véronique
HOFFELD.

Notwithstanding the acceptance of this act by the agent of the company SOCIETE1.), the election of
domicile for the service of the judgment is currently disputed.

Under the terms of article 111 of the Civil Code, " when an act contains on the part of the parties or one
of them, election of domicile for the execution of this same act in a place other than that of the real
domicile, the notifications, requests and proceedings relating to this act may be made at the agreed
domicile and before the judge of this domicile" .

The elected domicile is a purely fictitious domicile, chosen by agreement or imposed by law, for the
execution of an act, a judgment or for the instruction of a trial.
Article 111 is the only text of the Civil Code devoted to the elected domicile. It only deals with the
conventional election of domicile without alluding to the cases where the law imposes an election of
domicile.

No legal provision has required COMPANY1.) to elect domicile within the framework of the appeal
procedure in the matter of summary proceedings. Indeed, this procedure does not require the
appointment of a lawyer, in such a way that it cannot be concluded that the appointment of a lawyer
entails election of domicile.

The law does not require any particular form for the election of domicile, as long as it emanates from a
capable person and is clearly expressed. It does not matter whether it is express or tacit, agreed
unilaterally or bilaterally, expressed verbally or in writing3 .

The limits of the tacit election of domicile relate to the need for a certain and unequivocal will: in doubt,
the election of domicile is not presumed 4 .

3
Dalloz, Directory of civil law, Domicile, residence and family accommodation, Determination of domicile, Yvaine
BUFFELAN-LANORE, n° 110 and following.
4
JurisClasseur Civil Code - Encyclopedias - Art. 102 to 111 - Fasc. 20: HOME. - Determination and election of
domicile, n°76; JurisClasseur Notarial Form - Encyclopedias - V° Election of domicile - Fasc. 10: Election of
domicile - Conventional election - Legal obligation to elect domicile, n°24.

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The file submitted for Your assessment does not provide any indication of COMPANY1.)'s
desire to take up residence with its representative. In the absence of this element, the mere
fact that the latter accepts the service of the judgment is, in the opinion of the undersigned,
insufficient to conclude that an election of domicile has been validly made. It follows that the
contested judgment was not validly notified and that the time limit for appealing to the Supreme
Court did not, in the absence of notification to anyone or to the actual domicile, begin to run.

In the alternative, it should be specified that it follows from Your case law that the election of
domicile does not ipso facto constitute a waiver of the distance deadlines.

Indeed, in two judgments of November 13, 2014, Your Court decided that “choice of domicile
does not preclude the extension of the period enjoyed by the person whose actual domicile is
abroad ”5 .

The same solution prevails in French case law and it is held that if the notification was not
made to him personally, but to an elected domicile in France, the party domiciled abroad
retains the benefit of the distance period6 .

Consequently, even assuming that in this case the service of the judgment was validly made
at the elected domicile of the current plaintiff in cassation, the latter would still benefit from the
thirty-five-day distance period, in addition to the two-month cassation period, given that his
real domicile is in the United States of America.

In this case, the time limit for appealing in cassation would have expired on October 12, 2022.

As the memorandum in cassation was filed with the Court on October 10, 2022 after having
been served on the defendants in cassation on October 7, 2022, the appeal was, in any event,
filed in the form and within the time limit of the Law of 1885.

Insofar as it attacks a judgment of the Court of Appeal, therefore a final decision, having
settled the entire dispute, the appeal is admissible.

The memorandum in response of the defendant in cassation sub 1., served on the plaintiff in
cassation at its elected domicile and on the defendant in cassation sub 2. on November 28,
2022, and filed at the Court registry on December 6, 2022, may be taken into consideration
for having been served within the time limit and filed in accordance with the requirements of
the Law of 1885.

5
Court of Cassation, 13 November 2014, n°73 and 74/14, n° 3388 and 3394 of the register.
6
J. and L. BORE, Cassation in civil matters, DALLOZ, ed. 2015/2016, n° 51.31, p.215 as well as the reference cited therein.

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The plaintiff in cassation served a memorandum in reply dated March 20, 2023 and filed it
with the Court Registry on March 27, 2023. This memorandum in reply, which was served
within the time limit provided for in Article 19 of the Law of 1885 and which responds to the
plea of inadmissibility opposed to the appeal, can be taken into consideration to comply with
Article 17 of the aforementioned law.

