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The Guide to Challenging and Enforcing Arbitration Awards - First Edition

Czech Republic

Applicable requirements as to the form of arbitral awards


Applicable legislation as to the form of awards

1     Must an award take any particular form (e.g., in writing, signed, dated, place, the need for reasons, delivery)?

The form of domestic arbitral awards in the Czech Republic is governed by Sections 25 and 28 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards, which require that the award be in writing and signed by a majority of arbitrators, and that the verdict be explicit. The award must contain reasoning, unless the parties to the proceedings have agreed otherwise, and must be served on all parties. An arbitral award should also include the place of issuance to determine whether it is a domestic or foreign award.

Applicable procedural law for recourse against an award


Applicable legislation governing recourse against an award

2     Are there provisions governing modification, clarification or correction of  an award?

Typing or calculating errors or other obvious mistakes in the arbitration award shall be corrected by arbitrators or an arbitration court at any time at the request of either party. Such a correction must be approved, signed and served as an arbitration award pursuant to Section 26 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards.


Appeals from an award

3     May an award be appealed to or set aside by the courts? If so, on what grounds and what procedures? What are the differences between appeals and applications for set-aside?

First, the Czech Republic is one of the few countries that provide for the possibility of revision of an arbitration award by newly appointed arbitrators. Section 27 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards stipulates that the award may be reviewed by other arbitrators at the request of any or all parties if so agreed by the parties to the arbitration agreement. Unless the arbitration agreement stipulates otherwise, the request for revision shall be delivered to the other party or parties within 30 days of the day of the delivery of the arbitration award to the requesting party. The revision of the arbitration award forms part of the arbitration proceedings and is governed by provisions of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards, and is subject to the same rules as the first instance arbitration proceedings, including the scope of review of both legal and factual issues, but the parties cannot introduce new submissions and new evidence on the record. In the revision proceedings, the arbitrators either confirm the original award or render a new decision in which they overrule the original award.

Second, Section 31 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards regulates the setting aside of arbitral awards and termination of an adjudicated enforcement of arbitral awards by courts.

Pursuant to Section 31, any party may file an application the court to set aside the arbitral award if :

  • no arbitration agreement can be concluded in the concerned case;
  • the arbitration agreement is null and void for other reasons, was cancelled or does not apply to the concerned case;
  • any of the arbitrators who took part in the case were not called on to decide on the case on the basis of the arbitration agreement, or otherwise, or were incapable of becoming an arbitrator;
  • the arbitration award was not approved by the majority of arbitrators;
  • the party was not provided with the possibility to properly plead its case before the arbitrators;
  • the arbitration award condemns the party to a performance that was not requested by the entitled party or that is impossible or unlawful under Czech law; or
  • new facts or evidence are established that were not available in the original proceedings and that justify reopening the case.

The required period to file the application for setting aside the arbitration award under Section 32 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards is three months from the service of the arbitration award. The filing of an application does not suspend enforceability of the arbitral award. However, the court may, at the request of the award debtor, suspend enforceability of the arbitration award if an immediate enforcement of the award would result in considerable harm to this party, or if it is possible to establish that the application for setting the award aside is prima facie justified.

Applicable procedural law for recognition and enforcement of  arbitral awards


Applicable legislation for recognition and enforcement

4     What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

Recognition and enforcement of arbitral awards in the Czech Republic is governed by two sets of rules: international treaties and domestic law. As a general rule, international treaties take precedence over domestic rules if there are conflicting provisions (Article 10 of the Constitution).

In domestic law, recognition and enforcement of foreign arbitral awards is predominantly governed by Part 7 of the Act on Private International Law. In addition, other laws also regulate various aspects of enforcement of foreign and domestic arbitral awards, in particular Part 6 of the Civil Procedure Code, which sets the rules of court enforcement procedure; the Act on Arbitral Proceedings and Enforcement of Arbitral Awards, which regulates, inter alia, the setting aside of domestic arbitral awards and termination of adjudicated enforcement of arbitral awards; and the Act on Court Bailiffs and Execution, which provides for the powers and activities of court bailiffs regarding enforcement and related issues.

