How Swiss businesses can enforce their rights before Czech courts

Are you a Swiss business facing a commercial dispute with a Czech partner? Enforcing a judgment from a Swiss court in the Czech Republic may seem complex, but a streamlined international framework makes it a clear and manageable process. This guide provides the specific answers and step-by-step procedures you need, written by an English-speaking lawyer in Prague, European Union, to help you secure your financial interests and enforce your rights effectively.

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 Legal Bridge Between Switzerland and the Czech Republic: The Lugano Convention

When a commercial relationship with a Czech partner breaks down, your first concern may be whether a judgment from your local Swiss court holds any power abroad. Fortunately, a robust international treaty creates a direct legal bridge between the two countries, removing much of the uncertainty you might expect from cross-border litigation. This treaty is the Lugano Convention (2007).

The Lugano Convention is the primary agreement governing jurisdiction and the recognition and enforcement of judgments between European Union member states, including the Czech Republic, and countries in the European Free Trade Association (EFTA), including Switzerland. 

For your business, this is a profound strategic advantage. It means that a final judgment from a competent Swiss court is not treated as a completely "foreign" ruling that needs to be re-litigated from scratch. Instead, it is subject to a simplified and predictable recognition process.

This framework applies to most "civil and commercial matters," covering the vast majority of business disputes such as breach of contract, unpaid invoices, and claims for damages. It transforms what could be a daunting international legal battle into a structured, quasi-domestic procedure. 

By understanding this "Lugano Advantage," you can approach enforcement not with uncertainty, but with a clear roadmap. The convention does exclude certain specific areas, such as bankruptcy or arbitration, which are governed by different international rules.

What Do You Need to Start? Your Document Checklist

To begin the enforcement process in the Czech Republic, you must first gather a precise set of documents. The Czech courts require strict adherence to formal requirements, and any error or omission can lead to costly delays. Preparing this documentation correctly is the critical first step toward recovering what you are owed.

Here is your essential checklist:

• A Complete and Certified Copy of the Swiss Judgment: You must provide either the original judgment or an officially certified copy issued by the Swiss court. This document serves as the primary proof of the court's decision and must be fully authenticated.
• The Certificate of Enforceability (Annex V): This is arguably the most important document. It is a standardized form, known as the Annex V certificate, issued by the original Swiss court that rendered the judgment. This certificate officially confirms that the judgment is final and enforceable in Switzerland, acting as its "passport" into the EU's legal space under the Lugano Convention.
• Certified Czech Translation: All documents submitted to a Czech court must be accompanied by an official translation into the Czech language. This translation must be performed by a translator who is officially certified by the Czech authorities. An unofficial or inaccurate translation will lead to the rejection of your application.
• Proof of Service (for Default Judgments): If the Swiss judgment was issued because the defendant failed to appear (a default judgment), you must provide official documents proving that the defendant was properly served with the initial claim and was given sufficient opportunity to mount a defence. This is a key requirement to ensure the defendant's right to a fair trial was respected.

Gathering and certifying these documents can be a complex task, especially from abroad. For immediate assistance in ensuring your documentation is complete and correctly prepared for the Czech courts, write to us at office@arws.cz.

The Enforcement Process in the Czech Republic: A Step-by-Step Guide

Once your documents are in order, the process of making your Swiss judgment legally effective in the Czech Republic begins. This procedure is divided into two main phases: first, having the judgment formally recognized, and second, using coercive measures to collect the debt.

Step 1: Declaration of Enforceability (Exequatur)

The first step is to file an application with the competent Czech court to have your Swiss judgment officially recognized and declared enforceable. This formal recognition procedure is sometimes referred to by the legal term exequatur.

Crucially, under the Lugano Convention, the Czech court's role is not to re-examine the facts or merits of your original case. The judge will not hear evidence again or second-guess the Swiss court's legal reasoning. The review is limited to ensuring procedural correctness and checking for a few specific grounds for refusal, such as a violation of public policy or conflicting judgments.

Step 2: The Judgment Becomes an Enforcement Title (Exekuční Titul)

Upon successful review, the Czech court will issue a declaration of enforceability. At this moment, your Swiss judgment acquires the same legal force and authority as a judgment issued by a Czech court. It becomes what is known in Czech law as an exekuční titul—an enforcement title. This title is the legal key that unlocks the power of the state to compel the debtor to pay.