Facts and procedural background

The California corporations COMPANY1.) (owned by PERSON1.)) and COMPANY2.) (owned

by PERSON2.)) are the two partners of the limited liability partnership COMPANY4.).
COMPANY1.) initially held 60% of the shares of COMPANY4.) (i.e. 600 out of 1,000) while
COMPANY2.) held 40% (i.e. 400 out of 1,000).

Following a sale by COMPANY1.) to COMPANY2.) of 100 shares dated December 19, 2013
for the price of 1 euro, the share capital of the company COMPANY4.) is divided equally
between the companies COMPANY1.) and COMPANY2.).

SOCIETE4.) holds 99.9% of the shares of a public limited company under French law
SOCIETE5.), which in turn owns a wine estate and is a 49.99% shareholder of a public
limited company under French law SOCIETE6.) through which its wine estate is operated.

PERSON2.) sold his entire stake in the company COMPANY2.) to a third party company
COMPANY7.).

On September 21, 2021, COMPANY1.) summoned COMPANY2.) and COMPANY4.) to

appear before the Luxembourg district court, sitting in commercial matters, to have the sale
of 100 shares declared null and void for lack of cause, if not for false cause.

Legal proceedings are also underway before the Californian courts seeking the cancellation
of the transfer by PERSON2.) of its participation in the company COMPANY2.) to the
company COMPANY7.).

Since August 2021, COMPANY4.) has had no management bodies, the corporate accounts
for the years 2020 and 2021 have not yet been approved or published and the domiciliation
contract has been terminated with effect from June 24, 20227 .

By interim order of February 15, 2022, COMPANY1.)'s request to see the appointment, on
the basis of article 1961 of the Civil Code together of article 932, paragraph 1 of the New
Code of Civil Procedure, otherwise article 933, paragraph 1 of the New Code of Civil
Procedure, a receiver to receive, keep and administer the 100 shares

7
By interim order of March 10, 2023, Maître Claude SCHMARTZ was appointed provisional administrator
of SOCIETE4.).

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social disputes and exercise the voting rights attached thereto, was declared inadmissible on
all legal grounds.

The appeal lodged against this order was declared unfounded by judgment of June 22, 2022
of the Court of Appeal, Seventh Chamber, sitting on appeals for interim measures.

This appeal is directed against that judgment.

As to the first ground of appeal:

alleging violation of Article 89 of the Constitution for lack of reasons by reason of doubt,

in that the Court of Appeal declared unfounded the appeal lodged by COMPANY1.) on the
grounds that, in the event that the receiver had been appointed “in three out of four cases,
the position defended by the company COMPANY1.) would prevail, without it being certain
that this ultimately corresponds to the interests of the company COMPANY4.) and is not,
where applicable, influenced by the particular interests of the company COMPANY1.) or its
beneficial owner ” 8 ,

whereas, given the use of the conditional and the use of the phrase " without it being certain
", these reasons are based on a simple doubt, which is confirmed by the alleged influence
that the receiver with the right to vote at the general meeting of the company COMPANY4.)
should, according to the judges, suffer from the company COMPANY1.) or its beneficial owner.

By ruling in this way, the Court of Appeal would have violated Article 89 of the Constitution by
a lack of reasons due to a doubtful reason.

Article 89 of the Constitution penalizes the absence of reasons which is a defect of form which
can take the form of a total lack of reasons, of a contradiction of reasons, of a doubtful or
hypothetical reason or of a lack of response to conclusions.

Is considered doubtful, any expression by which the judge marks a doubt, a hesitation on a
point of fact essential to the solution of the litigation, which would require a categorical
affirmation so that the operative part of the decision was justified9 .

The flawed reason must be a reason of fact and not of law and the doubtful reason only
vitiates the decision if it relates to a point of fact on which the trial judge was required to make
a definite finding10.

8
Judgment under appeal, p. 15.
9
Boré, aforementioned work, no. 77.142, p. 414
10
Boré, aforementioned work, nos. 77.143 and 77.144, p. 414 and 415.

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However, it is a rule that the doubtful expression does not vitiate the judgment when other
statements of the latter demonstrate the affirmative character of the judge's thought11. The
reason for doubt is also not sanctioned when it is superabundant12.

