How can a New Zealand company litigate in the Czech Republic

Mgr. Vojtěch Sucharda
Mgr. Vojtěch Sucharda
17.4.2026 | ARROWS law firm

New Zealand companies seeking to pursue or defend legal claims in the Czech Republic face a complex landscape shaped by EU regulations and distinctive local procedural rules. This report examines jurisdictional frameworks, procedural requirements, and strategic considerations for New Zealand enterprises navigating Czech litigation, from pre-litigation assessment to judgment enforcement.

Introduction and key findings

New Zealand businesses operating across borders increasingly encounter commercial disputes with Czech partners, suppliers, customers, and service providers. While the Czech Republic maintains friendly diplomatic relations with New Zealand, the legal mechanisms for resolving disputes between these countries remain complex.

Unlike New Zealand's common law tradition based on judge-led adversarial proceedings, the Czech Republic operates within a continental civil law system. This system is characterized by inquisitorial procedures, strict formalism, and a "front-loaded" approach to evidence presentation.

The Czech Republic is a member of the European Union, which means that EU regulations on jurisdiction and enforcement apply to intra-EU disputes. However, for disputes involving New Zealand entities, the legal framework is supplemented by the Hague Convention on Choice of Court Agreements and the Czech Act on Private International Law.

Jurisdictional framework and court system structure

Understanding Czech court hierarchy and territorial jurisdiction

The Czech judicial system comprises four tiers of ordinary courts designed to handle civil and commercial disputes. At the base level, district courts ( okresní soudy ) serve as the courts of first instance for the vast majority of commercial and civil matters, including contract disputes and debt collection.

Above district courts sit regional courts ( krajské soudy ), which primarily hear appeals from district court decisions and exercise original jurisdiction over specialized matters. The High Courts ( vrchní soudy ) handle appeals from regional court decisions, while the Supreme Court exercises jurisdiction in extraordinary appeals limited to questions of law.

For New Zealand companies initiating proceedings against a Czech entity, territorial jurisdiction is generally governed by the Brussels I Recast Regulation when the defendant is domiciled in the Czech Republic. The fundamental rule establishes that a defendant domiciled in a member state must be sued in the courts of that member state.

This means that if a Czech company is the defendant and is registered or has its seat in the Czech Republic, Czech courts generally have jurisdiction. However, exceptions exist, such as jurisdiction based on the place of performance of contractual obligations or the place where the harmful event occurred.

The practical consequence is that a New Zealand company must carefully assess where the Czech defendant is domiciled and whether any contractual choice of court clause exists. ARROWS Law Firm regularly advises international clients on jurisdictional analysis and can quickly identify the correct court for any given dispute office@arws.cz.

Exclusive jurisdiction clauses and the Hague Convention

One of the most critical pre-litigation decisions for New Zealand companies is determining the effect of a choice of court clause ( prorogační doložka ). The legal landscape here is governed by the Hague Convention on Choice of Court Agreements, which is binding on both the European Union and New Zealand.

If a contract between a New Zealand company and a Czech party contains an exclusive choice of court agreement designating the courts of New Zealand, Czech courts are generally required to decline jurisdiction. This is a crucial protection for New Zealand companies, as it prevents the Czech counterparty from ignoring the contract and suing in the Czech Republic.

Conversely, if the contract designates a Czech court, that choice will be enforced under the Brussels I Recast Regulation. The Czech court will have jurisdiction regardless of the defendant's domicile.

However, if the choice of court agreement is non-exclusive or if there is no choice of court agreement, the general rules of the Brussels I Recast Regulation apply. In such cases, a Czech company domiciled in the Czech Republic must typically be sued in Czech courts.

For New Zealand companies entering into agreements with Czech entities, clarity is paramount. If you wish to litigate in New Zealand, the contract must explicitly state that the jurisdiction of New Zealand courts is exclusive.

Mixing choice of law (e.g., New Zealand law) with a foreign forum (Czech court) can increase litigation costs due to the need for expert legal opinions on foreign law. Therefore, aligning the forum and the governing law is often more efficient.

Reciprocity and enforcement of judgments

A complex issue arises when a New Zealand company holds a judgment from a New Zealand court and seeks to enforce it in the Czech Republic.

If the judgment was rendered by a New Zealand court designated in an exclusive choice of court agreement, the judgment should be recognized and enforced in the Czech Republic under the Hague Convention. This provides a streamlined path for enforcement.

For judgments not covered by the Hague Convention, recognition is governed by the Czech Act on Private International Law. Under Section 15 of this Act, recognition is conditioned on reciprocity.

