How to Resolve Legal Disputes in the Czech Republic as a Chinese Company: A Practical Guide to Litigation

Chinese companies operating in the Czech Republic face a complex landscape when commercial disputes arise. Whether your Czech business partner stops paying, breaches a key contract, or refuses to honor agreed obligations, understanding how Czech civil litigation works—and how it differs fundamentally from Chinese legal practices—can mean the difference between successful recovery and financial loss.

Understanding the Czech civil justice system as a foreign investor

When a Chinese company encounters a dispute with a Czech partner or customer, the first critical decision is understanding where and how to pursue recovery. The Czech Republic operates within the European Union framework.

This means that any judgment you obtain in Czech courts becomes automatically enforceable throughout the entire EU under the Brussels I bis Regulation without requiring additional recognition procedures. This is fundamentally different from dealing with enforcement in China, where practical enforcement of foreign judgments remains administratively complex and less predictable than the automatic mechanism available within the EU.

The Czech civil justice system is built on civil law traditions, not common law principles. This distinction matters enormously in practice. Unlike litigation in common law jurisdictions, Czech procedure emphasizes written submissions over oral arguments and places the burden of proof entirely on the parties.

The judge does not investigate your case for you. Instead, the court expects you to arrive with your evidence already organized, translated, and properly presented from day one. ARROWS Law Firm regularly represents Chinese clients in Czech courts and understands the procedural pitfalls that foreign entrepreneurs face.

The Czech court system: structure and jurisdiction

Before filing any claim, you must understand which Czech court has authority to hear your case. The Czech Republic maintains a hierarchical court system comprising district courts, regional courts, high courts, and the Supreme Court.

For most commercial disputes, district courts serve as courts of first instance, although certain specialized matters (such as specific intellectual property disputes or corporate status matters) require regional court jurisdiction. Jurisdiction in cases involving Chinese companies is determined primarily by the Brussels I bis Regulation or the Czech Act on Private International Law. The general rule is straightforward: a defendant domiciled in the Czech Republic should be sued in Czech courts.

However, if your contract with your Czech partner contains a choice-of-court clause specifying a different jurisdiction, that contractual agreement typically controls.

ARROWS Law Firm has handled numerous cases where Chinese companies filed claims in the wrong Czech court or failed to properly identify the correct defendant, resulting in costly procedural litigation that could have been avoided with proper pre-filing analysis.

Pre-filing investigation: the foundation of successful Czech litigation

The most common mistake made by Chinese entrepreneurs is treating jurisdiction, defendant identification, and evidence collection as matters that can be fixed later. In Czech litigation, later is often too late.

The burden of proof falls entirely on you as the claimant, and the court expects you to have your entire case built before filing. Before filing any claim in a Czech court, take time to verify several critical facts. First, determine the exact legal identity of your defendant. Is it a Czech limited liability company (s.r.o.) or a joint-stock company (a.s.)?

If you sue a subsidiary when you should have sued the parent company, or if you serve a branch office when the Czech registration is in the parent's name, your judgment may be unenforceable against the party actually holding the assets.

Second, investigate whether your claim should be pursued as a payment order (platební rozkaz) or as a full disputed case. For undisputed monetary claims—situations where the debtor simply refuses to pay but has no legitimate legal defense—Czech law offers an accelerated "payment order" procedure that can result in a final, enforceable judgment without a formal hearing.

Third, determine whether you must first send a formal pre-litigation demand letter (předžalobní výzva). Czech law requires that you send the debtor a formal written demand at least seven days before filing the lawsuit. The purpose is to demonstrate good faith and to make cost recovery possible if you eventually win.