In this case, the passage criticized by the plaintiff in cassation is subject to the examination
of article 933 paragraph 1 of the New Code of Civil Procedure. After noting that the condition
of the risk of imminent damage was established, the appeal judges affirmed that the
sequestration measure requested "does not constitute a useful remedy for this risk in view
of the rules governing the voting procedures at general meetings of limited liability companies
as set out in article 710-8 of the LSC"13 .
The appeal judges also concluded that " the appointment of a receiver, regardless of whether
or not he is vested with the power to vote at general meetings, does not constitute a useful
measure to counter the imminent risk characterized by the head of the company
SOCIETE4.)"14 .

It follows that the criticized passage of the judgment and the uncertainty expressed therein
only tends to illustrate why the requested measure is not useful. The decision, according to
which the designation of a receiver is not appropriate to deal with the imminent risk
characterized in the head of the company SOCIETE4.), is conveyed with certainty.

The thought of the appeal judges has therefore been affirmed with certainty, in such a way
that the first ground of appeal is to be rejected.

As to the second ground of appeal:

alleging violation of Article 89 of the Constitution for lack of reasons by contradiction of

reasons,

in that the Court of Appeal declared the appeal unfounded on the grounds that the disputed
shares for which the plaintiff in cassation had requested sequestration had to "be threatened
with irremediable disappearance without hope of recovery in kind or in value" for the
condition of urgency within the meaning of article 932, paragraph 1 of the New Code of Civil
Procedure to be met, while considering that "such a risk is not characterized by the company
SOCIETE1.), which at the the contrary focuses on the problems of decision-making at the
level of the general assembly of the company COMPANY4.) which according to it would be
caused by the behavior of the company COMPANY2.) and would be likely to affect the
company COMPANY4 . ) . Although the Court cannot rule out the hypothesis that the
management problems within the company SOCIETE4.) may ultimately be of such a nature
as to affect the value of the shares of the company SOCIETE4.), and therefore the 100
shares under discussion, it does not follow that the urgency is characterized in relation to
these 100 shares” 15 ;

11
Boré, aforementioned work, n°77.145, p.415
12
Boré, aforementioned work, n°77.145, p.415.
13
Judgment under appeal, p. 14.
14
Judgment under appeal, p. 16.
15
Judgment under appeal, p. 12.

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whereas, with regard to the existence of a risk of imminent damage within the meaning of
Article 933, paragraph 1 of the New Code of Civil Procedure, the judgment under appeal
held that " it is common ground in question that the company accounts for the years 2020
and 2021 have not been adopted and published, that the company SOCIETE4.) is currently
devoid of governing bodies and that it will be private from June 24, 202 2 of registered office.
This situation constitutes a violation of the relevant provisions of the LSC likely to lead to
the judicial liquidation of the company SOCIETE4.). This is a real and serious risk likely to
affect the rights and interests of the holders of shares in COMPANY4.), including
COMPANY1.). The condition of the risk of imminent damage is therefore established in this
case ”16.

By so ruling, the Court of Appeal would have violated Article 89 of the Constitution by a lack
of reasons due to a contradiction.

As noted above, the absence of reasons, which is a formal defect, may take the form of a
total lack of reasons, a contradiction of reasons, a doubtful or hypothetical reason or a
failure to respond to conclusions.

According to your Court, " the complaint of the contradiction of reasons, equivalent to a
lack of reasons, can only be upheld if the incriminated reasons are contradictory to such an
extent that they destroy and annihilate each other reciprocally, none of which can be
accepted as the basis of the decision"17 .

With regard to a formal defect, “ the judge's assessment must be made, in the matter,
without examining the substantive file; he must only assess the formal and external
consistency of the reasons, without assessing their merits ”18.

The contradiction must affect the very thinking of the judge. It must not be the result of a
simple error of pen or language. The contradiction of motives must be real and profound,
that is to say that there must exist between the two incriminated motives a real
incompatibility. The means must specify the terms of the judgment which would be in
contradiction19.

The contradiction must have exerted an influence on the decision prejudicial to the plaintiff
in cassation.