The Czech Republic is a party to several multilateral treaties facilitating recognition and enforcement of arbitral awards, in particular: the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards, the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), the 1961 European Convention on International Commercial Arbitration (the Geneva Convention) and the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

The Czech Republic has also entered into several bilateral treaties on legal aid, governing, inter alia, recognition and enforcement of arbitral awards, including with Afghanistan (1983), Albania (1960), Algeria (1984), Bosnia and Herzegovina (1964), Bulgaria (1978), Croatia (1964), Cyprus (1983), Greece (1983), Hungary (1990), Mongolia (1978), Montenegro (1964), Serbia (1964), Slovakia (1993), Slovenia (1964), Spain (1989), Switzerland (1929), Syria (1986), Tunisia (1981), Vietnam (1984) and Yemen (1990).


The New York Convention

5     Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?

The Czech Republic is a successor state of the Republic of Czechoslovakia, which signed the Convention on 3 October 1958 and ratified it on 27 April 1959. The Convention entered into force on 10 October 1959. For the successor state, the Czech Republic, the Convention has been in force since 1 January 1993, and the instrument of succession was deposited with the Secretary General of the United Nations on 30 September 1993.

Upon the signing of the Convention, Czechoslovakia made the reservations under Article I(3) of the Convention. Accordingly, from the Czech perspective, the Convention applies to the recognition and enforcement of arbitral awards issued in the territory of another contracting state and to arbitral awards of non-parties on the basis of reciprocity.

Recognition proceedings


Competent court

6     Which court has jurisdiction over an application for recognition and enforcement of arbitral awards?

Jurisdiction over applications for recognition and enforcement of arbitral awards (both foreign and domestic) lies with the court of first instance, usually a district court in the place where the enforcement debtor permanently resides, or stays in the absence of residence, where the place of business of an entrepreneur is located, or where the seat of a legal person is. If the court of first instance cannot be determined through these rules, the court of the place where the property of the debtor is located has jurisdiction. The governing provisions are Sections 9, 11, 84, 85 and 252 of the Civil Procedure Code.

Only domestic court awards can be enforced, as an alternative, through licensed court bailiffs under the Act on Court Bailiffs and Execution. The bailiffs could also, exceptionally, enforce a foreign arbitral award if confirmation of the enforceability of a foreign arbitral award was issued under a directly applicable law of the European Union or international treaty, or where the decision on recognition was issued prior to the enforcement (i.e., in another jurisdiction).


Jurisdictional issues

7     What are the requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

Foreign arbitral awards (i.e., in arbitrations seated outside the territory of the Czech Republic) are not subject to a separate formal decision on recognition. Pursuant to Section 122 of the Act on Private International Law, foreign arbitral awards are recognised within the enforcement proceedings where recognition of the award represents a preliminary question to be positively answered, and adequately reasoned, by the court when deciding on enforcement of the award.

Accordingly, the award creditor in the Czech Republic shall apply directly for enforcement of an award, as would be done with an domestic arbitral award. An application solely for recognition of an award shall be rejected by Czech courts.

The applicant is obligated to state in the application the preferred method of enforcement, essentially thus identifying the assets of the debtor that will be attached. Further requirements for an application vary depending on the proposed method of enforcement. To this end, pursuant to Section 261 of the Civil Procedure Code, the award creditor is obliged in a petition for enforcement of a pecuniary obligation to stipulate the proposed method of the enforcement and to specify: (1) the wages payer of the award debtor (if attachment of wages is requested); (2) the name of the bank and the number of the debtor’s bank account (if attachment of a receivable from an account maintained by a bank is requested); and (3) the award debtor’s debtor or obligated person and the title of the award debtor’s receivable against such persons (if assignment of a receivable other than from the debtor’s bank account is requested).