The Czech courts will examine whether New Zealand courts would recognize and enforce a Czech judgment on equivalent terms. While New Zealand law generally allows for the enforcement of foreign judgments, the burden falls on the judgment creditor to demonstrate this reciprocity.

The absence of a specific bilateral treaty means that outside the scope of the Hague Convention, enforcement is not automatic. ARROWS Law Firm advises international clients on structuring their dispute resolution clauses to maximize enforceability office@arws.cz.

Procedural framework and pre-litigation strategy

The critical importance of pre-litigation analysis and asset investigation

Before filing any claim in Czech courts, New Zealand companies must conduct a thorough preliminary assessment. This assessment must address whether the Czech court has jurisdiction and if the claim is viable under Czech substantive law.

Asset investigation is particularly crucial, as a judgment is only as valuable as the creditor's capacity to enforce it. New Zealand companies should conduct searches of the Czech Commercial Register ( Obchodní rejstřík ), the Register of Beneficial Owners ( Evidence skutečných majitelů ), and the Cadastre of Real Estate ( Katastr nemovitostí ).

If the defendant is a Czech limited liability company (s.r.o.) or joint-stock company (a.s.), the Commercial Register reveals registered capital and financial statements. ARROWS Law Firm can coordinate with local search services to provide comprehensive due diligence before claims are filed office@arws.cz.

The "front-loaded" burden of proof and evidence architecture

Czech civil procedure relies on the principle of "concentration of proceedings" ( koncentrace řízení ). Unlike the broad discovery phase in New Zealand, Czech evidence must be "front-loaded."

Parties are generally required to present all decisive facts and evidence by the end of the first oral hearing. Evidence submitted later is typically rejected unless the party proves they could not have presented it earlier through no fault of their own.

Furthermore, all court proceedings are conducted in Czech. Any document submitted as evidence (contracts, emails, invoices) must be accompanied by an officially certified translation ( soudní překlad ) prepared by a court-appointed translator.

Simple translations are insufficient for formal evidence, and the cost of translation must be borne by the plaintiff initially. A contract drafted in English is valid, but it requires a certified translation to be admissible as evidence in court.

ARROWS Law Firm specializes in preparing document packages and coordinating certified translations to ensure evidence meets strict Czech procedural standards office@arws.cz.

Risks and penalties

How ARROWS (office@arws.cz) helps

Evidence rejected for lack of certification: Foreign-language documents submitted without official translation are inadmissible.

Certified translation coordination: ARROWS arranges for court-certified translations of all key documents before filing deadlines.

Late evidence excluded: Evidence submitted after the first hearing is rejected due to "concentration of proceedings."

Front-loaded evidence preparation: ARROWS ensures all evidence is organized and submitted within the statutory timeframes.

Jurisdictional dismissal: Filing in the wrong court causes months of delay.

Jurisdictional analysis: ARROWS verifies jurisdiction under Brussels I Recast and the Hague Convention prior to filing.

Procedural defects: Claims failing to meet formalities are returned for correction, risking statute of limitation issues.

Expert claim drafting: ARROWS prepares claims strictly complying with the Code of Civil Procedure.

Filing a claim and initiating Czech civil proceedings

Formal requirements and the statement of claim

Filing a civil claim requires compliance with the Code of Civil Procedure ( Občanský soudní řád ). The statement of claim ( žaloba ) must identify the court, the parties, the facts, the evidence, the legal grounds, and the precise relief sought.

Vague claims are often rejected or returned for correction ( výzva k doplnění ), which delays proceedings. Court fees must be paid upon filing.

The standard fee for commercial disputes is 5% of the amount claimed, typically capped at CZK 2,000,000 for monetary claims. Failure to pay the fee within the court-imposed deadline results in the termination of proceedings.

The Data Box trap

The Data Box ( datová schránka ) is a mandatory electronic communication tool for all Czech legal entities and attorneys. While a New Zealand company itself is not automatically assigned a Data Box, its Czech attorney will communicate with the court exclusively through this system.

If a New Zealand company establishes a Czech subsidiary, that subsidiary will automatically get a Data Box. All official mail (summons, judgments) will go there electronically.

If the box is not monitored, judgments by default ( rozsudek pro zmeškání ) can be issued without the company realizing it. It is vital to ensure that any Czech entity under your control has active Data Box monitoring.

The course of proceedings

After filing and fee payment, the court issues a summons. If the defendant contests the claim, an initial hearing is scheduled.

The judge leads the proceedings, questions witnesses, and appoints experts if technical issues arise. First-instance proceedings in commercial matters typically take 12 to 24 months, though complex cases can take longer.

1. How long does it take? Standard commercial disputes take 12-24 months for a first-instance decision. Appeals extend this timeline.