16
Judgment under appeal, p. 14.
17
Court of Cassation, February 16, 2017, No. 17/2017, Register No. 3740; Court of Cassation, November 17, 2022, no.
137/2022, registry no. CAS-2022-00015.
18
Boré, aforementioned work, no. 77.82, p. 410.
19
Boré, aforementioned work, n° 77.91 and 77.92, p. 411.

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In this case, it must be noted that the allegedly contradictory reasons relate to two
different legal bases, requiring different conditions, invoked in an order of subsidiarity20.

Indeed, according to the appeal judges, article 932, paragraph 1 of the New Code of
Civil Procedure makes the intervention of the judge in chambers subject in particular
to the condition that the plaintiff demonstrates “ that it is urgent that the requested
measure be taken. If this consists of the sequestration of an asset, the urgency
required relates to the sequestration measure which must be such as to preserve the
interest of the plaintiff. In the event of a dispute over the ownership or possession of
a thing, it has been recognized that urgency is characterized by the intention of one
of the parties to behave, from now on, as the owner of the disputed thing, or by the
actions of a transferee of shares who, in defiance of several court decisions, hastens
the liquidation of a company to the point of being awarded the entire corporate
patrimony, or by the attempt of a husband to sell shares without his wife's knowledge.
which depend on a partnership of acquests existing between them or by the fact for
an owner to multiply the hassles by spirit of chicanery, thus preventing a sound
exploitation of his funds to avoid paralysis or difficulties in the administration of a
property or a heritage "21 .

The appeal judges continue by specifying that the condition of urgency “ which must
be characterized in relation to the object in dispute for which the plaintiff is requesting
sequestration. This object, in this case 100 shares of SOCIETE4.), must be threatened
with irremediable disappearance without hope of recovery in kind or in value.
However, such a risk is not characterized by the company COMPANY1.), which on
the contrary focuses on the problems of decision-making at the level of the general
meeting of the company COMPANY4.) which according to it would be caused by the
behavior of the company COMPANY2.) and would be likely to affect the company
COMPANY4.). Although the Court cannot rule out the hypothesis that the management
problems within the company SOCIETE4.) may in the long term be of such a nature
as to affect the value of the shares of the company SOCIETE4.), and therefore the
100 shares under discussion, it does not follow that the urgency is characterized in
relation to these 100 shares”22 .

In the context of the conditions for intervention by the judge in summary proceedings
under article 933, paragraph 1 of the New Code of Civil Procedure, namely the
existence of imminent damage to be prevented, the appeal judges held the following:
" This situation constitutes a violation of the relevant provisions of the LSC likely to
lead to the judicial liquidation of the company SOCIETE4.). This is a real and serious
risk likely to affect the rights and interests of the holders of shares in the company.

20 It follows from the terms of the judgment (page 2) that the request for sequestration was based on article 1961 of the Civil Code together with article 932, paragraph 1 of the New

Code of Civil Procedure, otherwise article 933, paragraph 1 of the same code.

21
Judgment under appeal, p. 11.
22
Judgment under appeal, p. 12 and 13.

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COMPANY4.), including the company COMPANY1.). The condition of the risk of imminent
damage is therefore established in this case ”23.

By concluding, on the one hand, that the condition of urgency is not sufficiently characterized
in relation to the measure requested on the basis of article 932, paragraph 1 of the New Code
of Civil Procedure, and, on the other hand, that an imminent damage affecting the rights and
interests of the holders of shares is characterized in relation to the measure requested on the
basis of article 933, paragraph 1 of the New Code of Civil Procedure, the appeal judges did
not contradict themselves .

Indeed, after having explained that the potential object of the measure, namely the 100
shares of the company SOCIETE4.), must be threatened with irremediable disappearance
without hope of recovery in kind or in value, the appeal judges held that such a risk was not
characterized by the company SOCIETE1.) given that it focused on the problems of decision-
making at the level of the general meeting of the company SOCIETE4.). The reasoning of the
judges of appeal is limited to this observation of the lack of characterization of the required
condition on the part of the appellant.

The subsequent part of the reasoning for the judgment, namely " If the Court cannot rule out
the hypothesis that the management problems within the company SOCIETE4.) may in the
long term be of such a nature as to affect the value of the shares of the company SOCIETE4.),
and therefore the 100 shares under discussion" constitutes only an obiter dictum and has
been added in a superabundant way .