Form of the recognition proceedings

8     Are the recognition proceedings in your jurisdiction adversarial or ex parte?

Although the award debtor is formally a party to the enforcement proceedings (and recognition of the award forms an integral part thereof), the court generally decides on the application and adjudicates enforcement of the award ex parte on the basis of the application filed by the award creditor, without a formal hearing or involvement of the award debtor (Section 253 of the Civil Procedure Code).

However, the decision on enforcements is served on the award debtor, who can appeal the decision within 15 days of its receipt and can, in the appellate proceedings, submit new facts and evidence regarding adjudication of the enforcement, including recognition of the award.


Form of application and required documentation

9     What documentation is required to obtain the recognition of an arbitral award?

An application for enforcement of an award must satisfy the general requirements for court submissions as set out in Section 42 of the Civil Procedure Code (i.e., the application must identify the competent court and the award creditor, must set out the basis on which the application is based, and must state the relief being sought.

If the award is issued in an arbitration seated in a contracting state of the New York Convention, Article IV of the Convention applies, which requires the applicant to submit to the court the duly authenticated original award, or a certified copy thereof, and the original arbitration agreement, or a duly certified copy thereof.

With regard to domestic awards, or foreign awards issued in arbitrations seated in non-contracting states to the New York Convention, Section 261(2) of the Civil Procedure Code applies, and a party applying for enforcement of an arbitral award must submit to the court the original or a certified copy of the award, with confirmation of its enforceability, executed either on the first page of the award or in a separate document or in any other manner in accordance with the law of the seat of the arbitration or law governing the award.


Translation of required documentation

10     If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition of an arbitral award? If yes, in what form must the translation be? 

If the required documents referred to in question 9 are drafted in a language other than Czech, the party seeking enforcement of the award must submit full translations of these documents, which shall be certified by an official or a sworn translator, or by a diplomatic or consular agent (Article IV(2) of the New York Convention).


Other practical requirements

11     What are the other practical requirements relating to recognition and enforcement of arbitral awards?

A party applying for enforcement of an arbitral award through a court must pay court fees for the application as determined by the Act on Court Fees. The fees vary depending on the object of the enforcement and, if there are any pecuniary obligations, are typically set as a percentage of the enforced amount.

Other costs relating to the enforcement of an arbitral award include the costs of legal representation; however, these will usually be borne by the award debtor in the case of a successful enforcement. Nonetheless, legal representation of the applicant is not obligatory.


Recognition of interim or partial awards

12     Do courts recognise and enforce partial or interim awards?

Pursuant to Section 251 of the Civil Procedure Code, only enforceable decisions that impose obligations will be enforced (and recognised in the case of foreign arbitral awards) by Czech courts.

Accordingly, partial arbitral awards will be generally enforced under Czech law, provided that they stipulate an obligation that is binding on a party and a deadline for the performance of this obligation.

By contrast, interim arbitral awards that typically do not impose any obligations on the parties will not be enforced under Czech law. For determination, Czech courts will not be bound by the respective title of the award, but rather by relief rendered.


Grounds for refusing recognition of an award

13     What are the grounds on which an award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the Convention?

Applicable grounds for the refusal of recognition of foreign arbitral awards in the Czech Republic are set out both in the New York Convention and domestic law, and overlap to a great extent.

With respect to foreign awards issued in a state that is a party to the Convention, the Czech courts directly apply Article V of the Convention, which sets out the possible grounds for refusal of recognition of arbitral awards.

According to the case law of the Supreme Court of the Czech Republic, when deciding on an application for enforcement, the courts shall review ex officio the grounds for refusal as listed in Article V(2) of the Convention (i.e., that the subject matter is capable of settlement by arbitration and that the award is not contrary to public policy). Grounds for refusal as listed in Article V, Paragraph 1 of the Convention (relating to incapacity of the parties or invalidity of the arbitration agreement, lack of due process, including the absence of proper notice of appointment of the arbitrators or of the proceedings, jurisdictional issues, irregularities in composition of the tribunal, non-binding, set aside or suspended award) shall be, pursuant to the text of the Convention, reviewed by the courts only at the request of the award debtor and will be therefore reviewed by the courts only upon appeal by the award debtor against the court decision on enforcement of the award (and inherently recognising the award at the same time) or upon application by the debtor for termination of enforcement proceedings (which is further discussed in question 14).

