How can a German company litigate in the Czech Republic

Facing a legal dispute in the Czech Republic? As a German business, you need a legal partner who understands both your market and the nuances of Czech law. This guide offers clear answers on Czech litigation for German companies, explains civil procedure, and shows how an English-speaking lawyer in Prague can protect your financial interests. ARROWS, a leading Czech law firm, helps foreign clients navigate the Czech legal landscape, manage risks, and achieve successful outcomes.

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 Cross-Border Advantage: Why EU Law Makes Czech Litigation Safer Than You Think

When facing a dispute abroad, the primary concern for any business is uncertainty. Will a favorable court judgment in one country be recognized in another? Fortunately, for German companies operating within the European Union, a robust legal framework exists to eliminate this risk, creating a secure environment for cross-border commerce and legal action.

Understanding the Brussels I (recast) Regulation

The cornerstone of this security is the EU's Regulation (EU) No 1215/2012, commonly known as the Brussels I (recast) Regulation. This regulation establishes clear rules for determining which country's courts have jurisdiction in a civil or commercial dispute and, most importantly, it radically simplifies the process of enforcing judgments across EU member states.

The single most significant change introduced by this regulation was the abolition of exequatur. Previously, a judgment from a German court would need to go through a second, often lengthy and costly, court procedure in the Czech Republic to be declared enforceable. This intermediate step created a major barrier to cross-border litigation. 

Now, that barrier is gone. A final judgment from a competent German court is directly enforceable in the Czech Republic, and a Czech judgment is directly enforceable in Germany. This transforms a complex international problem into a much more straightforward domestic enforcement matter, providing a legal and psychological safety net for your business.

Determining Jurisdiction: Which Court Hears Your Case?

The Brussels I (recast) Regulation also provides clear rules to prevent "forum shopping" or disputes over where a case should be heard. The general rule is that a defendant should be sued in the courts of their country of residence.

However, there are critical exceptions for commercial matters. For example, in disputes relating to a contract, the case can be brought before the courts for the "place of performance of the obligation in question". This means if you had a contract for goods to be delivered or services to be performed in the Czech Republic, Czech courts would likely have jurisdiction. 

The regulation also strengthens the validity of exclusive jurisdiction clauses in contracts, preventing tactical lawsuits in other countries designed purely to cause delays—a practice known as "torpedo actions". Expert contract drafting is essential to secure the most favorable jurisdiction from the outset.

FAQ – Legal tips on the EU Framework

• Can a judgment from my German court be enforced in the Czech Republic?
  Yes. Thanks to the Brussels I (recast) Regulation, a final judgment in a civil or commercial matter from a German court is directly enforceable in the Czech Republic without needing a separate declaration of enforceability. Our lawyers can manage the entire process of domesticating the judgment for enforcement. For immediate assistance, write to us at office@arws.cz.
• Which country's court has jurisdiction in a contract dispute?
  The general rule is the defendant's place of domicile. However, for contracts, it can also be the place where the goods were delivered or services were performed. A well-drafted contract can specify an exclusive jurisdiction, which is now strongly protected under EU law. Need your contracts reviewed? Contact us at office@arws.cz.
• What is "abolition of exequatur" and why does it matter for my business?
  Exequatur was a mandatory court proceeding required to declare a foreign judgment enforceable. Its abolition means a German judgment is now automatically recognized and can be enforced in the Czech Republic directly. This saves significant time and money, making cross-border claims enforcement faster and more predictable. Get tailored legal solutions by writing to office@arws.cz.

Critical First Steps: Navigating Key Procedural Differences

While EU law provides a solid foundation, success in Czech litigation hinges on understanding and respecting local procedural rules. German companies often make costly assumptions based on their familiarity with the German legal system. These seemingly minor procedural differences can have severe financial consequences.

The Pre-Action Letter: A Costly Mistake for German Companies

In Germany, sending a Mahnung (demand letter) is a standard part of the pre-litigation process. It is natural to assume that sending a similar letter to a Czech debtor is sufficient. This is a critical and expensive error. The Czech Code of Civil Procedure mandates that a creditor send a specific pre-action letter to the debtor at least seven days before filing a claim in court.