2. Is there discovery? No. There is no broad discovery. You must possess the evidence to prove your claim before you sue.

3. What if I miss a deadline? Czech procedure is strict. Missing a deadline usually means losing the right to perform that act (e.g., submit evidence, appeal).

Strategic considerations: Litigation vs. arbitration

Comparative analysis

For New Zealand companies, the choice between state court litigation and international arbitration is pivotal. Litigation offers predictable costs and the ability to join third parties.

However, litigation is public, slower, and subject to strict formalism and language barriers. International arbitration offers worldwide enforceability, confidentiality, and flexibility, though often at higher upfront costs.

If the contract contains a valid arbitration clause, Czech courts will decline jurisdiction. Arbitration is often recommended for high-value cross-border contracts to ensure neutrality and enforceability in New Zealand without proving reciprocity.

While representation by an attorney is not strictly mandatory for proceedings before district courts, it is practically impossible for a New Zealand company to litigate without one. Representation is mandatory for extraordinary appeals to the Supreme Court.

Legal costs include contractual fees and statutory costs. The losing party generally reimburses the winner's costs, but this reimbursement is calculated based on a statutory tariff.

This tariff is often lower than the actual contractual fees paid. Thus, a "winning" party usually bears some unrecoverable legal costs.

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Judgment and enforcement

Obtaining and enforcing a Czech judgment

A final judgment ( pravomocný rozsudek ) from a Czech court is directly enforceable. The creditor can apply to a court bailiff ( soudní exekutor ).

Bailiffs in the Czech Republic are private professionals with state authority to seize bank accounts, wages, and property. The bailiff system is robust, allowing access to databases to locate assets and block accounts immediately upon commencement of enforcement.

Enforcing in New Zealand

If the debtor has assets in New Zealand, a Czech judgment must be recognized there. If the judgment falls under the Hague Convention, enforcement in NZ is streamlined.

For other cases, the creditor must sue on the judgment under common law, proving the Czech court had jurisdiction. This requires demonstrating that the judgment is final and not contrary to public policy.

The Czech contractual penalty (smluvní pokuta)

Unlike New Zealand law, where penalty clauses are often unenforceable, Czech law fully enforces contractual penalties ( smluvní pokuta ). A penalty can be agreed for breach of any duty and acts as a flat sanction regardless of actual damage.

A New Zealand company might sign a contract with a high penalty thinking it unenforceable, but in the Czech Republic, this debt will accrue rapidly. Courts can moderate "unreasonably high" penalties, but litigation is required to achieve this.

Good faith and pre-contractual liability

Czech law recognizes culpa in contrahendo . Parties must negotiate in good faith. Terminating advanced negotiations without a "just cause" can lead to liability for the other party's reliance damages.

This concept represents a departure from the common law "freedom of contract" that typically applies until the signature.

Summary of costs

Court fees are typically 5% of the claim value. Legal fees are usually based on hourly rates or fixed fees, while translation costs can be significant for document-heavy cases.

Cost recovery is based on a statutory tariff and rarely covers 100% of actual spend.

Summary of timeline

First-instance proceedings at the District Court typically take 12 to 24 months. Appeals to the Regional or High Court can add another 6 to 12 months.

Enforcement timelines vary significantly depending on asset liquidity, ranging from weeks to years.

Conclusion

Litigation by a New Zealand company in the Czech Republic is achievable but requires navigation of a distinct civil law system. The Hague Convention has improved legal certainty for exclusive jurisdiction agreements, while EU regulations govern general jurisdiction.

Success depends on "front-loading" evidence, ensuring strict procedural compliance, and conducting early asset tracing.

ARROWS Law Firm specializes in representing international clients in Czech commercial disputes. We assist with jurisdictional analysis, evidence preparation, and strategic enforcement. For a consultation on your specific case, please contact office@arws.cz.

FAQ - Judgments and Procedures

1. Does a New Zealand company need a Czech branch to litigate? No. You can sue as a foreign entity. You will need a Czech attorney for effective representation.

2. Can I enforce a Czech judgment in New Zealand? Yes. It is easiest if you had an exclusive choice of court clause (Hague Convention). Otherwise, you must proceed under common law rules for foreign judgments.

3. Are contractual penalties enforceable? Yes. Unlike in NZ, smluvní pokuta is fully enforceable in the Czech Republic, even if it exceeds actual damages.

4. What if the contract says "New Zealand Courts" exclusively? Since both New Zealand and the EU are parties to the Hague Convention, Czech courts generally must respect this exclusion and decline jurisdiction.

5. How much does it cost? Prepare for a 5% court fee and hourly legal rates. Recovery from the losing party is partial (tariff-based).

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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