Risks and Sanctions	How ARROWS Helps (office@arws.cz)
Wrong court selected: Filing in a court lacking jurisdiction results in transfers or dismissal, wasting months and extending the dispute timeline unnecessarily.	Jurisdiction analysis: ARROWS Law Firm identifies the correct Czech court for your specific claim through detailed jurisdictional analysis of your contract, defendant location, and dispute nature, ensuring your claim proceeds efficiently.
Incorrect defendant named: Suing the Czech subsidiary when the parent company holds assets, or vice versa, results in an unenforceable judgment that cannot be used to collect against the actual debtor.	Defendant identification: ARROWS lawyers verify the exact legal entity, corporate structure, branch status, and asset location before filing, ensuring enforcement is possible against the party that can actually pay.
Skipped pre-litigation letter: Filing directly to court without sending the required formal demand letter results in denial of cost recovery even if you win, leaving you to bear your own legal expenses.	Pre-litigation strategy: ARROWS Law Firm sends properly formatted demand letters (předžalobní výzva) meeting all statutory requirements, protecting your right to recover costs and encouraging voluntary settlement before litigation.
Inadequate evidence gathered: Filing without certified translations, contracts, invoices, and payment records means the Czech court will disregard critical documents and rule against you based on incomplete evidence.	Evidence preparation: ARROWS prepares complete evidence packages including officially certified translations (soudní překlad), organized timelines, and supporting documentation structured for Czech court requirements.

The language and translation barrier: a legal requirement, not a courtesy

One of the most underestimated obstacles for Chinese companies is the requirement that all court proceedings must be conducted exclusively in Czech.

Any document submitted in English, Mandarin, or any other foreign language is legally inadmissible as evidence unless accompanied by an officially certified translation (soudní překlad). If you submit a contract in English to a Czech court, even if both parties speak English fluently and the contract was originally signed in English, the Czech judge cannot consider that English version as evidence. The court will simply ignore it.

You must provide an officially certified Czech translation prepared by a translator registered with the Czech Ministry of Justice. The court will pay for interpretation services during hearings if you do not understand Czech, but all written documents must be translated at your expense before filing.

ARROWS Law Firm maintains relationships with certified translators authorized by the Czech Ministry of Justice and can arrange rapid, professional translation of your commercial contracts, invoices, correspondence, and other evidence.

Filing your claim: procedural requirements and common mistakes

Once you have completed your pre-filing investigation and gathered your evidence, you are ready to file your formal claim (žaloba). The Czech claim is not a narrative explanation of your grievances.

Instead, it is a legally structured document that must meet specific formal requirements defined in the Czech Code of Civil Procedure. Czech courts allow claims to be filed electronically via certified email signature or through the Czech "Data Box" (datová schránka) system, which is mandatory for most legal entities and attorneys.

However, if you submit a claim by ordinary email without the required certified electronic signature, you have three days to "cure" the defect by supplementing it with the original or a qualified electronic submission.

The court fee is mandatory and must be paid when you file your claim.

If you fail to pay the required fee after the court requests payment and sets a deadline, the court will discontinue the proceedings. The fee amount depends on the value of your claim and is calculated according to the Act on Court Fees:

• For claims up to CZK 20,000, the fee is CZK 1,000.
• For claims between CZK 20,000 and CZK 40,000,000, the fee is 5% of the claimed amount.
• For claims exceeding CZK 40,000,000, the fee is capped at CZK 2,000,000 (unless specific exceptions apply).

These fees are not insignificant for large disputes, and many Chinese companies are surprised to learn that they must pay this amount upfront, before the court even schedules a hearing.

microFAQ – Legal tips on filing claims in Czech courts

1. Can I file my claim in English, or must it be in Czech?
Your claim must be in Czech. If you submit a claim in English, the court will reject it or require correction. Even if you include an English translation of a Czech version, the original must be in Czech, and all supporting documents must have certified Czech translations (soudní překlad).

2. What happens if I cannot pay the court fee when I file?
If you do not pay the court fee when filing, the court will send a formal request for payment. If you do not pay within the deadline set by the court in this request, the court will discontinue your proceedings. Your claim will be dismissed.

3. Can I file my claim electronically?
Yes, you can file electronically using a certified electronic signature or through the Data Box system. For legal representatives (lawyers), Data Box usage is mandatory.