This is not just any demand letter. To be legally compliant, it must contain an explicit warning of the creditor's intent to file a lawsuit. If this specific notice is not sent and properly documented, a Czech court will almost certainly refuse to award you your legal costs, even if you win the case on its merits. This procedural misstep can turn a clear legal victory into a significant financial loss, as you would be forced to bear the full cost of the litigation yourself.

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Filing a Lawsuit (Žaloba): Meeting the Czech Evidentiary Standard

A civil proceeding in the Czech Republic is formally initiated by filing a lawsuit, known as a žaloba (statement of claim), with the competent court. The party filing the claim is the plaintiff (žalobce), and the party being sued is the defendant (žalovaný).

The žaloba must contain all essential information, including the identification of the parties, a clear description of the facts, the legal grounds for the claim, the evidence you intend to rely on, and precisely what you are asking the court to order (the petit). 

A key difference from some German procedures is the Czech system's emphasis on a well-supported initial filing. To take advantage of streamlined procedures, your claim must be persuasive and backed by clear documentary evidence from day one.

Risks and penalties	How ARROWS helps
Using a standard German Mahnung. Your demand letter fails to meet Czech legal standards, leading to the forfeiture of your right to recover legal costs if you win in court.	Drafting legally required documentation – We ensure your pre-action letter meets all Czech legal standards to protect your financial interests. Need help? Contact us at office@arws.cz.
Filing a claim with weak evidence. Your claim may be rejected at the initial stage, or your position will be significantly weakened if the case becomes contested.	Legal analysis – We review your documentation to build a compelling and persuasive case that meets the expectations of the Czech courts. Get a case review at office@arws.cz.
Missing the statute of limitations. The general limitation period for commercial debts is three years. If missed, your claim becomes legally unenforceable.	Legal consultations – We assess your claim's validity and timeline to ensure your rights are exercised in a timely manner. For immediate assistance, write to us at office@arws.cz.

The Czech Court Process: A Step-by-Step Guide for Foreign Businesses

The structure of Czech civil proceedings can differ significantly from what German companies are used to. Understanding this process is key to managing expectations regarding timelines, costs, and outcomes.

The 'Platební Rozkaz' (Payment Order): More Than a German 'Mahnbescheid'

For many monetary claims, the Czech process begins with an application for a platební rozkaz (payment order). This is where another critical difference emerges. The German Mahnverfahren, which results in a Mahnbescheid, is a highly automated, administrative process where the court's initial role is primarily to check for formal correctness.

The Czech platební rozkaz is fundamentally different: it is a judicial process from the very beginning. A Czech judge personally reviews the application and the submitted evidence. The judge must be convinced from the facts presented that the claim is justified before issuing the order. 

This "judicial scrutiny gap" means that a claim that might easily pass the administrative filter in Germany could be rejected in the Czech Republic if the evidence is not presented clearly and persuasively. A simple translation of a German approach is not enough; the case must be prepared for judicial review from the start.

From Objection ('Odpor') to Full Trial: What to Expect

If the defendant files an odpor (objection) with the court within 15 days of receiving the platební rozkaz, the payment order is automatically cancelled. This is a critical turning point. The case is then transformed into a standard civil lawsuit, which significantly increases its complexity, cost, and duration.

Once a case becomes contested, you should be prepared for a much longer process. It can easily take two to three years to obtain a final judgment at the first-instance court. This stage involves court hearings where parties present arguments, submit further evidence (such as witness testimony or expert reports), and engage in oral debate. A decision from the first-instance court can be challenged through an appeal (odvolání). At this stage, skilled legal representation in court becomes absolutely essential.

The Role of the Judge and Evidence in Czech Courts

The Czech legal system, like the German one, is inquisitorial, meaning the judge plays an active role in the proceedings. There is no jury; the judge or a panel of judges decides the case. While the judge can take evidence on their own initiative if necessary, the primary responsibility to propose and provide evidence to support a claim lies with the parties to the dispute.

