How to Enforce Debt Claims in the Czech Republic as an Icelandic Business: Practical Legal Steps

Mgr. Vojtěch Sucharda
Mgr. Vojtěch Sucharda
12.3.2026 | ARROWS law firm

As an Icelandic business with outstanding invoices from Czech customers, you face a unique challenge: enforcing your debt across borders requires understanding two distinct legal systems. This article provides specific, practical steps to recover money owed to you in the Czech Republic, explaining enforcement methods, timelines, and hidden risks. Understanding these procedures will help you make informed decisions about protecting your business interests.

Photo shows an attorney consulting about cross-border debt recovery.

Understanding the Czech debt enforcement framework

Czech debt enforcement, known as exekuce , is a formal legal process that begins only after you have obtained what the Czech legal system calls an enforceable title ( exekuční titul ). This distinction is fundamental and often misunderstood by foreign creditors. An enforceable title is not simply a contract or an unpaid invoice; it is a formal legal document issued by a court or other authorized body that confirms your right to payment.

Without this title, no bailiff (executor) in the Czech Republic can take action against your debtor's assets, regardless of how clear-cut your claim may be.

The types of documents that qualify as enforceable titles in the Czech Republic include final court judgments, uncontested payment orders ( platební rozkaz ), electronic payment orders ( elektronický platební rozkaz ), and arbitration awards. If you arrive in the Czech Republic with only a contract and an email showing non-payment, you will first need to obtain one of these formal titles before enforcement can begin.

The procedural requirement for an enforceable title is non-negotiable, and attempting to skip this step will waste time and resources. For Icelandic businesses, understanding this framework is particularly important because Iceland has specific recognition agreements with the Czech Republic via the Lugano Convention. ARROWS Law Firm regularly assists foreign creditors from Nordic and EFTA countries with this specific cross-border validation process.

Key players in the enforcement process

Czech enforcement involves several distinct actors, each with specific roles and limitations. The first key player is the enforcement court ( exekuční soud ), typically a district court. While the court oversees the legality of the process, it delegates the actual recovery work to the executor.

The second crucial player is the judicial executor ( soudní exekutor ), who is a licensed private bailiff appointed by the state but selected by the creditor.

Unlike court officers in some jurisdictions, Czech executors are private professionals with significant independent authority vested by the state. The executor determines which of the debtor's assets will be targeted for seizure, issues enforcement orders ( exekuční příkaz ), and manages the asset sale process. Importantly, the executor's authority is extensive: they can freeze bank accounts, garnish wages, and place liens on real estate.

The third party is the debtor ( povinný ), who has certain rights even during enforcement. The debtor can file motions to stop enforcement if the debt has been paid or if the title is invalid. For Icelandic businesses initiating enforcement, it is crucial to recognize that the executor system is creditor-driven.

ARROWS Law Firm's lawyers work with this system daily and can guide you in selecting an efficient executor.

Pre-enforcement requirements: Building your case

Before any enforcement can begin, you must have a document that the Czech courts recognize as an enforceable title. If you already have a final judgment from an Icelandic court, you are in a strong position, though you must navigate the Lugano Convention procedures. If you do not have an Icelandic judgment, you will need to obtain a Czech enforceable title.

The most straightforward path for undisputed monetary claims is the Payment Order procedure ( platební rozkaz ) or the Electronic Payment Order ( elektronický platební rozkaz ).

This is a fast-track process available under the Czech Civil Procedure Code that allows a court to issue a binding payment order without holding a formal hearing. To use this procedure, your claim must meet two conditions: first, the amount must be a specific sum of money; and second, the claim must be undisputed or at least appear well-founded based on the documents you submit.

To file for a payment order, you must submit a formal application ( žaloba ) to the competent district court. Your application must include the debtor's correct legal name and ID number ( IČO ), a clear description of the claim, the amount owed, and documentary evidence supporting your claim.

Here is where many Icelandic creditors encounter their first surprise: Czech courts apply a strict evidentiary standard at this initial stage.

A Czech judge must be convinced from the outset that your claim is justified based solely on the documents provided. If your evidence is unclear, incomplete, or poorly organized, the judge will not issue the payment order and will instead schedule a standard court hearing. This takes considerably longer and requires higher legal fees.

The solicitors at ARROWS Law Firm have extensive experience preparing payment order applications that survive this scrutiny.

If the court is satisfied with your application, it will issue a payment order. This order is then served on the debtor into their own hands ( do vlastních rukou ). The debtor has 15 days from delivery to either pay the full amount or file an objection (called an odpor ).

