According to Paperjam, landlords Brasserie de Luxembourg demanded rent payments from 1COM group in Luxembourg-Clausen. In a landmark court decision issued on 25 January, the judge said the tenant did not have to pay rent during this period of strict administrative closure.

Brasserie de Luxembourg has not yet indicated whether or not it intends to appeal.

Unresolved questions

Following the ruling, Fränk Rollinger, in charge of the case, said two points currently remain unresolved. Firstly, the rents, which, if they are not due for the period of strict closure, remain due for the period subject to restrictions such as curfew.

On this point Rollinger says it is difficult to use the drop in sales as an argument to not pay rent, as this is part of the risks inherent in a commercial activity and, in fact, accepted by economic players.

“When you sign a contract between two parties with obligations, you do it because interests meet. This is done with certain convictions, such as having a clientele, earning money. It's the same for the owner. The concern is that life evolves. Contrary to these risks, such as the number of people who will come, for example, there are parameters that are not bound to change, such as business hours. This is the case for many establishments, where customers used to come in the evenings. Calculations to define one's activity are based on this data. If this parameter changes,” explains the lawyer.

Breach of contract

In addition, a second part of the appeal procedure should concern the breach of contract between the establishment’s owner and the Brasserie de Luxembourg by the latter. After no longer receiving monthly rent payments, the company decided to end the contract binding them. “We would like to avoid this, because even if there was money coming in for the café owner, it was not necessarily enough to cover all the expenses,” says Rollinger.

This court decision comes at a time when the hotel and catering sector is being hit hard by the health crisis. It remains to be seen whether, as the lawyer hopes, this decision will set a precedent and apply to night clubs and restaurants, even if the latter were able to offer take-away services.

An enormous financial stake

If this decision is confirmed, the Brasserie de Luxembourg could also be forced to reimburse tenants who, for fear of seeing their supply contracts broken, have paid their rent.

But all would not necessarily be lost for all that for the Brasserie de Luxembourg, which may have recourse against players to whom it rents properties, such as M Immobilier, which supervises nearly 200 shops, as well as most of the country's bars and restaurants.

This article was originally published in French on Paperjam.lu