Step 3: Initiating Judicial Enforcement (Exekuce)

With a valid enforcement title in hand, you can then file a motion with the court to initiate enforcement proceedings, known as exekuce. The court will appoint a judicial bailiff (soudní exekutor), who is an independent officer authorized by the court to carry out the enforcement. The bailiff acts on your behalf to locate and seize the debtor's assets to satisfy the judgment.

Step 4: Methods of Coercive Enforcement

The Czech judicial bailiff has a range of powerful tools to enforce the judgment. These actions are taken without the debtor's consent and are designed to be swift and effective. The bailiff can use several methods simultaneously to maximize the chances of recovery.

Common methods include:

• Freezing and Seizing Bank Accounts: The bailiff can immediately block all funds in the debtor's known bank accounts and seize them to cover the debt.
• Deductions from Receivables: The bailiff can order the debtor's own clients or customers to redirect payments owed to the debtor directly to the bailiff instead.
• Seizure and Sale of Movable Property: Company assets such as vehicles, machinery, office equipment, and inventory can be seized and sold at a public auction.
• Liens on Real Estate: A legal charge can be placed on any real estate owned by the debtor. If the debt remains unpaid, this can ultimately lead to a forced sale of the property.

FAQ – Legal tips about the Czech enforcement process

• How long does enforcement typically take in the Czech Republic?
  If the debtor does not oppose the action, the process to register and enforce a judgment under the Lugano Convention takes approximately 6 months. If the debtor challenges the enforcement, it can take 1 to 2 years to resolve. Need to expedite your case? Contact us at office@arws.cz.
• Can the Czech court re-examine the merits of my Swiss case?
  No. The Lugano Convention explicitly prevents the court of enforcement from reviewing the substance of the original judgment. The review is purely procedural. Our lawyers can help you navigate the procedural review. Email us at office@arws.cz.
• What are the estimated costs involved?
  Costs typically include court fees (usually 5% of the claimed amount), certified translation costs, and legal fees. If a bailiff is used for enforcement, their remuneration can be up to 15% of the amount recovered, often paid by the debtor. Get a clear cost estimate for your case by writing to office@arws.cz.

Key Risks in Cross-Border Enforcement and How to Mitigate Them

While the Lugano Convention provides a clear path, cross-border enforcement is not without risks. A debtor who is unwilling to pay may exploit procedural complexities or take evasive action to frustrate your efforts. Understanding these risks is the first step to mitigating them effectively.

A particularly dangerous period for a creditor is the time gap between the debtor being notified of the recognition proceedings and the moment a bailiff is legally authorized to seize assets. A bad-faith debtor can use this window to move funds, transfer ownership of property, or take other steps to make themselves "judgment-proof." This makes swift, strategic legal action essential.

The following tables outline the most common risks and show how ARROWS, a leading Czech law firm in Prague, EU, can help you overcome them.

Procedural and Documentation Errors

Risks and penalties	How ARROWS helps
Delays or outright rejection of your application due to incomplete documentation or improperly certified translations. Penalty: Wasted time, increased legal costs, and the risk of the debtor dissipating assets while you restart the process.	Drafting documentation to prevent fines and penalties. We ensure your application is flawless from the start. Get expert help at office@arws.cz.
Filing with the incorrect Czech court (lack of territorial or subject-matter jurisdiction). Penalty: Dismissal of the application, forcing you to begin again, causing significant delays and additional expense.	Representation before public authorities. We navigate the complexities of the Czech court system for you. Contact us at office@arws.cz.
The debtor successfully challenges enforcement on procedural grounds (e.g., arguing they were not properly served notice in the original Swiss proceedings). Penalty: Complex and costly secondary litigation in the Czech Republic, stalling your recovery.	Legal analysis and court representation. Need to defend against a challenge? Our litigation experts are ready to assist you – email us at office@arws.cz.

