Irish Company and Czech Partner

Need advice on this topic? Contact the ARROWS law firm by email consultation@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

Where Do I Sue? The 'Jurisdiction' Question

When your business partner is based in Prague, Brno, or elsewhere in the Czech Republic, your first question is one of location: must you sue in the Czech Republic, or can you use the Irish courts?

The answer is governed by EU law, specifically Regulation (EU) No 1215/2012, or 'Brussels I bis'. This regulation creates a uniform set of rules for all member states and takes precedence over national laws in cross-border cases.

The general rule of the Regulation is simple: a defendant must be sued in the courts of the EU member state where they are domiciled. For your Czech partner, this means the default venue for a lawsuit is the Czech courts.

However, Brussels I bis provides powerful exceptions. If your contract contains a well-drafted choice of court clause (also known as a jurisdiction clause) that explicitly names the courts of Ireland, this agreement will almost certainly be upheld.

A second key exception exists for contractual disputes. You may have the option to sue in the courts for the "place of performance". If your Czech partner was obligated to deliver goods or perform a service in Ireland, you may have a strong strategic right to bring the case before an Irish court.

This initial decision on jurisdiction is a critical strategic move that dictates the entire dispute. The expert lawyers at ARROWS can immediately provide a legal analysis of your contract and commercial correspondence to determine the most advantageous venue for your claim. For an expert assessment, contact us at consultation@arws.cz.

Contractual & Jurisdictional Pitfalls

Whose Law Applies? The 'Governing Law' Question

A common mistake is to confuse jurisdiction (where you sue) with governing law (which country's law the court applies). They are two separate questions, and a Czech court can, in many cases, apply Irish law.

This issue is decided by another key EU law, Regulation (EC) No 593/2008, or 'Rome I'.

Like Brussels I bis, the Rome I regulation prioritises party freedom. If your contract clearly states it is "governed by the laws of Ireland," a Czech court must honour that choice and apply Irish law to your dispute.

What if your contract is silent, or you don't have a formal written contract? In that case, default rules apply. For a sale of goods, the law of the seller's residence usually applies. For the provision of services, it is the law of the service provider's habitual residence.

This has huge implications. If you hired a Czech company to provide a service, and you have no governing law clause, your dispute will almost certainly be governed by Czech law.

The Most Dangerous Mistake: The Statute of Limitations

Time is not on your side. One of the biggest shocks for Irish companies is the dramatic difference in the time limits to make a claim.

In Ireland, the Statute of Limitations Act provides that for a simple contract debt (like an unpaid invoice), you have six years to initiate legal proceedings.

In the Czech Republic, the general limitation period for a commercial claim is only three years.

If your dispute is governed by Czech law and you wait longer than three years from the date the invoice was due, your claim will be "statute-barred". This means that even if the debt is valid, a court can no longer enforce it. You will lose your money permanently.

Do not wait. The team at ARROWS can provide an immediate legal opinion on your limitation period to ensure your rights are protected. For an urgent analysis, write to consultation@arws.cz.

Is There a Fast-Track for Uncontested Debts?

Yes. If your Czech partner is not disputing the invoice but has simply stopped communicating and paying, you may not need a full, lengthy lawsuit. The EU provides two highly effective fast-track tools.

1. European Payment Order (EPO): This is designed specifically for uncontested monetary claims in cross-border cases. You file a standard form, and no court hearing is required. If the debtor does not formally object within 30 days, the EPO becomes automatically enforceable and can be sent directly to a Czech enforcement agent.

2. European Small Claims Procedure (ESCP): This can be used for any claim (even disputed) with a value up to €5,000. It is a simplified, faster process, often handled in writing, designed to be cheaper and quicker than a full trial.

While designed to be simpler, these forms require legal and procedural precision. ARROWS can prepare and file these EU documents on your behalf to secure your payment with maximum speed.

Suing in the Czech Republic: Key Differences from Irish Courts

If the debt is contested and you must litigate in the Czech Republic, you cannot assume the process is the same as in Dublin. The Czech system is based on "Civil Law," which is procedurally very different from Ireland's "Common Law" system.

The single biggest difference is the lack of a "discovery" phase. In the Irish High Court, parties engage in an extensive discovery process where they are obligated to disclose all relevant documents to each other.

The Czech legal system has no equivalent to discovery. You cannot file a claim and hope to find the evidence you need from the other side later. This "fishing expedition" is not permitted.

The plaintiff (you) has the full "burden of proof" from the very beginning. You must gather and submit all of your evidence—contracts, emails, delivery notes, and correspondence—at the start of the lawsuit.

Our litigators specialize in representing foreign clients before Czech courts. We build your case before filing to meet this high burden of proof and ensure your claim is robust from day one. For representation in court, write to consultation@arws.cz.

The €10,000 Mistake: The 7-Day Pre-Action Letter

This is a critical, costly procedural trap unique to Czech law that can wipe out your financial victory.

Before filing a lawsuit for payment, Czech law requires you to send a specific statutory pre-action demand letter to the debtor. This letter must give them a final chance to pay, at least 7 days before the lawsuit is filed with the court.

Here is the financial trap: If you fail to send this specific letter (or, crucially, if you cannot prove to the court that you sent it), you will still win your case for the debt, but the court will not order the debtor to reimburse your legal costs. You could win a €100,000 judgment but be forced to pay €10,000 in your own lawyer's fees—a 10% loss caused by a simple procedural error.

ARROWS ensures all statutory documentation is perfectly prepared, sent, and documented, protecting your right to full reimbursement. Don't risk your legal costs. 

Procedural & Financial Risks in Czech Litigation

I Have a Judgment. How Do I Get Paid?

This is where the EU system provides the best news. Thanks to the Brussels I bis Regulation, the "free movement of judgments" is now a reality.

The old, cumbersome procedure known as exequatur—which required a creditor to essentially "sue" on their foreign judgment in a local court to have it recognized—has been completely abolished within the EU.

A judgment obtained from a Czech court is automatically recognized and directly enforceable in Ireland, and a judgment from an Irish court is directly enforceable in the Czech Republic.

To begin enforcement (e.g., seizing bank accounts or assets), you simply need to provide the enforcement authorities with two documents:

1. A copy of the judgment.

2. A standard EU certificate (known as the "Annex I certificate").

This certificate is issued by the original court (e.g., in Prague) and confirms the judgment is enforceable. ARROWS handles the entire process, from winning the judgment to obtaining this certificate and coordinating with local enforcement agents.

ARROWS: Your International Partner in the Czech Republic

A cross-border dispute is not just a legal problem; it's a business problem. You need a partner in the Czech Republic who understands both and can act with the speed your business demands.

ARROWS solves complex international and commercial issues daily. We are not just a local firm; we are a key part of the ARROWS International network, built over ten years, connecting us with trusted legal partners across Europe, including Ireland. This allows us to coordinate seamlessly on matters requiring action in both jurisdictions.

We have deep experience supporting corporate clients. Our portfolio includes over 150 joint-stock companies, 250 limited liability (s.r.o.) companies, and 51 municipalities and regions who trust us with their legal work.

We also believe in connecting our clients. We actively look for business and investment opportunities between our partners, and we are always happy to hear your business ideas.

Stop letting unpaid Czech invoices disrupt your Irish business. Let our experts take over.