How can a Belgian company litigate in the Czech Republic

Navigating a commercial dispute in a foreign country can be a significant challenge. For a Belgian company facing litigation in the Czech Republic, understanding the specific legal landscape is the first step toward a successful resolution. This guide provides clear, actionable answers to your most pressing questions about cross-border disputes.

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

The First Critical Question: Where Can Your Lawsuit Be Heard?

When a dispute crosses borders between two EU member states like Belgium and the Czech Republic, the first question is always which country's courts have the authority to hear the case. This is not left to chance; it is governed by a unified set of rules designed to create predictability and fairness for businesses operating within the single market.

Understanding EU Jurisdiction: The Brussels I Recast Regulation

The foundational legal instrument is Regulation (EU) 1215/2012, commonly known as the Brussels I Recast Regulation. This regulation establishes a harmonized system for determining jurisdiction in civil and commercial matters across the European Union. 

Its primary goal is to prevent parties from having to litigate the same issue in multiple countries simultaneously and to ensure that a judgment obtained in one member state can be easily enforced in another, thereby enhancing legal certainty.

Can You Sue (or Be Sued) in the Czech Republic?

The Brussels I Recast Regulation provides a clear hierarchy of rules to determine the appropriate court. For a Belgian company, this means the location for a lawsuit involving a Czech partner is not arbitrary but is based on specific, predictable criteria.

The General Rule: Defendant's Domicile

The primary rule is straightforward: a defendant, whether a person or a company, should be sued in the courts of the member state where they are domiciled. For a company, its domicile is considered its registered office, central administration, or principal place of business. Therefore, if your Belgian company has a dispute with a Czech-domiciled entity, the default venue for the lawsuit is the Czech Republic.

Special Jurisdiction for Contracts

A critical exception to the general rule exists for contractual disputes. Article 7(1) of the Regulation allows a party to be sued in the courts for the "place of performance of the obligation in question". The Regulation further clarifies that for the sale of goods, this is the place of delivery, and for the provision of services, it is the place where the services were provided. This gives the claimant a strategic choice of forum.

For example, if your Belgian company agreed to deliver specialized equipment to a buyer in Prague and payment was not made, you could choose to sue the Czech buyer in the Czech courts—the place of performance—rather than being restricted to the buyer's home jurisdiction. This provision was a significant development, enhancing access to justice for claimants across the EU.

Special Jurisdiction for Torts

For non-contractual claims, known as torts or delicts (e.g., negligence, product liability, unfair competition), Article 7(2) provides another form of special jurisdiction. A claim can be brought in the courts for the "place where the harmful event occurred or may occur". This allows the party that suffered damages to bring the lawsuit in the jurisdiction where the impact was felt.

For instance, if a component manufactured by your Belgian company fails and causes a production shutdown at a factory in the Czech Republic, the Czech company can sue your firm in the Czech courts, because that is where the damage occurred.

Exclusive Jurisdiction

It is important to note that for certain matters, jurisdiction is exclusive and cannot be changed by contract. The most common example for businesses involves disputes over rights to immovable property (real estate), which must be heard by the courts of the country where the property is located.

FAQ – Legal tips about Jurisdiction

• What if our contract has a choice-of-court clause?
  Such clauses, also known as jurisdiction clauses, are generally upheld by the Brussels I Recast Regulation. The parties' autonomy to choose a specific court is respected, and this choice will typically override the default rules, unless it conflicts with rules on exclusive jurisdiction. For a robust legal strategy, contact our experts at office@arws.cz.
• Does it matter where our company has a branch versus its headquarters?
  Yes, it can. Under Article 7 of the Regulation, if a dispute arises from the operations of a branch, agency, or other establishment, a lawsuit can be brought in the courts of the place where that branch is situated. This provides another potential venue for litigation. To assess your company's specific situation, get in touch with us at office@arws.cz.

The Rules of the Game: Which Country's Law Will Apply?

A common misconception is that the court that hears a case will automatically apply its own national laws. This is not the case in the EU. The question of which court has jurisdiction is separate from the question of which country's substantive law applies to the dispute. This distinction is crucial for managing legal risk in any cross-border commercial relationship.

Jurisdiction vs. Applicable Law: A Crucial Distinction

While the Brussels I Recast Regulation determines where you can sue, a different set of EU regulations—the "Rome" regulations—determines which law the court will use to decide the case. A Czech court hearing a dispute with a Belgian company might be required to apply Belgian contract law, or vice versa. Understanding this division is fundamental to developing a sound litigation strategy.

