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Recognition of Foreign Judgments and Arbitral Awards in the Czech Republic

Otakar Hájek

1. Introduction

The area of law dealing with the rules of recognition and enforcement of foreign judgments and arbitral awards in the Czech Republic is an area that underwent many recent and quite dramatic developments. With regard to the recent date of accession of the Czech Republic to the EU (May 1, 2004), the subsequent developments of Czech law in this area have been even faster and more dramatic than in the “old” Member States. The aim of this article is to give a brief overview of the current state of affairs in this area, and to suggest the possible ways forward.

2. Recognition and enforcement of foreign judgments

The Czech Republic, as a member of the European Union, is bound by the provisions of Regulation 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (hereinafter referred to as the “Brussels Regulation”). Currently, the Brussels Regulation is directly applicable in all EU Member States except for Denmark.¹ As the name suggests, the Brussels Regulation only applies to civil and commercial matters and there are a number of cases interpreting the meaning of “civil and commercial matter”.² It is also necessary to emphasize that although the Brussels Regulation provides a fairly wide definition of “judgment,” the ECJ case law has excluded from this definition any remedy which was obtained by an ex parte court order.³

Article 33 (1) of the Brussels Regulation stipulates that a judgment given in a Member State shall be recognized in the other Member States without requiring any special procedure. The Czech Republic, therefore, recognizes civil or commercial judgments from other Member States. Although, if there is a dispute as to whether a particular judgment shall be recognized in the Czech Republic or not, special proceedings may be held before the Czech courts in order to resolve the dispute, or, as the case may be, it can be resolved as a preliminary question in different proceedings.

There are, however, certain circumstances, in which the Czech court will not be under a duty to recognize a judgment from another Member State court. Article 34 of the Brussels Regulation deals with these circumstances. Article 34 involves situations (i) where the foreign judgment is manifestly contrary to public policy in the Czech Republic; (ii) where it was given in default of the defendant’s appearance, when he was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defense, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so; (iii) where the foreign judgment is irreconcilable with a judgment given in a dispute between the same parties in the Czech Republic; or (iv) where the foreign judgment is irreconcilable with an earlier judgment given in another state involving the same cause of action and between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the Czech Republic.

The Act No. 97/1963 Coll., on International Private Law and Procedure (hereinafter referred to as the “IPLP”) was recently amended⁴ in order to harmonize domestic law with the relevant provisions of EC law (most importantly the Brussels Regulation) and ratified and published international treaties, which are now directly applicable in the Czech Republic.⁵ The amendment added the new Part 4 into the IPLP, which regulates recognition and enforcement of foreign judgments in cases where the EC law or international treaties govern recognition and enforcement. Thus, the IPLP newly provides that a formal application for declaration of enforceability of a judgment in the Czech Republic (the so called exequatur) is required as a condition for enforcement. Some authors see this move towards greater formalism as a step back, since, prior to the amendment, foreign judgments were recognized informally by Czech courts, which is obviously more practical and convenient.⁶ However, the amendment further provides that the exequatur may be accompanied by an application for ordering enforcement of such judgment. This obviously makes the procedure easier for the injured party seeking a remedy, as the court will rule on both matters in one resolution. In this respect, it is also worth mentioning that certain execution titles from other Member States nevertheless remained automatically enforceable in the Czech Republic without any exequatur being necessary. The Regulation 805/2004 Creating a European Enforcement Order for Uncontested Claims creates a regime in which public documents and decisions of authorities in other Member states, which comply with the minimum procedural standards stipulated in the said regulation and where the debtor does not contest the existence or the amount of a monetary claim, can be certified as European Enforcement Orders. As such, they shall be enforced in other Member States as domestic enforcement orders. The regulation is applicable in all Member States with the exception of Denmark. As far as Czech civil procedure rules are concerned, conditions of Regulation 805/2004 are met in the case of payment orders, consent decrees, judgments by default, and judgments by acknowledgement.⁷ Other decisions will fall under the said Regulation only rarely, provided that they must comply with the abovementioned criteria.

As for other sources of law that deal with the questions of recognition and enforcement of foreign judgments in the Czech Republic, we have to mention another EU regulation, namely Regulation 1347/2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters and in Matters of Parental Responsibility for Children of Both Spouses. Currently there also exist rules of international law, which are directly applicable with respect to recognition and enforcement of foreign judgments in the Czech Republic. Here we should mention the Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children (published under No. 141/2001 Coll. of International Conventions). It is clear that the scope of both these sources of law is rather limited compared to the Brussels Regulation. Nevertheless, they also establish regimes of mandatory recognition of judgments obtained in other Member States (or, in the case of the Hague Convention, in other signatory states) in the respective fields, and Part 4 of the IPLP applies to them as well. Last but not least, it is necessary to keep in mind that the Czech Republic is also a signatory of various bilateral agreements on legal aid and on recognition and enforcement of judgments, the provisions of which must always be taken into account by the Czech courts.⁸

Where there is no applicable rule of international or EU law, recognition and enforcement of foreign judgments is governed by the Czech national conflict-of-laws rules, namely the IPLP. The first point to make here is that it is only possible to enforce judgments dealing with property and proprietary rig

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