It remains that, according to the appeal judges, the condition of urgency consisting in the
threat of irremediable disappearance of the shares, was neither alleged nor established by
the plaintiff in cassation. The appeal judges therefore noted the failure of the plaintiff in
cassation to explain and justify the conditions of urgency and did not hold that there was no
urgency. The contradiction of the motives is therefore not given.

The plea must therefore be dismissed.

As to the third, fourth, fifth and sixth grounds of cassation:

alleging the violation of article 932, paragraph 1 of the New Code of Civil Procedure,
respectively of article 933, paragraph 1 of the New Code of Civil Procedure, in combination
with article 1961, 2° of the Civil Code, in that the
Court of Appeal declared the appeal brought by COMPANY1.) unfounded on the grounds
that the request for the appointment of a receiver of securities in summary proceedings must
be analyzed with regard to the conditions laid down by article 932, paragraph 1 of the New
Code of Civil Procedure, respectively by article 933, paragraph 1 of the New Code of Civil
Procedure ,

23
Judgment under appeal, p. 14.

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whereas it would be necessary to analyze the request for the appointment of a

sequestrator for securities in the light of three criteria, namely the existence of a serious
dispute, the urgency and the appropriateness of the measure requested as they result
from Luxembourg case law since 2005.

By ruling in this way, the Court of Appeal would have violated the provisions referred to
in the pleas by refusal to apply, respectively by false application.

The plaintiff criticizes the appeal judges for not having respected the current state of
Luxembourg law according to which three conditions must be met to obtain an interim
sequestration of securities: the existence of a serious dispute, urgency and opportunity.
By taking into account only the conditions resulting from Articles 932, paragraph 1 and
933, paragraph 1 of the New Code of Civil Procedure24, the Court of Appeal would have
violated the provisions set out in the grounds.

Violation of the law can be found in three distinct forms: refusal to apply, false application
and false interpretation25.

Given that Your Court does not distinguish between the different cases of violation of the
law, the four grounds of cassation can be analyzed together, in that they essentially boil
down to criticizing the appeal judges, sitting in summary proceedings, for having limited
themselves to pronouncing on the conditions specific to summary measures in violation
of constant case law specially developed in the matter of sequestration.

This plea proceeds from an erroneous reading of the judgment. Indeed, the appeal
judges ruled on the three conditions referred to in the pleas.

As for the condition of the urgency required in matters of sequestration, they held that "
in the event of a dispute over the ownership or possession of a thing, it has been
recognized that the urgency was characterized by the intention of one of the parties to
behave, from now on, like the owner of the thing in dispute, or by the actions of a
transferee of shares who, in defiance of several court decisions, hastened the liquidation
of a company to the point of having all of the corporate assets attributed to him, or by the
attempt of a husband to sell, without the knowledge of his wife, shares which depend on
a partnership of acquests existing between them or by the fact for an owner to multiply
the hassles by spirit of chicanery, thus preventing a sound exploitation of his funds to
avoid paralysis or difficulties in the administration of a property or a heritage" and that
the condition of urgency26 "must be characterized by

24
Article 932, paragraph 1 of the New Code of Civil Procedure provides that: " In urgent cases, the president of the district court,
or the judge who replaces him, may order in summary proceedings all measures which do not come up against any serious
dispute or which the existence of a dispute justifies" .
Article 933, paragraph 1 of the New Code of Civil Procedure provides that: " The president, or the judge who replaces him, may
always prescribe in summary proceedings the precautionary or remedial measures that are necessary, either to prevent imminent
damage, or to put an end to a manifestly unlawful disturbance".
25
Boré, aforementioned work, n° 72.09, p. 357.
26
Judgment under appeal, p. 11.

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in relation to the object in dispute for which the plaintiff requests sequestration.
This object, in this case 100 shares of the company SOCIETE4.), must be threatened with
irremediable disappearance without hope of recovery in kind or in value ”27.

