How Chilean Companies Can Pursue Litigation in the Czech Republic and Europe

Understanding Czech court jurisdiction over Chilean companies

When a Chilean company becomes involved in a dispute with a Czech counterparty, the first critical question is whether Czech courts actually have the power to hear the case. This is the concept of jurisdiction, and it determines not just where the case will be heard, but also whether any judgment will be enforceable. For Chilean companies doing business in the European Union, the rules are governed primarily by the Brussels I bis Regulation (Regulation EU No 1215/2012).

The general principle is straightforward but has important exceptions. Under Brussels I bis, a defendant domiciled in the Czech Republic should be sued in Czech courts. However, the regulation provides multiple alternative jurisdiction bases that give Chilean companies flexibility in choosing where to file claims. If your contract with a Czech party includes a jurisdiction clause specifying Czech courts, that agreement is generally binding and enforceable.

Additionally, if your dispute arises from a contractual obligation and the place of performance (e.g., delivery of goods or provision of services) is in the Czech Republic, you can pursue your claim there. This is particularly relevant for Chilean companies with distribution agreements, service contracts, or supply arrangements where performance is physically located in Europe.

The Brussels I bis Regulation represents what European lawyers call the "recast" version of the original regulation, updated to facilitate the recognition and enforcement of judgments within member states. What this means in practical terms for your Chilean company is that if you obtain a judgment in Czech courts against a Czech defendant, enforcement throughout the EU is significantly streamlined compared to enforcement of judgments from non-EU countries.

Territorial jurisdiction within the Czech Republic

Once you establish that Czech courts have international jurisdiction over your dispute, the next procedural step is determining which specific Czech court will hear your case. This is called territorial jurisdiction, and the rules are complex with several exceptions and special cases that ARROWS Law Firm encounters regularly when representing international clients.

The basic rule is that commercial cases are filed in district courts (okresní soud or obvodní soud in Prague) for first instance proceedings. However, the specific district court depends on the defendant's general court, usually determined by their registered office or place of business. If your Czech defendant has their registered office in Prague, you file in the relevant District Court for Prague (determined by the city district).

Yet this basic framework has significant complications. For example, if the defendant is a branch office rather than the main company, questions arise about which location controls jurisdiction. If the defendant refuses to accept service, disputes about proper jurisdiction can consume months of proceedings before the case even begins substantively.

ARROWS Law Firm's lawyers, experienced in representing foreign companies daily in Czech proceedings, understand these territorial details that seem minor on the surface but can determine whether your case proceeds efficiently. The location you choose for filing matters not just for convenience—it affects case management and judicial assignments.

The structure of Czech civil procedure

The Czech civil litigation system operates on principles that may differ from the Chilean legal tradition. Understanding these procedural differences is not merely academic—they directly affect your litigation strategy, costs, timeline, and likelihood of success.

Czech procedure puts a heavy emphasis on written submissions. While oral hearings are a mandatory part of the process (unless parties agree otherwise or in specific simplified procedures), the most critical work often happens in written statements filed before the court hearings. Each party must submit a detailed written statement of claims and evidence, specifying exactly what facts will be proven and how.

Unlike in some inquisitorial systems, Czech commercial litigation relies on the adversarial principle (projednací zásada). This means the court decides based on facts asserted and evidence proposed by the parties. However, the judge has a significant duty to instruct (poučovací povinnost).

The judge plays an active role in case management and may instruct parties to supplement their factual assertions or propose additional evidence if their current position is insufficient to succeed. This requires Chilean companies to prepare comprehensively in advance, as the judge will actively identify gaps in your argumentation.

Another critical difference: Czech procedure does not include broad "discovery" as understood in common law systems. You cannot generally compel your opponent to produce all internal documents, emails, or business records simply to see if they contain relevant info. Instead, parties must propose specific evidence (e.g., a specific document) and justify why it matters.

The court then decides whether to order the other party to produce it ("editio obligation"). This means your evidence strategy at the filing stage is absolutely crucial.

The language requirement is also absolute. All proceedings must be conducted in Czech. All documentary evidence must be in Czech or accompanied by an officially certified Czech translation. Documents in English, Spanish, or any other language are not admissible as evidence until translated by an authorized court translator.

