Luxembourg, 2019-09-30

Under Luxembourg commercial law there is a general legal presumption that any invoice that is not objected to within a short period of time is deemed to have been accepted by the invoice recipient (Article 109 of the Luxembourg Commercial Code).

In order to prevent automatic acceptance, an objection to the invoice must be detailed and substantiated. In the absence of these conditions, the invoice recipient is deemed to have agreed to the claims and to have accepted the invoice.

In an appeal decision of 24 January 2019 (No 16/2019, register number 4072), the Luxembourg Court of Cassation defined and limited the scope of the presumption of acceptance of invoice.

The dispute concerned a limited liability real estate company that had engaged a real estate consulting company to attract potential purchasers of real estate and purchasers of shares in real estate.

On the basis of this contract, the client was invoiced with receivables amounting to € 799,437.60.

As this invoice was not paid, the real estate consulting company filed an action for payment with the Luxembourg District Court, which in its judgment of 6 July 2016 found that while the real estate trading company had objected to the invoice within a short period of time, these objections were not detailed enough. As a result, the District Court applied the legal presumption of accepted invoice and granted the payment request of the real estate consulting company.

This judgment was challenged by the client, who disputed that the legal presumption of accepted invoice is applicable in the present case. The appellant argued that the scope of this presumption, based on Article 109 of the Commercial Code, is limited to sales contracts between businessmen and cannot be applied to service contracts.

On 13 December 2017 the 4th Chamber of the Court of Appeal declared the appeal unfounded and dismissed it. According to the Court of Appeal, the legal presumption of accepted invoice does not only concern sales contracts, but is generally applicable among merchants. The legal presumption of accepted invoice has a much broader scope, which, subject to certain exceptions, goes beyond that of the scope of Article 109 of the Commercial Code.

An appeal procedure was initiated before the Luxembourg Court of Cassation.

On 24 January 2019, the Luxembourg Court of Cassation overturned the judgment of the second instance and ruled that the Court of Appeal had infringed the provisions of Article 109 of the Commercial Code.

According to the Court of Cassation, the legal presumption of Article 109 is limited to sales contracts between businessmen. All other commercial contracts are merely a simple human presumption ("présomption de l'homme") and not a legal presumption ("présomption légale"). It is therefore up to the judge to decide on the basis of various indicators whether an invoice has been accepted.

This decision complicates the collection of claims based on non-sales contracts and, in particular, the burden of proof on the claimant, as in these cases the judge is not bound by the legal presumption of accepted invoice pursuant to Article 109 of the Commercial Code, but rather must make a determination on the basis of various indicators.

Author: Anne-Marie Schmit, attorney-at-law

ETUDE ANNE-MARIE SCHMIT