The appeal judges also ruled on the condition of the existence of a serious dispute in the
following terms: " In the specific matter of sequestration, this approach leads to a sequestration
measure being justified precisely if there is a serious dispute over the ownership of the
disputed property and the serious dispute is not an obstacle to the interim decision but it can
on the contrary be the condition. The condition for the application of the emergency summary
therefore joins the condition for appointing a sequestrator on the basis of article 1961 of the
Civil Code under the terms of which “The court may order the sequestration: 1° …; (2) an
immovable or a movable thing whose … » »28. ownership or possession is disputed between
more persons; 3° two or

They finally found that the requested measure of sequestration of the disputed shares does
not constitute a useful remedy to counter the risk of an imminent danger29. In other words,
they considered that the requested measure was not appropriate.

Given that the three conditions which, according to the plaintiff in cassation, would be specific
to the appointment of a receiver in summary proceedings, were analyzed by the appeal
judges, the means of cassation are in fact lacking.

In the alternative, it should be noted that the exercise of the powers given to the judge in
chambers is subject to the meeting of a certain number of conditions determined in particular
by articles 932 and 933 of the New Code of Civil Procedure.

These conditions relate to the very powers of the judge in chambers as a court.
Thus, the conditions of urgency or absence of serious dispute (article 932), as well as the
imminence of the damage or the existence of a manifestly unlawful disturbance (article 933),
are the conditions placed on the very existence of the jurisdiction of summary proceedings
and its powers30.

It follows that the judge in chambers cannot take any action if the conditions for his intervention
are not met. Examination of these conditions takes precedence or is at least equivalent to
that of the conditions generally required for the appointment of a receiver pursuant to article
1961 of the Civil Code.

The clarification of the Court of Appeal that it " intends to begin the examination of the
respective claims of the parties through the prism of the conditions of application of article
932, paragraph 1 of the New Code of Civil Procedure and of article 933, paragraph 1 of the
New Code of Civil Procedure, invoked in this order of subsidiarity by

27
Judgment under appeal, p. 12.
28
Judgment under appeal, p. 12.
29
Judgment under appeal, p. 14.
30
Jurisclasseur, Civil procedure, Fascicle 1200-95, summary proceedings, General conditions of the powers of the judge of
summary proceedings, functions of the summary judge, n° 1 and 3.

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the company COMPANY1.). The question of knowing whether the sequestration as a “measure”
or a “conservative or reinstatement measure” envisaged by these two texts can be ordered with
regard to the criteria specific to this sequestration measure only intervenes in a second stage, or
else in relation to the conditions of application of the summary procedure”31, therefore reflects
exactly this reflection .

It follows from the foregoing that the appeal judges correctly applied the legal provisions referred
to in the pleas.

The means of cassation are therefore to be rejected.

As to the seventh ground of cassation:

alleging violation of Article 65 of the New Code of Civil Procedure by refusal to apply,

in that the Court of Appeal declared the appeal filed by SOCIETE1.) unfounded on the grounds
that the appointment of a sequestrator of securities in summary proceedings would have to be
analyzed through the prism of the cumulative conditions of urgency and the absence of a serious
dispute or the existence of a dispute, as they arise from article 932, paragraph 1 of the New Code
of Civil Procedure, if not through the prism of alternative conditions of the existence of a risk of
imminent damage or manifestly unlawful disturbance, as they arise from article 933, paragraph 1
of the New Code of Civil Procedure ,

whereas the Court of Appeal raised this ground of its own motion without inviting the parties to the
proceedings, who agreed that Luxembourg law concerning the sequestration of securities in
summary proceedings requires three conditions different from those put forward by the Court of
Appeal, to debate it adversarially, so that they were not able to present their observations on the
conditions proposed by the Court of Appeal, which constitutes a violation of the adversarial principle.

By ruling in this way, the Court of Appeal would have violated Article 65 of the New Code of Civil
Procedure.

Article 65 of the New Code of Civil Procedure provides that:

“ The judge must in all circumstances observe and himself observe the principle of contradiction.

It can only retain in its decision the means, explanations and documents invoked or produced by
the parties if they have been able to discuss them adversarially.

31
Judgment under appeal, p. 11.

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He cannot base his decision on the grounds of law that he has identified on his own initiative
without having first invited the parties to present their observations. »

The principle of contradiction, which is one of the guiding principles of the trial, aims to ensure
that each party can have knowledge of the elements useful to the exercise of its defence. In
particular, each party must be able to read and discuss any document or observation
presented to the judge with a view to influencing his decision. Your Court has thus declared
appeals founded under the visa of Article 65 of the New Code of Civil Procedure in the event
that the trial judges relied on a plea that they had raised ex officio without having first invited
the parties to present their observations32.

