How can a Bulgarian company litigate in the Czech Republic

Facing a commercial dispute or Bulgarian company litigation in the Czech Republic? This guide provides specific, practical answers for navigating the Czech legal system. As a leading Czech law firm with a team of English-speaking lawyers, we understand the cross-border challenges you face. Our law firm based in Prague, European Union, is here to protect your interests and provide a safe, effective legal solution.

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 EU Framework: Your Right to Be Heard in the Czech Republic

As your company operates within the EU, you are in a strong position. Cross-border disputes between Bulgarian and Czech entities are not governed by two completely separate national laws, but by a single, unified EU framework.

The primary law is Regulation (EU) No 1215/2012, known as the Brussels I bis Regulation. This regulation was created to facilitate access to justice and ensure the proper functioning of the internal market by unifying the rules for jurisdiction in civil and commercial matters.

What does this mean for your Bulgarian company?

The Brussels I bis Regulation provides highly predictable rules for determining which country's courts can hear your case. The general principle is that a defendant should be sued in the member state where they have their "domicile" (their registered office for a company).

However, the regulation also provides for "special jurisdiction." This allows you, as the claimant, to choose a different court in specific situations. For example:

• In matters relating to a contract, you can sue in the courts for the "place of performance" of the obligation in question.
• In matters relating to a tort (a civil wrong), you can sue in the courts of the place where the harmful event occurred.

This unified system gives your Bulgarian company clear, strategic options for initiating legal action in the Czech Republic.

Enforcing Your Victory: The "Abolition of Exequatur"

The most powerful benefit of this EU framework is the "abolition of exequatur". This means that a judgment in a civil or commercial matter given by a court in one member state (e.g., Bulgaria) is automatically recognized in all other member states (e.g., the Czech Republic) without any special proceedings.

Before this regulation, you had to go through a "validation process" to have your foreign judgment recognized. Now, a final, enforceable judgment from a court in Sofia can be taken directly to an enforcement authority in Prague as if it were a local Czech judgment.

This system creates efficiency, but it also increases the stakes. This "dual-edged sword" of justice means that if your Bulgarian company is the defendant in a Czech lawsuit, you cannot afford to ignore it. A default judgment entered against you in Prague can be rapidly and simply enforced against your assets back in Bulgaria.

This makes having a responsive, expert legal team in Prague essential. Our lawyers are ready to assist you – email us at office@arws.cz.

FAQ – Legal tips about EU Cross-Border Rules

• Is my Bulgarian-drafted contract valid in the Czech Republic?
  Generally, yes, under EU principles (the Rome I Regulation). However, its enforceability in a Czech court may depend on specific Czech mandatory rules or public policy. A legal review is critical to identify any weaknesses. For a contract review, contact us at office@arws.cz.
• What’s the difference between Brussels I bis and the HCCH 2019 Judgments Convention?
  The Brussels I bis Regulation governs the recognition of judgments within the European Union (like a Bulgaria-Czech Republic case). The HCCH 2019 Judgments Convention, which both Bulgaria and the Czech Republic are party to via the EU, extends a similar recognition framework to countries outside the EU. Need help with non-EU enforcement? Write to office@arws.cz.

First Steps: How to File a Commercial Lawsuit in the Czech Republic

If a dispute cannot be resolved, you must initiate a formal lawsuit. This process is precise and front-loads the legal arguments.

What is the pre-litigation process?

Before filing, Czech law and good practice require sending a formal pre-litigation demand letter to the opposing party. This letter clearly outlines the claim, the legal basis, and a final deadline for compliance or payment.

This step demonstrates good faith to the court and formally establishes the dispute. ARROWS can draft and send this formal notice on your behalf as part of our drafting legally required documentation services.

How do I start the lawsuit?

A lawsuit is formally started by filing a statement of claim, known in Czech as a žaloba.

This document is the single most important part of your case. Unlike in some common-law systems, where evidence is revealed slowly, the Czech system places a heavy emphasis on the initial written submissions. Your žaloba must:

• Clearly identify all parties.
• State the complete facts of the case.
• Present all key legal arguments.
• List all the evidence you will rely on (e.g., contracts, invoices, witness testimony).
• State exactly what you are demanding from the court (e.g., "The defendant must pay CZK 1,000,000").