The Czech burden of proof and evidence architecture

A fundamental principle that distinguishes Czech litigation from Chinese court practice is that the burden of proof rests entirely on the parties, not the judge. The court will not investigate your case or interview witnesses on your behalf.

You must prove every relevant fact that you allege, and you must do this through evidence you submit to the court. Unlike litigation in the United States or other common law jurisdictions, Czech procedure provides no "discovery" mechanism. You cannot serve interrogatories on your opponent demanding that they produce documents.

You cannot depose opposing party executives or compel third-party witnesses to produce records before the trial. Instead, you must identify the evidence you possess before filing, organize it clearly, and present it to the court in your initial claim.

This requirement means that your claim document must be exceptionally thorough. You must identify not only the legal arguments supporting your position but also the specific evidence that proves each factual allegation. For a typical commercial dispute involving unpaid invoices, this means submitting copies of the underlying contract and proof that you performed your obligations.

Evidence is presented at court hearings, where the judge typically questions witnesses. This inquisitorial approach differs from the adversarial cross-examination common in common law systems. You will not be able to aggressively challenge your opponent's witnesses in the manner you might in an American courtroom.

The payment order procedure: a fast track alternative

For many Chinese companies facing unpaid invoices or breached payment obligations, the Czech payment order procedure (platební rozkaz) offers a dramatically faster alternative to traditional litigation.

If your claim involves a straightforward debt and the debtor has no plausible defense, you can apply for a payment order without filing a full lawsuit.

There are two main types of payment orders:

• Electronic Payment Order (EPR): This can be used for claims up to CZK 1,000,000. The court fee is lower (4% of the amount, minimum CZK 400).
• Standard Payment Order: Used for claims exceeding CZK 1,000,000 or filed physically. The fee is standard (5%).

The process works as follows: You file a formal application. The court reviews your application and supporting documents to determine whether your claim is clearly justified. If the judge finds your evidence compelling, the court issues a binding payment order without holding any hearing.

The order is then served on the debtor, who has exactly fifteen days from service to either pay the full amount (including court costs) or file a formal objection (odpor). If the debtor does nothing during those fifteen days, the payment order automatically becomes a final, enforceable judgment.

The strategic advantage is speed and cost efficiency. If successful, you obtain an enforceable judgment in weeks rather than months. However, the payment order procedure has significant limitations.

If your Czech debtor files an objection, the payment order is automatically cancelled, and the case converts to ordinary litigation governed by standard civil procedure. ARROWS Law Firm regularly advises Chinese clients on whether the payment order procedure is appropriate for their specific dispute.

microFAQ – Legal tips on the Czech payment order procedure

1. How quickly can I get a payment order issued?
For undisputed claims, a payment order can typically be issued within weeks from filing. This is significantly faster than traditional litigation. However, for an EPR to be successful, the documents must be served into the debtor's own hands (datová schránka or personal delivery); substituted service is not allowed for the issuance of an EPR.

2. What happens if my Czech debtor files an objection to the payment order?
If the debtor files an objection (odpor) within the 15-day deadline after service, the payment order is automatically cancelled (except for the ruling on costs in some cases), and the case becomes ordinary litigation. You then proceed to a standard court hearing.

3. Can I use the payment order procedure if my contract has a dispute about quality or performance?
No. If there is a legitimate disagreement about whether you actually performed your obligations, the debtor will likely file an objection, and the payment order procedure will be cancelled.

Service and notification: the "silent killer" of cross-border cases

After you file your claim and the court accepts it, the next critical phase is service of the claim on the defendant. This step is often where Chinese companies encounter unexpected problems.

Czech procedure has strict rules about how defendants must be properly notified; if service is defective, the entire judgment can become unenforceable. For Czech defendants domiciled in the Czech Republic, service is relatively straightforward, usually done via the Data Box. However, if your defendant is a Chinese parent company or a party located outside the Czech Republic, international service rules apply.