The recognition of foreign awards issued in non-contracting states is governed by Sections 120 and 121 of the Act on Private International Law. Recognition or enforcement will be refused if :

  • the foreign state does not reciprocally recognise and enforce Czech arbitral awards;
  • the award has not become final and enforceable in the country, or under the law of the country, in which it was issued;
  • the award has been set aside in the country, or under the law of the country, in which it was issued;
  • grounds for setting aside a Czech arbitration award exist; or
  • the award contravenes public policy.

Grounds for setting aside domestic awards are listed in Section 31 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards and include:

  • lack of arbitrability;
  • invalid arbitration agreement;
  • incapacity of arbitrators;
  • award not approved by the majority of arbitrators;
  • lack of due process;
  • unsolicited, impossible or unlawful relief; and
  • existence of grounds for renewal of proceedings in civil proceedings.

Effect of a decision recognising an award

14     What is the effect of a decision recognising an award in your jurisdiction? Is it immediately enforceable? What challenges are available against a decision recognising an arbitral award in your jurisdiction?

Under Czech law, there are three possible avenues to challenge the recognition of an award via a decision on enforcement of the award (including recognition of the award which is, as explained in question 7, inextricably intertwined with the decision of the competent court on enforcement).

First, the award debtor can appeal the court decision ordering enforcement of the award, pursuant to Section 254 of the Civil Procedure Code, within 15 days of service of the court decision. In the appeal, the award debtor can claim grounds for refusal of recognition of the award (as to the particular grounds, see question 13). The regional court has jurisdiction over the appeal, and enforceability of the award is suspended until there is a decision on the appeal.

Second, the award debtor can apply for termination of the enforcement proceedings after the court has ordered enforcement proceedings, if it is ascertained that the award has not become enforceable, the award has been suspended or set aside, or for other reasons relating to enforcement of the award as provided for in Section 268 of the Civil Procedure Code. Similarly, the award debtor can apply for termination of the enforcement proceedings for additional grounds as set out in Section 35 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards, namely that the award was not approved by a majority of the arbitrators, the award provides for relief that was not requested by the claimant or that is not possible or lawful under Czech law, for another reason concerning a lack of mandatory representation of a party to the proceedings. The court shall suspend the enforcement, and the award debtor is obliged to apply to set aside the award with the competent court (a foreign court with respect to foreign awards) within 30 days, otherwise the enforcement proceedings will resume.

Third, the available challenge concerns domestic awards only in the form of an application for setting aside a domestic award, which can be filed within three months of service of the award with the regional court in the district in which the arbitration was seated. However, commencement of proceedings on setting aside the award does not suspend enforcement of the award (see also question 13).


Decisions refusing to recognise an award

15     What challenges are available against a decision refusing to recognise an arbitral award in your jurisdiction?

A decision by a district court in which it refuses to recognise an award (and hence rejecting an application for enforcement of the award) can be appealed by the award creditor to the regional court within 15 days of service of the award.


Stay of recognition or enforcement proceedings pending annulment proceedings

16     Will the courts adjourn the recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration? What trends, if any, are suggested by recent decisions? What are the factors considered by courts to adjourn recognition or enforcement?

Article VI of the New York Convention is directly applicable and provides the competent court with the discretion to adjourn recognition and enforcement proceedings if an application for setting aside or suspension of the award is pending. However, there is no prominent case law applying this Article by Czech courts.

As regards awards issued in non-contracting countries, enforcement proceedings will not be adjourned pending annulment proceedings at the seat of the arbitration. Pursuant to Section 121 of the Act on Private International Law, enforcement will be suspended only when the award has been set aside.