Unlike common law systems (e.g., the US or UK), there is no extensive pre-trial "discovery" phase where parties exchange all relevant documents. Instead, evidence is typically presented and examined during the court hearings as directed by the judge. Admissible forms of evidence are broad and include documents, witness statements, expert opinions, and inspections. As an international law firm based in Prague, European Union, our litigators have extensive experience presenting evidence effectively before Czech judges.

Risks and penalties	How ARROWS helps
Procedural errors in court filings. A simple mistake in court filings or missing a deadline can lead to the dismissal of an otherwise valid claim.	Representation in court – Our experienced litigators ensure all procedural rules of the Czech legal system are followed meticulously. Need legal representation? Write to office@arws.cz.
Lengthy and costly court proceedings. Contested cases can drag on for years, accumulating significant legal fees and consuming valuable management time.	Strategic Case Management – We pursue the most efficient path to resolution, advising on the strengths and weaknesses of your case to decide between litigation or settlement. Get tailored legal solutions by writing to office@arws.cz.
Ineffective presentation of evidence. The court may not give due weight to your evidence if it is not presented according to local legal practice and judicial expectations.	Courtroom Expertise – Our lawyers know how to structure and present evidence persuasively to Czech judges, maximizing its impact. Our lawyers are ready to assist you – email us at office@arws.cz.

Financial Realities: Understanding Costs, Recovery, and Enforcement

A successful litigation strategy must be grounded in a clear understanding of the financial implications. This includes how costs are calculated, the potential for their recovery, and the practical steps required to enforce a judgment and secure your money.

How Are Litigation Costs Calculated and Recovered?

The cost structure for litigation in the Czech Republic differs from that in Germany. In Germany, legal and court fees are typically calculated according to statutory schedules based on the value of the dispute, as defined in the Lawyers' Remuneration Act (Rechtsanwaltsvergütungsgesetz - RVG) and the Court Costs Act (Gerichtskostengesetz - GKG).

In the Czech Republic, court fees are generally calculated as a percentage of the amount being claimed. For example, the fee is often 5% of the value of the dispute up to a certain threshold. The most important principle for any claimant is that in the Czech legal system, the losing party is generally ordered to reimburse the successful party for its reasonable legal costs.

This "loser pays" principle is a powerful tool, but it is not automatic. The ability to recover your costs is directly tied to your compliance with all procedural rules. As highlighted earlier, a single failure—such as not sending the correct pre-action letter—can eliminate your right to cost recovery. Therefore, expert local guidance is not a cost center; it is the key to unlocking full financial recovery and ensuring a successful outcome.

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Securing Your Victory: Enforcing a Czech Judgment

Obtaining a final, enforceable court judgment is only half the battle. The final step is converting that judgment into payment. In the Czech Republic, the enforcement of court decisions is carried out by a judicial executor (soudní exekutor).

A Czech exekutor has extensive powers to seize a debtor's assets to satisfy a judgment. These powers include freezing and seizing funds from bank accounts, placing liens on real estate, garnishing wages or other income, and seizing movable property such as vehicles, machinery, and inventory. ARROWS manages this entire process, ensuring that once a judgment is secured, swift and effective action is taken to enforce it.

Risks and penalties	How ARROWS helps
Debtor declares insolvency. All individual collection efforts are automatically stopped. Failure to act quickly can mean losing your place among creditors and recovering little to nothing.	Representation in Insolvency – We immediately register your claim in the official insolvency proceedings to protect your rights and maximize your recovery. For immediate assistance, write to us at office@arws.cz.
Inefficient enforcement process. Delays in engaging an exekutor or providing incorrect information can give the debtor time to hide or transfer assets, making recovery impossible.	Enforcement Management – We manage the entire enforcement process, from selecting the right exekutor to providing all necessary documentation for swift action. Need legal help? Contact us at office@arws.cz.
Pursuing a debtor with no assets. Incurring significant legal and enforcement costs trying to collect a debt from a company or individual that is truly without assets.	Legal Opinion – Our process can include investigating a debtor's assets to provide a clear legal opinion on the viability of enforcement, helping you avoid wasting money on an unrecoverable debt. Do not hesitate to contact our firm – office@arws.cz.