For Contractual Disputes (Rome I Regulation)

Regulation (EC) No 593/2008, or "Rome I," governs the law applicable to contractual obligations. Its guiding principle is party autonomy. The regulation gives parties the freedom to choose the law that will govern their contract, which is typically done through a "governing law" clause. This choice must be made expressly or be clearly demonstrated by the terms of the contract or the circumstances of the case.

If a contract does not contain a governing law clause, Rome I provides default rules. For a contract involving the sale of goods, the applicable law is that of the seller's habitual residence. For a contract for services, it is the law of the service provider's habitual residence.

For Non-Contractual Disputes (Rome II Regulation)

For torts and other non-contractual obligations, Regulation (EC) No 864/2007, or "Rome II," applies. The general rule, established in Article 4, is the principle of lex loci damni—the law of the country in which the damage occurs governs the claim. This rule applies regardless of where the act that caused the damage took place.

This modern approach provides greater certainty, replacing older, more ambiguous rules. However, there are exceptions. If both parties are habitually resident in the same country when the damage occurs, that country's law will apply. The rule can also be displaced if it is clear that the tort is "manifestly more closely connected" with another country.

The separation of rules for contractual and non-contractual matters creates a subtle but significant area of legal risk. A single business relationship can become subject to multiple legal systems. For example, a dispute over payment for a product might be governed by Belgian law (under Rome I), while a claim for damages caused by that same product's defect could be governed by Czech law (under Rome II). This highlights the need for a comprehensive legal strategy that anticipates both types of liability.

Dangers in Determining Jurisdiction and Applicable Law

Risks and penalties	How ARROWS Helps
Ambiguous Contract Terms: Facing litigation in an unforeseen country due to unclear jurisdiction or choice-of-law clauses, leading to high costs and uncertainty.	Contract Drafting & Review: We draft clear, enforceable clauses specifying both jurisdiction and applicable law to prevent future disputes. Need your contracts reviewed? Contact us at office@arws.cz.
Unfavorable "Default" Rules: Being forced to litigate under an unfamiliar legal system (e.g., Czech law applying to a tort claim) because no choice of law was specified.	Legal Opinions: We provide detailed legal opinions on which laws will apply to your specific business operations, allowing for proactive risk management. Want to understand your legal options? Email us at office@arws.cz.
Parallel Proceedings: Risk of facing simultaneous lawsuits in both Belgium and the Czech Republic over the same issue, doubling legal costs and creating conflicting judgments.	Strategic Litigation Counsel: We leverage the rules of the Brussels I Recast Regulation to prevent or manage parallel proceedings effectively. For immediate assistance, write to us at office@arws.cz.
Misinterpreting "Place of Performance": Losing the right to sue in a preferred location because the contractual obligation (e.g., delivery of goods) is not clearly defined.	Legal Consultations: We advise on how to structure your contracts to ensure the "place of performance" aligns with your business's strategic interests. Get tailored legal solutions by writing to office@arws.cz.

 

The Belgian vs. Czech Approach: Key Procedural Differences for Your Business

While EU regulations harmonize the rules on jurisdiction and applicable law, the day-to-day conduct of a lawsuit is governed by national procedural law. Fortunately for a Belgian company, the legal systems of Belgium and the Czech Republic share a common foundation in civil law, making the process more familiar than it might first appear.

Evidence Gathering: A Familiar Landscape

Both Belgium and the Czech Republic are civil law jurisdictions, meaning their legal systems are based on comprehensive, written codes. A key similarity in their court procedures is the absence of the broad, formal "discovery" process common in jurisdictions like the United States or the United Kingdom.

Instead, both systems use an adversarial model where evidence is presented primarily through written submissions with attached exhibits. Parties exchange their arguments and supporting documents according to a procedural calendar before debating the case orally at a hearing. This shared approach means a Belgian company will find the fundamental mechanics of presenting a case in a Czech court to be familiar.

Timelines and Costs: Managing Expectations

Litigation timelines are a critical business consideration. In Belgium, first-instance proceedings can take around a year, but appeals can extend the process significantly, sometimes by several years. The Czech judicial system can also be slow, with court procedures sometimes taking years to conclude, which makes proactive case management essential. For this reason, arbitration is often recommended as a faster alternative in the Czech Republic, typically resolving disputes within a year.

Court fees in the Czech Republic are regulated by law and are generally predictable. For many commercial claims, the fee is calculated as a percentage of the amount in dispute. For claims over CZK 20,000, for example, the court fee is 5% of the claimed amount.

ARROWS' International Advantage

Understanding these cross-jurisdictional nuances is where expert local counsel becomes invaluable. As an international law firm operating from Prague, European Union, ARROWS combines deep knowledge of local Czech procedure with a clear understanding of the expectations of foreign clients. Our ARROWS International network, established over 10 years, enables us to coordinate complex cross-border matters seamlessly, ensuring your case is managed with the efficiency and strategic foresight it requires.