Similarly, a request to set aside a domestic award does not automatically eventuate in adjournment of enforcement of the award. However, pursuant to Section 32 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards, the court may adjourn enforceability of the award at the request of the award debtor, if immediate enforcement would cause significant harm or the application for setting aside the award is prima facie well founded. An application for setting aside a domestic award must be lodged with the competent court within three months of service of the award.

Another way to achieve adjournment of enforcement of an award is provided for in Section 266 of the Civil Procedure Code, under which the competent court may adjourn the performance of enforcement, if it can be reasonably expected that the enforcement will be terminated upon application by the award debtor (see question 13).


Security

17     If the courts adjourn the recognition or enforcement proceedings pending the annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security? What are the factors considered by courts to order security? Based on recent case law, what are the form and amount of the security to be posted by the party resisting enforcement?

Article VI of the New York Convention provides a court adjourning a decision on the enforcement of an arbitral award with the discretion, upon application by the award creditor, to order the award debtor to provide suitable security. However, this provision is not mirrored in Czech law and the process would be rather unusual from a Czech law perspective; accordingly, there is no prominent case law on adjournment or ordering security pursuant to the Convention by the Czech courts.


Recognition or enforcement of an award set aside at the seat

18     Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an award is set aside after the decision recognising the award has been issued, what challenges are available against this decision?

Awards set aside at the place of arbitration are not recognised in the Czech Republic pursuant to Article V(1)(e) of the New York Convention, provided that the award debtor invokes this ground for the refusal of recognition either in an appeal to the first instance court decision on the enforcement of the award or in an application to terminate the enforcement (see also question 13).

The Czech Republic is also a party to the Geneva Convention. Article IX thereof provides more favourable rules for recognition of awards that have been set aside at the seat of arbitration and limits the grounds of refusal to (1) incapacity of the parties or invalidity of the agreement, (2) violation of due process, (3) unsolicited relief and (4) violation of the rules on the composition of an arbitral tribunal. Pursuant to Article VII of the New York Convention, these rules of the Geneva Convention will take precedence when applicable.

With respect to foreign awards outside the scope of the aforementioned conventions, Section 121(b) of the Act on Private International Law provides that the recognition and enforcement of a foreign arbitral award shall be refused if the award has been set aside in the state of its issuance or under the law of the state of issuance.

If the award is set aside after the court has already decided on enforcement of the award (thus recognising the award inherently), the award debtor can request termination of enforcement of the award on the grounds set out in Section 268(1)(b) of the Civil Procedure Code.

Service


Service in your jurisdiction

19     What is the applicable procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction?

Domestic service of extrajudicial and judicial documents is governed by the Civil Procedure Code (Sections 45 to 50e). The procedure is primarily effected by courts at the hearing, or within another judicial act, via a public data service to the addressee’s electronic data box, if available, or via the public mailing system. Important judicial documents must be sent by registered mail and their receipt acknowledged (personal service). The Civil Procedure Code provides for detailed rules on when the service procedure is considered effective when public mail is used, if the addressee fails to acknowledge receipt of the documents. In the case of personal service, the addressee has 10 days to collect the documents – upon expiry of this period, the service is considered effective even if the addressee fails to acknowledge receipt (service by substitution).

Service from EU Member States to defendants residing in the Czech Republic is governed by the EU Service Regulation (Regulation (EC) No. 1393/2007). The designated central body under the Regulation is the Ministry of Justice and the competent receiving authorities are district courts in the territory of which the addressees have their residence or seat.

Service procedure for documents from non-EU Member States is governed by the multilateral 1965 Hague Service Convention.


Service out of your jurisdiction

20     What is the applicable procedure for service of extrajudicial and judicial documents to a defendant out of your jurisdiction?

The service procedure within EU Member States is governed by the EU Service Regulation; for details see question 19.

The service procedure outside the European Union is governed by the multilateral 1965 Hague Service Convention, which allows for the service of judicial and extrajudicial documents. The service is effected by the Ministry of Justice, which attends to more complex issues regarding the service procedure, and by courts, public prosecutors and court bailiffs as sending authorities.