FAQ – Legal tips on costs and enforcement

• What assets can a Czech exekutor seize?
  An exekutor has broad powers and can seize a wide range of assets, including funds in bank accounts, real estate, company shares, vehicles, equipment, and other valuable movable property. The goal is to secure assets sufficient to cover the debt, interest, and costs of the proceedings. Get tailored legal solutions by writing to office@arws.cz.
• What happens if the debtor has no assets?
  If a debtor is truly insolvent or has no seizable assets, recovery can be impossible. This is why we can provide asset tracing services and a clear legal opinion before you incur significant costs. We provide practical advice to help you avoid spending good money to chase a bad debt. For an assessment, email us at office@arws.cz.

Your Strategic Partner in Prague: Why ARROWS is the Right Choice

Navigating a foreign legal system requires more than just a translation of the law; it demands a partner who understands the local culture, the unwritten rules of the courtroom, and the specific challenges faced by international businesses. As a leading Czech law firm in Prague, EU, ARROWS is uniquely positioned to be that partner for German companies.

Our team combines deep, nuanced knowledge of the Czech courts with a broad international perspective. We have a proven track record, supporting over 150 joint-stock companies and 250 limited liability companies with their legal needs [User Query]. Our expertise is not confined to the Czech Republic. Through the ARROWS International network, built over 10 years, we operate in 90 countries, giving us the global reach necessary to handle complex, multi-jurisdictional disputes.

We offer a comprehensive suite of services designed to protect you at every stage of a dispute, including:

• Legal consultations to assess your case and prevent penalties.
• Contract drafting or review to secure your position from the start.
• Drafting legally required documentation, like the critical pre-action letter.
• Representation in court or before public authorities by skilled litigators.
• Legal opinions on the viability of enforcement.
• Professional training for employees on Czech legal compliance.

At ARROWS, we are known for our speed, high quality, and business-minded approach. We welcome innovative ideas and can even connect clients with mutual business interests. We are more than just lawyers; we are your strategic advisors in the heart of Europe.

FAQ – Most common legal questions about Czech litigation

• What is the statute of limitations for a commercial claim in the Czech Republic?
  The general limitation period for claims arising from commercial contracts is three years from the date the invoice was due. It is crucial to act before this deadline expires. However, if the debtor acknowledges the debt in writing, a new 10-year limitation period begins. For an urgent review of your claim, contact us at office@arws.cz.

• Can I use my German lawyer for a Czech court case?
  While your German counsel provides essential background, all proceedings in Czech courts must be conducted in the Czech language, and representation before most courts requires a lawyer licensed by the Czech Bar Association. Our English- and German-speaking lawyers can work closely with your in-house team to ensure a seamless strategy. Need local representation? Email us at office@arws.cz.

• Do documents submitted to a Czech court need to be in Czech?
  Yes, all official submissions and evidence presented to a Czech court must be in the Czech language. Any foreign-language documents, such as contracts or correspondence, must be submitted with a certified translation. ARROWS manages this entire process to ensure all your documentation is court-ready. Our lawyers are ready to assist you – email us at office@arws.cz.

• Is it possible to settle a case out of court in the Czech Republic?
  Absolutely. In many cases, a negotiated settlement is the most time- and cost-effective solution. We are experienced negotiators and can help facilitate a settlement at any stage of the dispute, drafting a legally binding agreement to ensure the matter is resolved permanently. Get tailored legal solutions by writing to office@arws.cz.

• What is the difference between a District Court and a Regional Court?
  In the Czech system, District Courts (okresní soudy) are generally the courts of first instance for most civil and commercial disputes. Regional Courts (krajské soudy) handle more complex cases at first instance (e.g., intellectual property, certain corporate disputes) and also act as appellate courts for decisions from the District Courts. Do not hesitate to contact our firm for a case assessment – office@arws.cz.

• My Czech partner has become insolvent. Is it too late to act?
  No, but you must act quickly. Once formal insolvency proceedings begin, all individual lawsuits and enforcement actions are stayed (stopped). You must register your claim with the insolvency court by a strict deadline to be included as a creditor. We provide urgent representation in insolvency matters to protect your claim. For immediate assistance, write to us at office@arws.cz.

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