For serving judicial documents on parties located within the EU, Regulation (EU) 2020/1784 applies. However, for serving documents to China, the process is governed by the Hague Service Convention or the bilateral treaty between the Czech Republic and China. Service through the Hague Convention channel is notoriously slow and can take several months.

Many Chinese companies make the mistake of attempting informal service—sending documents by email or courier. This is legally worthless for the commencement of proceedings. ARROWS Law Firm manages cross-border service as a structured legal project, ensuring compliance with international treaties.

First instance litigation: hearings, evidence, and procedure

Once service is complete, the Czech court will schedule a preliminary hearing (přípravné jednání) or a first hearing, typically a few months after service. At the preliminary hearing, the judge attempts to narrow the issues in dispute and may encourage settlement.

Unlike Chinese litigation, there is no separate trial date set far in advance. Instead, Czech procedure typically involves multiple hearings spread over several months. The defendant files a defense (vyjádření k žalobě) typically within 30 days of receiving the claim. The entire first-instance process typically takes 6-12 months, depending on case complexity and court workload.

Throughout the proceedings, you must remain actively involved through your Czech lawyer.

If you ignore a court order or fail to appear at a hearing without legitimate excuse, the judge may rule against you by default (rozsudek pro zmeškání), treating your failure to respond as an admission that the other side's allegations are true.

Costs, fees, and cost recovery

Understanding the financial aspects of Czech litigation is essential for budgeting. Czech litigation involves two categories of costs: court fees (paid to the state) and legal representation costs. The allocation of these costs is governed by the "loser pays" principle.

Court fees are determined by the statutory formula mentioned earlier (generally 5% of the claim, capped at 2 million CZK). Unlike the United States, where parties typically bear their own costs, in the Czech Republic, if you win your case fully, the losing party is generally ordered to reimburse your court fees and your legal representation costs.

However, the reimbursement of legal costs is not based on what you actually paid your lawyer. Instead, it is calculated based on a statutory tariff. For high-value disputes, the tariff reimbursement may be lower than the actual hourly fees charged by top-tier law firms.

Furthermore, the "loser pays" rule has a critical exception: You can recover your legal costs only if you sent the required pre-litigation demand letter at least 7 days before filing. If you skip this step, the court generally will not award you replacement of costs, even if you win the case. For Chinese companies, this cost structure creates an important strategic consideration.

Appeal, extraordinary appeal, and finality

If the first-instance court rules against you, you have the right to appeal (odvolání) to the regional or high court. Appeals must be filed within fifteen days of receiving the written judgment. This deadline is strict.

The appeal court reviews both the facts and the law, though the introduction of new facts (novoty) is strictly limited in the appellate stage.

Appeals typically add another 6-12 months to the litigation timeline. After the appellate court issues its decision, the judgment is final and enforceable. In specific cases involving questions of law, a party can pursue an extraordinary appeal (dovolání) to the Supreme Court. Representation by a qualified attorney is mandatory for an extraordinary appeal.

Enforcement: converting a judgment into actual payment

Obtaining a favorable judgment is a major achievement, but it is not the end of the process. If your debtor refuses to pay, you must initiate enforcement proceedings (exekuce).

Czech enforcement is conducted by private bailiffs (soudní exekutoři) who have the power to locate and seize assets. This might include garnishing bank accounts, seizing real property, or selling movable assets. The bailiff's fee is statutorily regulated and is typically around 15% of the recovered amount, paid by the debtor. However, you may be required to advance a modest deposit to cover initial costs.

Before initiating enforcement, investigate your debtor's financial situation. If the debtor is judgment-proof—having no recoverable assets or having entered insolvency—pursuing enforcement may be futile. ARROWS Law Firm conducts pre-enforcement asset checks to help Chinese clients understand whether enforcement is likely to succeed.