If the debtor files an objection—even without stating any grounds—the payment order is automatically cancelled in its entirety, and the case is transferred to ordinary court proceedings. This automatic transfer means the simple, fast process is over, and you now face a contested lawsuit.

The different routes to enforcement

Understanding your options before you begin is essential because each route has different timelines, costs, and risks. Let us explain the main pathways available to you.

The Electronic Payment Order is the modern, preferred domestic option for businesses, allowing for a lower court fee of 4% of the claimed amount.

However, it requires a recognized electronic signature or filing via the Czech Data Box system ( Datová schránka ), which essentially necessitates a Czech legal representative for Icelandic entities. The timeline is typically weeks to months. The Standard Payment Order is the paper-based alternative, identical in legal effect but carrying a slightly higher court fee.

Ordinary Civil Proceedings are necessary if your claim is disputed from the start, or if the debtor objects to a payment order.

In this scenario, you must file a formal lawsuit ( žaloba ), and the case will proceed through full court proceedings including evidence examination, hearings, and potential appeals. The timeline for obtaining a final judgment is typically one to three years.

Enforcement of an Icelandic Judgment is available if you already have a final judgment from an Icelandic court. Since Iceland is not an EU member, the European Payment Order (EPO) regulation does not automatically apply. Instead, you rely on the Lugano Convention.

As an Icelandic entity, you generally cannot use the EPO procedure against a Czech debtor unless you are operating through a branch established in another EU Member State.

The payment order procedure (Platební rozkaz)

Most Icelandic businesses pursuing debts in the Czech Republic begin with the payment order procedure because it offers the best combination of speed and cost efficiency. The procedure avoids the need for a hearing, which means lower legal costs.

If the debtor does not object within the 15-day deadline, the payment order has the same legal force as a final judgment ( pravomocný rozsudek ) and is immediately enforceable.

The process involves several specific steps. First, organize the original contract, purchase orders, invoices, proof of delivery, and the mandatory pre-action call for payment. Second, prepare the application according to strict procedural requirements under the Civil Procedure Code.

Third, submit the application to the court, typically electronically to secure the lower court fee. Fourth, the judge reviews the file; if the claim is clear, the Payment Order is issued. Fifth, the order must be successfully served to the debtor.

If the debtor cannot be found at their registered address or does not pick up the mail, the Payment Order cannot become effective and is cancelled.

Finally, the debtor has a 15-day objection period. If no objection is filed, you receive a clause of legal force ( doložka právní moci ), and you can immediately instruct an executor.

The Czech executor system (Exekuce)

The executor system in the Czech Republic is unique: executors are licensed private professionals who act as public officials. Unlike court-appointed bailiffs in some jurisdictions who are mere employees, Czech executors operate businesses and compete for cases. This competition often drives efficiency.

The first action is usually a Notice of Commencement of Enforcement combined with a Call for Voluntary Payment, giving the debtor 30 days to pay with reduced costs.

If the debtor does not pay, the executor proceeds to various enforcement methods. These include blocking bank accounts, wage garnishment, seizing movable property, or placing liens on real estate. The executor determines the most effective method, although you can provide tips on known assets.

Executor fees are set by the Executor Tariff ( Exekutorský tarif ). The standard reward is 15% of the recovered amount plus flat-rate reimbursement for expenses. Importantly, these costs are primarily charged to the debtor, but if the debtor is insolvent, the creditor may bear the base costs.

1. Can I choose any executor in the Czech Republic?
Yes. Unlike some countries with strict territorial limits, you can generally select any licensed executor in the country to handle your case, regardless of where the debtor is located. ARROWS Law Firm works with proven executors who act quickly.

2. What happens if the debtor has no assets?
The executor will conduct a property search (registers, banks, insurance). If nothing is found, the enforcement is stopped ( zastavení exekuce ). You may be liable for the executor's minimum out-of-pocket costs, though these are usually capped at a few thousand CZK.

3. Is VAT involved?
Yes. If the executor is a VAT payer (most are), 21% VAT is added to their fees.

Foreign judgment enforcement (Lugano Convention)

If you have an Icelandic judgment, you rely on the Lugano Convention 2007. This treaty facilitates the enforcement of judgments between EFTA states (Iceland, Norway, Switzerland) and EU states. Unlike the "Brussels Recast" Regulation, the Lugano Convention still requires a declaration of enforceability.

The process involves obtaining a certificate from the Icelandic court and filing a motion for a declaration of enforceability with the Czech District Court. Once the declaration is issued and served, the judgment becomes enforceable in the Czech Republic, and you can file for executor enforcement.

The Czech court cannot review the substance of the Icelandic judgment (no révision au fond ); it checks only formal requirements and public policy compatibility.