The Czech Litigation Process: A Step-by-Step Guide

Should your company need to initiate or defend a lawsuit in the Czech Republic, understanding the key stages of the process is essential for effective planning and budgeting.

Initiating a Claim in Prague

A commercial lawsuit typically begins in one of the Czech Republic's Regional Courts, which act as the courts of first instance for most significant commercial disputes. The process starts with the filing of a formal action, after which the court requires payment of the relevant court fee to proceed.

The court may then schedule a preliminary hearing. This is a crucial procedural step where the judge can clarify the issues in dispute, encourage the parties to reach a settlement, and establish a timetable for the main proceedings. Active and strategic participation in this hearing can significantly influence the trajectory and efficiency of the case.

Managing Expectations: Costs and Duration in the Czech Courts

It is vital to act promptly when a dispute arises. The general statute of limitations for bringing a commercial claim in the Czech Republic is three years from the date the right could first be exercised (often the due date of an invoice).Missing this deadline can result in the complete loss of your right to claim. While ARROWS is known for its speed and efficiency, it is important to have realistic expectations regarding court timelines, which can be lengthy.

FAQ – Legal tips on Czech Court Procedure

• Is mediation mandatory before going to court in the Czech Republic?
  No, mediation is not a mandatory prerequisite for filing a lawsuit. However, a judge has the authority to suspend proceedings and order the parties to attend at least one meeting with a registered mediator if they believe a settlement is possible. For advice on alternative dispute resolution, please email us at office@arws.cz.
• What happens if the other party ignores the lawsuit?
  A defendant's failure to participate can have serious consequences. If a defendant, without a valid excuse, does not attend a scheduled preliminary hearing, the court may issue a judgment by default in favor of the claimant. To ensure your rights are protected, contact us at office@arws.cz.

Procedural and Financial Risks in Czech Litigation

Risks and penalties	How ARROWS Helps
Missing the Statute of Limitations: Losing the right to claim entirely by failing to file a lawsuit within the strict three-year subjective time limit.	Timely Legal Action: We ensure all claims are filed well within the statutory deadlines to protect your rights. For immediate assistance with a pending claim, write to us at office@arws.cz.
Procedural Delays: Court proceedings becoming stalled due to inefficient case management, leading to increased costs and business disruption.	Representation in Court: Our lawyers actively manage court proceedings to ensure your case progresses as quickly as possible. Need legal representation? Write to us at office@arws.cz.
Improperly Drafted Filings: Having a claim rejected or weakened due to failure to comply with the formal requirements of the Czech Civil Procedure Code.	Drafting Legally Required Documentation: We prepare all court filings and documentation to the highest professional standard, ensuring procedural compliance. Do you need documentation prepared? Contact us at office@arws.cz.
Unpredictable Costs: Litigation costs spiraling due to unforeseen procedural steps or a lack of clear budgeting.	Transparent Fee Structures: We provide clear cost estimates and regular updates, allowing you to budget for legal proceedings effectively. Get tailored legal solutions by writing to office@arws.cz.

 

After the Verdict: Enforcing Your Judgment Across Borders

Securing a favorable court judgment is a major milestone, but it is not the final step. The ultimate goal is enforcement—turning that legal victory into a tangible result, such as the payment of a debt. The EU has created a powerful and streamlined system to ensure this happens efficiently across member states.

You Won in Court. Now What? The Power of the Brussels I Recast Regulation

One of the most significant achievements of the Brussels I Recast Regulation was the abolition of exequatur. This was a cumbersome intermediate procedure where a judgment from one member state had to be formally declared enforceable by a court in another member state before enforcement could begin.

Thanks to this change, a final judgment from a Belgian court is now directly and automatically recognized and enforceable in the Czech Republic, and vice versa. This reform has made cross-border enforcement substantially faster, less expensive, and more certain for businesses across the EU.

How ARROWS Manages Cross-Border Enforcement

While recognition is automatic, the practical steps of enforcement are governed by Czech national law. This involves presenting the foreign judgment, along with a standard certificate issued by the original court under Article 53 of the Regulation, to the competent Czech enforcement authorities, typically a licensed court bailiff. ARROWS manages this entire process, ensuring all procedural requirements are met for a swift and effective execution of the judgment.