Any errors or omissions in the žaloba can be fatal to your case. This is why professional legal drafting by a Czech-qualified lawyer is a necessity, not a luxury.

Where do I file?

The Czech Republic has two main levels of courts for civil matters: District Courts (okresní soudy) and Regional Courts (krajský soudy). Most significant commercial disputes are heard by the Regional Court as the court of first instance.

Filing in the wrong venue is a common and costly procedural error for foreign parties. It "can cause delays that jeopardize your case".

What are the costs? Understanding Court Fees and the "Loser Pays" Principle

You must pay a court fee at the time you file your žaloba. This fee is based on the value of your claim. For monetary claims over CZK 20,000, the fee is 5% of the claimed amount (up to a cap). This is a major financial consideration. For a claim of €1,000,000 (approx. CZK 25,000,000), the filing fee is €50,000 (CZK 1,250,000).

The Czech Republic follows the "loser pays" principle. The unsuccessful party is generally ordered to reimburse the successful party for:

1. The court fees they paid (e.g., the 5%).
2. The costs of legal representation.

However, there is a crucial detail. The reimbursement for legal fees is typically not your actual lawyer's bill. Instead, it is calculated based on a statutory "Tariff Decree". In practice, the amount reimbursed is "usually lower than the actual costs".

We call this the "recovery gap." ARROWS provides clear, upfront cost-benefit analysis and legal opinions to ensure you understand all financial risks and potential outcomes before you file. For a consultation on your case, email us at office@arws.cz.

Contact our experts:

Initial Filing and Procedural Risks

Risks and penalties	How ARROWS helps
Filing a claim after the statute of limitations has expired (e.g., the general 3-year period for commercial claims). Penalty: Total, irreversible loss of your claim.	Legal analysis: We immediately assess the statute of limitations for your claim. Need to know if your claim is still valid? Email office@arws.cz.
Filing the žaloba (statement of claim) with formal errors, insufficient legal arguments, or missing evidence. Penalty: The court rejects the filing, causing critical delays or dismissal.	Drafting legally required documentation: Our team drafts a precise, legally sound žaloba that meets all procedural requirements. Get your claim filed correctly by writing to office@arws.cz.
Paying the incorrect court fee (5% of the claim) or paying it late. Penalty: The court will not act on your claim and will eventually discontinue the proceedings.	Legal consultations: We provide a full breakdown of all upfront costs, including the 5% court fee, and manage the payment. For immediate assistance, write to us at office@arws.cz.

The Three Critical Compliance Traps for Foreign Companies

Navigating Czech litigation involves avoiding specific local traps that many foreign companies fall into. These procedural mistakes can have case-ending consequences.

1. The Language Barrier: "But I sent it in English."

The official language of all Czech court proceedings is Czech.

While many in the Prague business community speak English, the courts do not. All foreign-language documents you wish to use as evidence—contracts, emails, board minutes, your Power of Attorney—must be submitted with an officially certified translation (soudní překlad).

This is a non-negotiable rule. A court will simply disregard your English-language evidence. As one legal guide notes, "the defendant's competence in English is irrelevant". Submitting a key contract without a certified translation means the court treats it as if it does not exist.

2. The "Data Mailbox" (Datová Schránka): The Silent Deadline You Cannot Ignore

This is the single most dangerous trap for foreign-owned Czech companies.

A Datová Schránka is a mandatory, secure, state-run digital mailbox. It is automatically created for all legal entities registered in the Czech Republic, including a Czech s.r.o. (LLC) that is 100% owned by your Bulgarian parent company.

All official communication from the courts, tax authorities, and other state bodies is sent exclusively to this data box. The critical risk is the "deemed delivery" rule. A document (like a court summons) is considered legally delivered 10 days after it arrives in your data box, even if you never log in and open it.

This system can, and does, lead to legal catastrophe. A foreign-managed company can be sued, the žaloba is delivered to the unmonitored data box, the 10-day "deemed delivery" rule triggers, the court's deadline to respond expires, and the court issues a default judgment against you.

That default judgment is then fully enforceable in Bulgaria under the Brussels I bis Regulation. Your datová schránka must be monitored daily. ARROWS provides this monitoring as a core part of our legal consultations to ensure you are never blindsided.

3. Legal Representation: When is it Advised vs. Mandatory?

In most first-instance commercial proceedings, legal representation is not strictly mandatory. However, for a foreign company unfamiliar with Czech procedure, it is "overwhelmingly advisable". Attempting to navigate the system alone is a false economy.