The obligation to respect the principle of contradiction essentially applies to the ex officio
statement of legal grounds, that is to say to cases in which the judge settles the dispute by
applying a rule different from that which was invoked before him.

In this case, it follows from the terms of the judgment under appeal33 that the request was
based on article 1961 of the Civil Code together with article 932, paragraph 1 of the New
Code of Civil Procedure, if not article 933, paragraph 1 of the same code.

Contrary to article 1961 of the Civil Code which constitutes a provision of substance, of
general application, articles 932 and 933 of the New Code of Civil Procedure delimit the
referral to the judge in chambers. In this, they are not to be assimilated to legal provisions
tending to give a solution to the dispute but condition the intervention of the judge in chambers.
Indeed, the urgent applications judge is seized of urgent cases, that is to say that he must
understand the dispute that the parties submit to him, not in a global way, but under the
particular report of urgency, he must make the distinction between what calls for a rapid
response and what can wait. This is the concrete meaning of the obligation which weighs on
him to respect the limits of his referral. To deny the urgency of the situation is to contest the
referral to the judge and it is to contest the right of the judge in chambers to hear the case34.
The urgent applications judge is still seized in the event of imminent damage or manifestly
unlawful disturbance35.

The examination of the conditions of its referral is therefore a prerequisite for the intervention
of the judge in chambers. Moreover, the request was expressly based on the legal provisions
which, according to the plaintiff in cassation, would have been raised ex officio.

By analyzing the conditions of their referral on the basis of the legal provisions put forward by
the plaintiff in cassation, the appeal judges did not automatically raise a new legal ground.

32
Court of Cassation, December 8, 2016, register no. 3716, Court of Cassation, October 26, 2017, register no.
3865.
33
The exhibits submitted do not inform the originating summons.
34
Dalloz, Directory of civil procedure, civil summary, n° 365.
35
I go, n° 372.

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The means therefore lack in fact.

As to the eighth and ninth grounds of cassation:

alleging the violation of article 932, paragraph 1 of the New Code of Civil Procedure in
combination with article 933, paragraph 1 of the New Code of Civil Procedure by
refusal to apply and by misinterpretation,

in that the Court of Appeal held on the basis of Article 932, paragraph 1 of the New
Code of Civil Procedure, there was no need to appoint an interim receiver of the
disputed shares due to the lack of urgency,

whereas, under article 933, paragraph 1 of the New Code of Civil Procedure, the Court
of Appeal confirmed that “ the condition of the risk of imminent damage is […]
characterized in this case ”.

The plaintiff in cassation criticizes the judgment under appeal on the grounds that the
appeal judges, while noting the risk of imminent damage, did not retain the condition
of urgency.

However, the finding of urgency in matters of summary proceedings is left to the

sovereign power of the trial judges, as is that of the existence of imminent damage36.

It follows that, under cover of the complaint of violation of the provisions referred to in
the grounds, this only tends to call into question the assessment made by the appeal
judges, on the basis of the factual elements submitted to them, of the condition of
urgency and the existence of a risk of imminent damage, an assessment which falls
within their sovereign power and which escapes the review of the Court of Cassation.

It follows that the plea cannot be upheld.

As to the tenth ground of cassation:

alleging violation of article 932, paragraph 1 of the New Code of Civil Procedure by
misinterpretation,

in that the Court of Appeal held that there was no need to appoint an interim receiver
for the disputed shares because of the lack of urgency “which must be characterized
in relation to the disputed object ”;

while there is urgency when a delay of a few days, perhaps even a few hours, can
become detrimental to one of the parties.

36
Boré, aforementioned work, n° 67.233 p. 349 and 350.

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By ruling in this way, the Court of Appeal would have violated Article 932, paragraph 1 of the
New Code of Civil Procedure by a false interpretation.

As explained above under the eighth and ninth grounds of cassation, the finding of urgency in
matters of summary proceedings falls within the sovereign power of assessment of the trial
judges, in such a way that the plea cannot be upheld.

Conclusion :

The appeal is admissible but must be dismissed.

For the State Attorney General the

Attorney General

Nathalie HILGERT

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