Risks and Sanctions	How ARROWS Helps (office@arws.cz)
Judgment remains unsatisfied: Winning a judgment means nothing if you cannot enforce it against the defendant's assets.	Asset investigation: ARROWS Law Firm investigates debtor solvency and asset location before initiating enforcement, recommending whether enforcement is viable.
Bailiff costs exceed recovery: Advancing deposits when the debtor has no assets wastes money.	Cost-benefit analysis: ARROWS evaluates whether enforcement costs are justified relative to debtor assets.
Foreign assets cannot be reached: If your Czech debtor has moved assets to China or other jurisdictions, Czech bailiffs cannot seize them directly.	Cross-border enforcement: Through ARROWS International network, ARROWS coordinates enforcement across jurisdictions.
Debtor declares insolvency: Your debtor may file for insolvency (insolvenční řízení).	Insolvency monitoring: ARROWS monitors insolvency registers and files your claim as a creditor to protect your rights.

Alternative dispute resolution: arbitration and mediation

While Czech court litigation is a viable path, alternative dispute resolution (ADR)—particularly international arbitration—offers advantages. International Arbitration awards are enforceable in China under the New York Convention.

This is a massive strategic advantage if your opponent has assets in China. A Czech court judgment requires a complex recognition process in China, whereas an arbitral award is generally easier to enforce globally. Arbitration is also confidential, unlike public court trials.

Mediation involves a neutral third party facilitating negotiation. It is faster and cheaper than litigation and preserves business relationships. ARROWS Law Firm handles arbitrations, mediations, and court litigation, advising on the optimal mechanism for your specific circumstances.

Executive summary for management

Strategic jurisdiction: A Czech court judgment is automatically enforceable in the EU. For enforceability in China, international arbitration is often legally superior due to the New York Convention.

Procedural reality: Czech procedure has no discovery. You must possess and organize your evidence before filing. The burden of proof is strict.

Costs: Court fees are approx. 5% (capped at 2M CZK). "Loser pays" applies to cost recovery, but only if a pre-litigation call was sent 7 days before filing.

Enforcement: A judgment is only valuable if the debtor has assets. Pre-litigation asset checks are crucial.

Representation: Professional representation is essential due to language barriers, mandatory electronic communication (Data Boxes), and procedural strictness.

Conclusion of the article

Resolving legal disputes in the Czech Republic as a Chinese company requires strategic planning and professional legal representation. The Czech civil justice system operates on principles that differ from Chinese procedure. The burden of proof rests on you, and evidence must be ready before filing.

ARROWS Law Firm has represented Chinese companies in Czech courts for over a decade. We combine deep expertise in Czech procedure with an understanding of international business needs.

To discuss your dispute and understand your optimal path forward, write to us at office@arws.cz.

FAQ – Frequently asked legal questions

1. Can I sue a Czech company in Chinese courts instead of Czech courts?
Generally, no, unless there is a specific agreement or strong jurisdictional link. Even if you obtain a Chinese judgment, enforcing it in the Czech Republic requires a recognition procedure under the bilateral treaty, which is more complex than suing directly in the Czech Republic or using arbitration.

2. How long does Czech civil litigation typically take?
First-instance litigation typically takes 6-12 months. Appeals add 6-12 months.

3. What is the difference between Czech court litigation and international arbitration?
Czech litigation is public and judgments are automatically valid in the EU. Arbitration is private, often faster, and awards are easier to enforce globally (including in China) under the New York Convention.

4. Is legal representation mandatory?
It is not mandatory for first-instance proceedings (except for certain specific acts), but it is practically impossible to succeed without it due to language and procedural requirements. It is mandatory for extraordinary appeals to the Supreme Court.

5. What is a pre-litigation demand letter?
It is a mandatory formal letter sent at least 7 days before filing a lawsuit. Failure to send it usually results in the loss of your right to recover legal costs.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue. Although we strive for maximum accuracy in the content, legal regulations and their interpretation evolve over time. To verify the current wording of the regulations and their application to your specific situation, it is therefore necessary to contact ARROWS Law Firm directly (office@arws.cz). We accept no responsibility for any damage or complications arising from the independent use of the information in this article without our prior individual legal consultation and expert assessment. Each case requires a tailor-made solution, so please do not hesitate to contact us.