Crucially, representation by a licensed lawyer is mandatory for certain advanced stages, most notably for filing an extraordinary appeal (dovolání) to the Supreme Court.

If you handle the first instance yourself and make a procedural or legal argument error, you may not only lose your case but also forfeit your very grounds for a future appeal. Engaging expert legal counsel from day one is the only way to protect your rights at all stages of the dispute.

Critical Compliance and Default Judgment Risks

Risks and penalties	How ARROWS helps
Failing to monitor your Datová Schránka (Data Mailbox). Penalty: "Deemed delivery" of a lawsuit, missed deadlines, and a legally binding default judgment issued against you.	Legal consultations: We can manage and monitor your datová schránka to ensure no legal deadlines are ever missed. Need urgent help with your data box? Email office@arws.cz.
Ignoring a default judgment from a Czech court. Penalty: The judgment is automatically recognized in Bulgaria under Brussels I bis and can be used to seize your company's Bulgarian assets.	Representation in court: If a default judgment was wrongly issued (e.g., improper service), we can act immediately to challenge it. Do not delay—write to office@arws.cz.
Submitting key evidence (contracts, company records, emails) in English or Bulgarian without a certified Czech translation. Penalty: The court will disregard your evidence, leading to the collapse of your claim or defense.	Drafting documentation / Legal opinions: We manage the entire certified translation process, ensuring all your evidence is admissible. Need help with translations? Contact us at office@arws.cz.

A Faster, Private Alternative: Commercial Arbitration in Prague

Czech court proceedings can be effective, but they are also public and slow. It is common for a first-instance commercial case to take two to three years. With appeals, a case can last six years or more. For this reason, ARROWS often advises clients to use commercial arbitration.

Why choose arbitration over litigation?

• Speed: Arbitration is "generally less time", often concluding in months, not years.
• Confidentiality: Court hearings are public. Arbitration proceedings are private, protecting your sensitive commercial data and reputation.
• Expertise: In litigation, a judge is assigned to your case. In arbitration, the parties can agree to appoint an arbitrator with deep industry experience in your specific field (e.g., tech, construction, or finance).
• Flexibility: Arbitration allows parties to agree on the rules, the language of the proceedings, and even the location of hearings, including outside the Czech Republic.

A Leading Local Institution: The Prague Arbitration Court

You do not need to go to Vienna or London for world-class arbitration. The Czech Republic has a highly respected international institution: the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic.

This Prague-based court is a leading international body that provides its rules and services in English, German, and French. Its rules allow arbitrators to apply the substantive law chosen by the parties, or even decide a case ex aequo et bono (based on principles of fairness) if, and only if, both parties have explicitly agreed to it.

A Globally Enforceable Decision: The New York Convention

Just as EU court judgments are enforced via Brussels I bis, arbitral awards are enforced globally via the 1958 New York Convention.

Both the Czech Republic and Bulgaria are signatories. This means an arbitral award made in Prague is readily enforceable in Sofia and over 160 other countries, often with more ease than a foreign court judgment.

The best time to plan for a dispute is before it happens. ARROWS, as an international law firm operating from Prague, European Union, strongly advises clients to include a well-drafted arbitration clause in all cross-border contracts. We provide expert contract drafting or review to ensure you are protected.

FAQ – Legal tips about Czech Arbitration

• Is arbitration always cheaper than litigation?
  Not necessarily. While you save on the length of the proceedings, you must pay the arbitrators' fees. However, the "loser pays" principle for costs also generally applies in arbitration. We can help you model the costs. Get in touch at office@arws.cz.

• What if my contract doesn't have an arbitration clause?
  You can still use arbitration if both parties agree to it after the dispute arises. This is called a "submission agreement". Our lawyers can negotiate this for you. Need legal help? Contact us at office@arws.cz.

• Can an arbitral tribunal order interim measures?
  The Czech Arbitration Act does not give the tribunal this power. However, the Czech courts do have jurisdiction to grant interim measures (like freezing a bank account) in support of an arbitration. This requires quick, expert legal action. For immediate assistance, write to us at office@arws.cz.

