“Real domicile vs Domicile of convenience: an application in Luxembourg case law in service of process within the EU”

On October 18, 2024, a Luxembourg court issued a decision[1] emphasizing the gap between actual and fiscal or administrative domicile, especially in cross-border legal enforcement. The issue originated from the necessity to authenticate the delivery of a Luxembourg exequatur order in France, which upheld a 2017 French court decision. This verdict ordered the defendant to pay specific amounts, resulting in asset seizures in Luxembourg. The defendant claimed residency in Russia, complicating the enforcement process.

In the absence of the defendant when service was made (“signification à personne”), the court used the "faisceau d'indices" methodology to ascertain the defendant's true residence, which is a thorough examination of evidence to establish factual reality, and therefore the validity of the delivery to his residence (“signification à domicile”).

·         The defendant's true habitation was a château in France, as evidenced by his name on the château's mailbox and testimony from neighbours and château staff.

·         The defendant was listed as the château's contact person on a business website.

·         Additional verifications and inspections made on the spot by French bailiff who could therefore validly serve the decision according to French Laws.

In defense, the defendant contended for fiscal presence in Russia, showing papers including French tax records showing a Russian address, a resident permit issued in Russia, passport mentions, consular certifications, and a "certificate of life" from the French consulate in Moscow. The defendant further stated that the château was owned by a firm and rented out to third parties. Despite these assertions, the court determined that fiscal or administrative paperwork did not overcome the substantial presumption of true domicile based on factual evidence,.

The judgment confirmed that the exequatur order was validly served, hence confirming the asset seizure. Though the verdict is now being appealed and lacks res judicata authority, this conclusion is consistent with Luxembourg case law, which favors factual proof of residence above administrative or fiscal appearances. The case emphasizes the significance of extensive factual investigations in legal situations involving domicile and cross-border execution of decisions, particularly for matters introduced before 10/01/2015 under EU legislation governing civil and commercial judgments (Brussels I). Indeed, since that date, national decisions rendered in the EU do not need to go through the exequatur procedure anymore in order to be enforced in another EU Member State (Brussels 1 bis regime).

[1] Civil Judgement 2024TALCH10/0013, n° TAL-2018-00560