International considerations for Icelandic creditors

As an Icelandic creditor, you must account for currency and language differences. Czech courts award judgments in the currency of the contract, but enforcement is often practically carried out in CZK. Furthermore, all filings must be in Czech, meaning your documents must be translated by a certified interpreter.

A Czech law firm provides essential services such as pre-vetting the Insolvency Register ( Insolvenční rejstřík ) to ensure the debtor isn't already bankrupt.

Representation is practically impossible to navigate without a Czech lawyer due to the electronic filing systems ( Datová schránka ) and procedural nuances. Legal fees are often recoverable from the debtor based on a statutory tariff.

For immediate assistance, contact office@arws.cz.

Timeline and cost expectations

For an uncontested Payment Order, the timeline is typically 2 to 5 months to obtain an enforceable title. Ordinary proceedings for disputed claims take significantly longer, often 1.5 to 3 years including potential appeals.

The executor process varies wildly based on asset liquidity; bank seizures can happen within days, while property sales take months.

Costs include court fees (4-5% of the claim) and legal fees. If successful, the debtor reimburses most of these costs. Statutory default interest is currently set at the CNB Repo Rate plus 8% per annum.

Risks and Sanctions

How ARROWS (office@arws.cz) helps

Section 142a Sanction: Failure to send a pre-action "Call for Payment" 7 days prior results in denial of legal cost reimbursement even if you win.

Compliance: ARROWS ensures the Předžalobní výzva meets all statutory criteria under § 142a OSŘ.

Objection Trap: A blank objection cancels your Payment Order instantly.

Strategy: We assess whether to file a Payment Order or go straight to a lawsuit to save time in complex cases.

Improper Service: Enforcement fails if documents aren't strictly served "to own hands".

Verification: We monitor the Data Box and postal delivery status to prevent procedural dead ends.

Insolvency: Suing a bankrupt company is useless.

Vetting: We check the ISIR (Insolvency Register) before you spend a single króna.

Common mistakes and how to avoid them

Under Section 142a of the Czech Civil Procedure Code, a creditor must send a pre-litigation call for payment to the debtor's address at least 7 days before filing a lawsuit. Failure to do so does not invalidate the lawsuit, but it generally prevents the court from awarding you reimbursement of legal costs.

In a system where "loser pays," losing your right to cost compensation is a significant financial penalty.

Czech judges act as gatekeepers regarding evidence. For a Payment Order, you need a written contract or clear email trail, proof of performance such as signed delivery notes, and correctly issued invoices. An acknowledgment of debt from the debtor is also a powerful piece of evidence.

Executive summary for management

  • Enforcement is a two-stage process: First, get a title (Court Judgment or Payment Order). Second, hire a private executor.
  • Icelandic status: You generally cannot use the EU European Payment Order. Use the domestic Czech Payment Order or enforce your Icelandic judgment via the Lugano Convention.
  • Strict Formalism: Miss the pre-action letter deadline? You lose cost recovery. Mess up the evidence? Payment Order rejected.
  • Costs: Expect to advance 4-5% in court fees + legal costs. Most is recoverable from the debtor if they have assets.
  • Time: 3-6 months for clean cases; 1+ years for disputes.

Conclusion

Enforcing a debt claim in the Czech Republic as an Icelandic business is achievable, but it requires precision. The Czech system favors creditors who follow the rules strictly—particularly regarding the Pre-Action Call and the Electronic Payment Order filing.

The lawyers at ARROWS Law Firm handle enforcement matters for Nordic creditors daily and bring practical experience navigating Czech courts and executors.

If you have an unpaid invoice from a Czech customer, contact ARROWS Law Firm at office@arws.cz.

1. My Czech customer has not paid an invoice. Can I send the executor immediately?
No. You must first obtain a court decision (Enforceable Title). Only then can the executor act.

2. Does the "European Payment Order" apply to Iceland?
Generally, no. Since Iceland is not an EU member state, the Regulation does not apply to direct relations unless specific criteria are met. You should use the Czech Electronic Payment Order or the Lugano Convention for existing Icelandic judgments.

3. What is the deadline for the pre-action letter?
You must send it at least 7 days before filing the lawsuit to be eligible for cost reimbursement.

4. How much interest can I claim?
Unless your contract states otherwise, you can claim the statutory rate: CNB Repo Rate + 8% p.a.

5. Who pays the costs?
You pay upfront (court fees, legal retainer). If enforcement is successful, the debtor reimburses these costs to you. If the debtor is insolvent, you bear your own legal costs and potentially the executor's minimum expenses.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (office@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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