Risks in Judgment Recognition and Enforcement

Risks and penalties	How ARROWS Helps
Refusal of Recognition: A judgment being refused enforcement on very limited grounds, such as being manifestly contrary to public policy in the Czech Republic.	Legal Analysis: We analyze foreign judgments to ensure they meet all criteria for seamless recognition and enforcement in the Czech Republic. Want to understand your enforcement options? Email us at office@arws.cz.
Procedural Errors in Enforcement: Failing to provide the correct documentation (e.g., the certified judgment and Article 53 certificate) to Czech authorities, delaying collection.	Representation Before Public Authorities: We manage the entire enforcement process, liaising with court bailiffs and ensuring all procedural formalities are correctly handled. Our lawyers are ready to assist you – email us at office@arws.cz.
Debtor Hiding Assets: The opposing party attempting to move or conceal assets to frustrate enforcement of the judgment.	Asset Tracing and Interim Measures: We can act to secure assets, sometimes even before a final judgment is issued, ensuring there are assets available to satisfy the claim. Do not hesitate to contact our firm – office@arws.cz.
Delays in the Enforcement Process: Facing bureaucratic hurdles or delays with local enforcement agents, preventing timely recovery of funds.	Efficient Project Management: Leveraging our experience with Czech enforcement agents, we push for the swift execution of judgments to secure your funds. Need legal help? Contact us at office@arws.cz.

Your Strategic Partner in Prague: How ARROWS Delivers a Solution

Cross-border litigation within the European Union is governed by a sophisticated, harmonized system. While this framework provides predictability, navigating it effectively to protect your company's interests requires expert local counsel with proven international experience. Success depends not just on knowing the rules, but on knowing how to use them strategically.

What's Your Next Step?

ARROWS is a leading Czech law firm based in Prague, European Union, uniquely positioned to assist Belgian and other foreign companies. Our reputation is built on speed, quality, and a deep understanding of the challenges international businesses face. We support over 150 joint-stock companies and 250 limited liability companies, and our network operates in 90 countries, giving us a truly global perspective.

Our services are designed to provide comprehensive support, from proactive risk management to resolute advocacy in court. We offer Representation in court or before public authorities, Contract drafting or review to prevent future disputes, insightful Legal opinions to inform your strategy, and Preparation of internal company policies. We can also provide Professional training for employees to ensure compliance and minimize legal risk.

Whether you are contemplating litigation, facing a lawsuit, or seeking to secure your commercial relationships, the complexities of cross-border law demand expert guidance. Contact our team of English-speaking lawyers in Prague to discuss your situation. For a confidential consultation, write to us at office@arws.cz.

FAQ – Most common legal questions about Belgian-Czech Litigation

• Our contract says "Belgian law applies." Does this mean we can only sue in Belgium?
  Not necessarily. A "governing law" clause is distinct from a "jurisdiction" or "choice-of-court" clause. The former determines which country's laws are used to interpret the contract (governed by the Rome I Regulation), while the latter determines where a lawsuit can be filed (governed by the Brussels I Recast Regulation). Without a specific jurisdiction clause, the default EU rules will apply. For a full analysis of your contract, our lawyers are ready to assist you – email us at office@arws.cz.
• How long does a typical commercial lawsuit take in the Czech Republic?
  While every case is different, it is realistic to expect first-instance court proceedings in the Czech Republic to take several years to reach a final decision. The complexity of the case, the court's workload, and the tactics of the opposing party can all influence the timeline. To discuss strategies for expediting your case, do not hesitate to contact our firm – office@arws.cz.
• Is arbitration a better option than court litigation in the Czech Republic?
  Arbitration is often a highly effective alternative. It is typically much faster, with most disputes at the Czech Arbitration Court resolved within one year, and the proceedings are more informal and confidential than public court trials. We frequently recommend including an arbitration clause in commercial contracts. Get tailored legal solutions by writing to office@arws.cz.
• Can we recover our attorney's fees if we win a case in a Czech court?
  Yes. The Czech legal system follows the principle that the losing party pays. A successful party is generally entitled to have its reasonable legal costs, including court fees and attorney's fees, reimbursed by the unsuccessful party, as determined by the court in its final judgment. Need legal help? Contact us at office@arws.cz.
• We received a judgment from a Czech court. Is it automatically valid in Belgium?
  Yes. Under the Brussels I Recast Regulation, a judgment in a civil or commercial matter given by a court in any EU member state is recognized in all other member states without any special procedure being required. This principle of reciprocal recognition is a cornerstone of the EU's area of justice. For assistance with enforcing a judgment, write to us at office@arws.cz.
• What are the first steps if our Belgian company receives a writ of summons from a Czech court?
  The most important step is to act immediately and not ignore the document. You must respond within the deadlines set by the court to avoid a default judgment. You should immediately engage a Czech law firm to review the claim, advise you on your legal position, and prepare a defense. For immediate assistance, write to us at office@arws.cz.

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