Understanding the timeline

One of the first questions ARROWS Law Firm's Chilean and international clients ask is: "How long will this take?" The answer depends on case complexity, whether appeals occur, and whether all parties cooperate with procedural requirements.

For straightforward commercial disputes in first instance proceedings before a district court, a typical timeline is twelve to eighteen months. Cases involving complex facts, multiple parties, or extensive expert evidence can extend to two or three years in first instance alone. While statistical averages may suggest shorter times for simple cases, international commercial disputes typically require more time due to translations and cross-border service of documents.

If your case proceeds to appeal, add another nine to eighteen months to the timeline. Appeals are filed in regional courts (krajský soud) or the High Court (vrchní soud) depending on the subject matter, and require the appellate court to review the first instance judgment.

If issues of legal interpretation reach the Supreme Court through the extraordinary appeal procedure ( dovolání ), add another twelve to eighteen months. This extended timeline creates real costs and business risks for Chilean companies.

A dispute over a contract worth €100,000 can consume two to three years of management attention. This is why efficient initial case strategy—proper jurisdiction analysis, clear evidence presentation, and realistic assessment of strength—matters so much.

The critical role of evidence and documentation in Czech civil litigation

One of the most important aspects of Czech civil procedure is the burden of proof. In Czech civil procedure, each party must prove its own allegations—the judge does not investigate or uncover facts independently in commercial disputes. This places enormous importance on documentary evidence, witness testimony, and expert opinions.

The burden of proof requires each party to establish all facts necessary to support its legal claims. In a contract dispute, for example, you must prove that the contract existed, that the other party breached it, that you suffered damages, and that these damages were caused by the breach. If any element is not proven to the court's satisfaction, you lose that claim.

Documentary evidence is king in Czech procedure. Written contracts, invoices, payment records, correspondence, and business communications carry substantial weight. However, as noted, foreign documents must be authenticated and translated.

An original Chilean contract, even if written in English, requires official translation into Czech by an authorized translator before it is effectively used in court. Expert evidence is also important; if your dispute involves technical issues, the court or the parties may propose the appointment of an expert.

Witness testimony is taken at court hearings. The judge typically leads the questioning, followed by questions from the attorneys. Remote witness testimony is possible via video conference under specific conditions (§ 102a of the Code of Civil Procedure), which is particularly relevant for Chilean companies whose witnesses may be located outside Europe.

ARROWS Law Firm's experience representing international clients shows that evidence strategy at the filing stage is absolutely critical. Most Chilean companies do not appreciate that evidence gathering must happen before litigation begins. Once proceedings advance, strict "concentration of proceedings" rules may prevent you from submitting new evidence that could have been presented earlier.

Filing your claim

When a Chilean company decides to pursue litigation in Czech courts, the actual filing of the claim ( žaloba ) is where many complications arise. The claim is a legally structured document that must comply with specific formal requirements under the Code of Civil Procedure (§ 79).

Your claim must contain precise identification of both parties (your company and the defendant), a detailed statement of facts, the legal basis for your claim (though factual description is paramount), the specific relief you're requesting ( petit ), and identification of the evidence supporting each factual allegation. The claim must be filed in Czech.

A critical procedural requirement that trips up foreign companies is the pre-action warning (předžalobní výzva). You must send a pre-action warning letter to the defendant at their registered address at least seven days before filing the lawsuit. This letter must call for performance (e.g., payment).

While failing to send this letter does not invalidate the lawsuit itself, it generally prevents you from recovering your legal costs from the defendant even if you win the case (§ 142a of the Code of Civil Procedure).

Court fees are payable upon filing. For standard civil disputes, the fee is 5% of the amount claimed (for claims up to 40 million CZK). For a claim of €100,000, expect to pay €5,000 in court fees. If you fail to pay within the time the court specifies, the proceedings are stopped.

ARROWS Law Firm regularly advises Chilean and international clients on proper claim drafting. A defectively drafted claim can lead to the court requesting corrections, delaying the process, or even rejection if defects are not cured.

The electronic payment order

If your claim against a Czech defendant is for a specific monetary amount and the debt is indisputable, you may utilize the Electronic Payment Order (elektronický platební rozkaz) procedure. This is a streamlined method for claims up to 1,000,000 CZK (approx. €40,000) that is handled faster and with a reduced court fee of 4%. For amounts exceeding this limit, a standard Payment Order can still be issued (with a 5% fee).