Identification of assets


Asset databases

21     Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?

There are several public registers and databases that allow for identification of an award debtor’s assets in the Czech Republic, including (1) trade register for shares in companies; (2) land register for land or other immovable property; (3) vehicle register; and (4) Industrial Property Office register for information about industrial and intellectual property rights. In most cases, the information in the registers is accessible online and free of charge.


Information available through judicial proceedings

22     Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

An award creditor who is due to receive a monetary award from an award debtor can apply to the court to summon the award debtor to make a declaration of property (Section 260a et seq. of the Civil Procedure Code).

An application for a declaration of property must precede the application for enforcement, and must include the original or a certified copy of the award. The court will grant the application if the award creditor provides evidence that it was impossible to satisfy his claim from the award debtor via the standard enforcement procedure.

If summoned, the award debtor is obliged to appear before the court and disclose information regarding real estate property, movables, bank accounts, wages payer and receivables (Section 260e of the Civil Procedure Code).

Enforcement proceedings


Availability of interim measures

23     Are interim measures against assets available in your jurisdiction? May award creditors apply such interim measures against assets owned by a sovereign state?

Interim measures against assets are generally available in the Czech Republic. Jurisdiction to issue interim measures in the arbitration context lies with the courts, which will, upon application, render interim measures provided that a party to arbitral proceedings demonstrates that future enforcement of the arbitral award is threatened.

On the basis of Section 76 of the Civil Procedure Code, the Czech courts have developed in case law a number of interim measures, such as the mandatory deposit of movable property, a ban on the transfer of property, and an obligation to refrain from certain actions.

Czech law provides for no specific rules on interim measures against a sovereign state. Accordingly, general rules on immunities apply and a court can render an interim measure against state assets used for commercial purposes, but not against assets that serve for government functions (see question 34).


Procedure for interim measures

24     What is the procedure to apply interim measures against assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before applying interim measures? If yes, are such proceedings ex parte?

Prior to commencement or during the course of an arbitration, a court may apply interim measures if it is demonstrated by a party to the arbitration that future enforcement of the award is threatened. To this end, the applicant must essentially demonstrate that a party transfers or depreciates assets.

An applicant for interim measures must set out what kind of interim measure is sought and make a security deposit with the court’s account in the amount of 10,000 Czech crowns, or 50,000 Czech crowns if it is a commercial dispute.

The competent court is the court in the seat of the arbitration or, with respect to arbitrations seated outside the Czech Republic, the court that would have jurisdiction to decide the dispute in the absence of an arbitration agreement (the relevant provisions are Sections 74 et seq. and Section 102 of the Civil Procedure Code, and Sections 22 and 41 of the Act on Arbitral Proceedings and Enforcement of Arbitral Awards).

The court decides without hearing from the defendant and orders the interim measure immediately upon receipt of the application or, exceptionally, within seven days (Section 75c of the Civil Procedure Code).

The decision rendering the interim measure is immediately enforceable upon service to the defendant and, although it can be appealed within 15 days of receipt, the appeal does not suspend enforceability of the measure.


Interim measures against immovable property

25     What is the procedure for interim measures against immovable property within your jurisdiction?

There are no specific rules regarding interim measures against immovable property. Therefore, the general rules as described in questions 23 and 24 apply.


Interim measures against movable property

26     What is the procedure for interim measures against movable property within your jurisdiction?

There are no specific rules regarding interim measures against movable property. Therefore, the general rules as described in questions 23 and 24 apply.


Interim measures against intangible property

27     What is the procedure for interim measures against intangible property within your jurisdiction?

There are no specific rules regarding interim measures against intangible property. Therefore, the general rules as described in questions 23 and 24 apply.


Attachment proceedings

28     What is the procedure to attach assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before attaching assets? If yes, are such proceedings ex parte?

Attachment of assets is effected through court enforcement proceedings initiated following an application by the award creditor for enforcement of the award. Domestic awards are also enforced by court bailiffs (see question 6).