How ARROWS Provides a Safe Harbour in the European Union

Navigating Czech litigation from Bulgaria requires more than a translator; it requires a strategic partner. You need a firm that understands the local court procedures and the specific risks facing foreign investors.

ARROWS is that partner. Our lawyers combine deep knowledge of the Czech Civil Procedure Code with a broad, international perspective. We support over 150 joint-stock companies and 250 limited liability companies, many with international owners just like you.

Our ARROWS International network, built over 10 years, operates in 90 countries. This gives us the unique ability to coordinate complex, cross-border enforcement—whether that involves assets in Prague, Sofia, or beyond.

A Full Suite of Legal Services to Protect You

We are not just litigators. We are a full-service leading Czech law firm in Prague, EU, dedicated to preventing problems. Our services for our foreign clients include:

• Contract drafting or review to ensure strong arbitration and jurisdiction clauses.
• Preparation of internal company policies to ensure compliance with Czech law.
• Drafting legally required documentation, from the žaloba to certified translation bundles.
• Legal consultations to prevent penalties, including monitoring your datová schránka.
• Legal opinions providing clear analysis of your legal position and financial risks.
• Representation in court or before public authorities, defending your interests with speed and high quality.
• Professional training for employees or management to avoid fines from Czech authorities like the Labour Inspectorate or Data Protection Office.

Do not let a commercial dispute in the Czech Republic derail your business. Let our team of expert English-speaking lawyers take control. Get tailored legal solutions by writing to office@arws.cz.

The Risks of Delay and Inaction

Risks and penalties	How ARROWS helps
Delaying a response to a Czech court summons or datová schránka message. Penalty: You miss the deadline to defend, and a default judgment is issued, making you liable for the full claim.	Representation in court: We provide immediate, rapid-response legal action to meet all deadlines. Do not hesitate to contact our firm – office@arws.cz.
Waiting too long to file your own claim. Penalty: Your claim becomes barred by the statute of limitations, and your right to recover is lost forever.	Legal analysis: We instantly review your case to secure your rights before any deadlines expire. Need urgent legal help? Contact us at office@arws.cz.
Using a non-specialist law firm without cross-border (BG-CZ) experience. Penalty: Missed strategies, procedural errors, and higher costs due to a misunderstanding of the two legal systems.	Legal consultations: Our team has deep experience in cross-border EU litigation. Get expert advice today by writing to office@arws.cz.

FAQ – Most common legal questions about Czech-Bulgarian Litigation

1. Do I need to travel to Prague for the court case?
Not necessarily. As your legal representative, ARROWS can handle most procedural steps on your behalf using a Power of Attorney (which must be correctly legalized and translated). While your testimony might be required at a hearing, many matters can be handled in writing. For a consultation on your case, email us at office@arws.cz.

2. How long does a typical commercial dispute take to resolve in the Czech Republic?
You must be prepared for a long process. A first-instance court case can take 2-3 years. If the case is appealed, the entire process, including a final appeal to the Supreme Court, can take over 6 years. This is why we often recommend arbitration. To discuss a faster solution, write to office@arws.cz.

3. Can I use my Bulgarian lawyer in a Czech court?
An EU lawyer has certain rights to provide services. However, for formal court representation, signing submissions, and navigating the mandatory Czech procedures and language rules, you must use a locally licensed Czech lawyer (Advokát). Our lawyers are ready to assist you – email us at office@arws.cz.

4. What happens if I ignore a Czech court summons delivered to me in Bulgaria?
Do not ignore it. Under EU service regulations, service of documents is streamlined. If you are properly served and fail to respond, the Czech court can (and will) issue a default judgment against you. This judgment is then easily enforceable in Bulgaria. For immediate assistance, write to us at office@arws.cz.

5. What are the main differences between Czech and Bulgarian civil procedure?
Both are civil law systems and, as EU members, share the same high-level regulations on jurisdiction. The core principles are similar. The key differences are not in legal theory but in local practice: the mandatory datová schránka, the specific court fee tariffs, and the strict rules on certified translations. Need a specific comparison? Contact us at office@arws.cz.

6. My company doesn't have a Czech s.r.o. How do I get a Datová Schránka?
While it is mandatory for Czech-registered entities, foreign businesses without a Czech registration can apply for a data box voluntarily. This can simplify communication with Czech authorities. The process requires verified documents. We can handle this application for you. Get tailored legal solutions by writing to office@arws.cz.

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