12 March 2007 |  Print this Article | Share on Facebook | Share on linkedin

Information duty of the bank – new Luxembourg judgement of 6 December 2006

A Luxembourg magistrate pursuant to a foreign request (rogatory letter) notified an order to a bank for the purpose of obtaining documents and seizing assets held in the account of a client of the bank

The question arose whether the bank has the obligation to inform its client of the existence of the order.

This question is particularly important in light of the law of 8 August 2000 relating to mutual assistance in criminal matters. This law enables the concerned person (i.e. the client) to lodge an appeal against the order within a period of 10 days following the day of notification of the Luxembourg order to the bank.

The court held that the bank had the obligation to inform its client of the measures within a reasonable time period and that failing to do so the bank could be held liable for the damages undergone by its client. However, the court stated that the bank can only be liable if the client can prove that if he had been informed in time he would have had a chance to obtain the cancellation of the order.