The procedure begins with filing a specific electronic form. If the court finds the claim substantiated by the attached evidence, it issues a payment order without a hearing. This order is served on the defendant into their own hands. The defendant then has exactly fifteen days from delivery to either pay the full amount or file an objection (odpor).

If the defendant pays, the matter is resolved. If the defendant files an objection (without needing to substantiate it at that moment), the payment order is cancelled in full, and the case automatically converts into standard civil litigation with a full hearing. If the defendant remains silent (does not pay or object), the payment order becomes final and enforceable, having the same effect as a final judgment.

Costs and fee structures

For Chilean companies, understanding the financial commitment is essential. Court fees are paid upfront and are typically 5% of the claim value (4% for electronic payment orders up to 1M CZK).

Legal representation costs are usually charged based on hourly rates or fixed fees. Hourly rates for experienced commercial lawyers in Prague typically range from €150 to €300 per hour depending on complexity.

Translation costs are significant, with official translation fees typically running €40-€80 per page (standard page of 1800 characters). Expert fees vary; if appointed by the court, the court sets the remuneration based on regulations, and parties usually must pay an advance.

If you win your case, the losing party is typically required to reimburse your costs. However, reimbursement for legal representation is not based on what you actually paid your lawyer, but on a statutory tariff (advokátní tarif). This calculated amount often covers only about 60-80% of actual market-rate legal fees.

Court fees and translation costs are generally fully recoverable if they were necessary for the proceedings. Conversely, if you lose, you must pay your own costs plus the reimbursable costs of the defendant.

Strategic litigation considerations for Chilean companies

Litigation is best suited for disputes where: (1) your legal position is strong; (2) the opposing party has assets in the EU; and (3) you need a binding decision enforceable across the EU.

Arbitration is a strong alternative. If your contract specifies arbitration (e.g., ICC, VIAC, or the Arbitration Court attached to the Czech Chamber of Commerce), the award is enforceable under the New York Convention. Arbitration can be faster (12-18 months) and confidential, though often more expensive due to arbitrator fees.

Mediation is available and courts sometimes encourage it. While a mediation agreement itself acts as a new contract, it can be approved by a court to become directly enforceable.

The Brussels I bis Regulation confirms that jurisdiction clauses in contracts are enforceable. When negotiating with Czech partners, you can agree on Czech courts or courts of another EU member state.

Enforcement

Winning a judgment is only the first step. Enforcement (exekuce) is the process of collecting. Under Czech law, enforcement is typically carried out by private bailiffs (soudní exekutor).

You file an execution proposal, and the bailiff searches for assets. They can freeze bank accounts, deduct form wages, seize movable property, or sell real estate.

The Brussels I bis Regulation allows a Czech judgment to be enforced in any other EU member state without a special declaration of enforceability. This makes a Czech judgment a powerful tool against assets anywhere in the EU (e.g., if the Czech company has a bank account in Germany).

The costs of the execution are primarily borne by the debtor. However, the creditor usually has to advance costs. The bailiff's remuneration is statutory, and if the debtor has no assets, the creditor may have to bear the bailiff's minimum costs.

Special considerations for recognition in Chile

If you obtain a Czech judgment and want to enforce it against assets located in Chile, Brussels I bis does not apply. You would need to proceed under Chilean law regarding the recognition of foreign judgments ( exequatur ), usually before the Supreme Court of Chile. This process checks for reciprocity and compliance with due process but does not re-try the merits.

Key Risks in Cross-Border Litigation and How ARROWS Law Firm Helps

Conclusion

Cross-border litigation for Chilean companies in the Czech Republic requires navigating EU regulations, Czech procedural law, and language barriers. While the Czech legal system is reliable and aligned with EU standards, the procedural complexity makes expert local representation vital.

The decision to litigate should be based on a clear cost-benefit analysis, considering the debtor's assets and the strength of your evidence. ARROWS Law Firm helps you assess these factors early.

If your Chilean company is facing a commercial dispute with a Czech partner, do not attempt to navigate Czech litigation alone. Contact the lawyers at ARROWS Law Firm at consultation@arws.cz for a strategic assessment. We will help you maximize your chances of a successful outcome and actual financial recovery.