The enforcement proceedings are in two stages: (1) decision of the court ordering enforcement; and (2) performance of enforcement by the court. It is in the second phase that a debtor’s assets are attached.

The creditor must specify in the application what assets he or she prefers to attach and the court will generally uphold the application, provided that the proposed measure of attachment is not manifestly disproportionate to the creditor’s claim. The court usually orders enforcement without hearing from the award debtor (Section 253 of the Civil Procedure Code; see also question 8), determines the particular means of attachment of assets and decides on the costs of the proceedings, which are generally covered by the debtor (Section 270 of the Civil Procedure Code). At the same time, the court bans the debtor from disposing of assets that are the subject of the enforcement (the ban is also registered with the land register, where appropriate).

The decision ordering enforcement is served on the debtor and can be appealed within 15 days of receipt; if appealed, the enforcement is suspended until the decision is confirmed by the appellate court.

Subsequently, the court proceeds ex officio with the enforcement and attaches particular assets to compensate the creditor. Attached assets are appraised by the court or a court-appointed appraiser and frequently sold in a public auction.


Attachment against immovable property

29     What is the procedure for enforcement measures against immovable property within your jurisdiction?

The procedure described in question 28 applies; the court where the real estate property is located has jurisdiction to decide on enforcement proceedings and to attach assets.

Measures for attachment of immovable property include: (1) compulsory administration of the real estate property; (2) establishment of a lien over the property; (3) mandatory sale of the real estate property (Sections 320b, 338b and 335 of the Civil Procedure Code); and (4) forced vacation and division of real estate property where non-pecuniary claims are enforced (Sections 340 and 348 of the Civil Procedure Code).


Attachment against movable property

30     What is the procedure for enforcement measures against movable property within your jurisdiction?

The procedure described in question 28 applies. In general, measures for attachment of moveable property include: (1) attachment of wages or other income; (2) attachment of receivables towards banks; (3) attachment of other pecuniary claims or other proprietary rights; (4) sale of movable property; and (5) attachment of enterprise.

Several other measures are available if a non-pecuniary claim is enforced, such as division of the property or ordering the performance or carrying out of work by the debtor.


Attachment against intangible property

31     What is the procedure for enforcement measures against intangible property within your jurisdiction?

There is no specific procedure for enforcement measures against intangible property. Therefore, the procedure described in question 28 and the measures for attachment against movable property described in question 30 apply.

Enforcement against foreign states


Applicable law

32     Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

There are no specific domestic rules for recognition and enforcement of arbitral awards against foreign states. Accordingly, the general rules on recognition and enforcement, and the rules on state immunities (discussed in question 34), are applicable.


Service of documents to a foreign state

33     What is the applicable procedure for service of extrajudicial and judicial documents to a foreign state?

Under the Act on Private International law (Section 7(5)), the procedure for service to a foreign state is conducted by the Ministry of Foreign Affairs via diplomatic channels.


Immunity from enforcement

34     Are assets belonging to a foreign state immune from enforcement in your jurisdiction? If yes, are there exceptions to such immunity?

Pursuant to Section 7(1) of the Act on Private International Law, foreign states are generally exempt from enforcement in the Czech Republic, provided that the proceedings concern property used for a government function. Therefore, the courts can enforce arbitral awards only with respect to state property used for commercial purposes.

This notion of restrictive immunity has been repeatedly applied by the Czech Supreme Court in the context of disputes against foreign states (jurisdictional immunity), although not specifically in proceedings relating to state immunity within enforcement proceedings.


Waiver of immunity from enforcement

35     Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? If yes, what are the requirements of such waiver?

There are no specific provisions in Czech law for the waiver of a foreign state’s immunity from enforcement. General rules of international law on immunities, which enable a state to waive immunity with respect to enforcement, should thus apply. However, there is no published case law to support this course of action by Czech courts.


Notes

[1] Barbora Šnáblová is the founding partner and Lucie Mikolandová is an associate at Barbora Šnáblová Attorneys.