Debtor's Evasive Actions

Risks and penalties	How ARROWS helps
The debtor, alerted during the recognition phase, attempts to hide, transfer, or liquidate assets before enforcement can begin. Penalty: A legally valid judgment with nothing to enforce against, resulting in a total financial loss.	Legal consultations to apply for interim measures to freeze assets before the debtor can act. We act quickly to secure your claim. For immediate assistance, write to us at office@arws.cz.
The debtor's company declares insolvency or initiates restructuring to frustrate the enforcement of your individual claim. Penalty: Your claim becomes part of a complex bankruptcy proceeding with potentially low and delayed recovery prospects.	Representation in court during insolvency proceedings. Our experts can protect your creditor rights in bankruptcy. Get tailored legal solutions by writing to office@arws.cz.
The debtor is part of a complex corporate structure, making it difficult to identify assets held by parent or sister companies. Penalty: The bailiff is unable to locate seizable assets, rendering the enforcement ineffective.	Legal opinions and asset tracing support. We help uncover hidden assets. Do not hesitate to contact our firm – office@arws.cz.

What If You Don't Have a Swiss Judgment Yet?

If you are at an earlier stage of a dispute and have not yet obtained a court judgment, you have the option to initiate legal action directly in the Czech Republic. This can often be a more efficient and direct route, especially if the debtor's assets and business operations are located here. However, succeeding in a Czech court requires a deep understanding of local commercial law, where the assumptions of your home jurisdiction may not apply.

The most severe commercial disputes often arise from a fundamental "cultural-legal mismatch." Foreign companies naturally operate based on their own legal norms and business practices, but these can be directly at odds with mandatory—and sometimes surprising—provisions of Czech law.

Initiating a Lawsuit (Žaloba) in the Czech Republic

A Swiss company can file a lawsuit, known in Czech as a žaloba (statement of claim), directly with a Czech court. The rules for determining which court has jurisdiction are set out in both the Lugano Convention and the Czech Act on Private International Law (No. 91/2012 Coll.). Filing a žaloba requires careful preparation to meet all procedural requirements of the Czech Civil Procedure Code.

Common Pitfalls in Czech Commercial Contracts

Many disputes can be prevented with properly drafted contracts that account for the unique features of Czech law. Two areas are particularly hazardous for foreign businesses:

• The Smluvní Pokuta (Contractual Penalty): This is a uniquely powerful and flexible tool in Czech contract law. Unlike in Switzerland or many other countries where penalties are often limited to non-monetary breaches and must reflect actual damages, the Czech smluvní pokuta can be applied to any breach, including late payment. Crucially, the creditor does not need to prove they suffered any financial loss to claim the full penalty. A poorly understood clause can expose your business to disproportionately high financial penalties.

• Formal Validity Requirements: Czech law imposes strict written form requirements for certain types of contracts to be legally valid. For instance, an agency agreement is considered void from the outset if it is not in writing. Relying on verbal agreements or a series of emails, which might be common practice elsewhere, can leave you with no enforceable rights in the Czech Republic.

Why Choose ARROWS for Your Swiss-Czech Dispute?

Navigating a cross-border dispute requires more than just legal knowledge; it demands a partner with proven international experience, local expertise, and a commercial mindset. ARROWS is uniquely positioned to protect the interests of Swiss businesses in the Czech Republic.

Our lawyers have deep expertise in applying the Lugano Convention and regularly represent foreign clients in Czech courts and before public authorities. We understand the legal and cultural differences that can impact your case and provide clear, actionable advice in English.

Through the ARROWS International network, built over more than 10 years, we offer seamless legal support in over 90 countries worldwide. This global reach, combined with our powerful local presence as a law firm based in Prague, European Union, ensures we can handle even the most complex cross-border matters. 

Our track record includes supporting over 150 joint-stock companies and 250 limited liability companies, giving us unparalleled insight into the challenges businesses face. We are more than just lawyers; we are business partners. We welcome innovative business ideas and can even connect clients with each other to foster mutual investment interests.

Your Next Step to Enforcing Your Rights in the Czech Republic

Enforcing a Swiss judgment in the Czech Republic is a clear and established process. However, navigating it efficiently, avoiding procedural pitfalls, and countering a debtor's evasive tactics requires expert local guidance. Taking prompt and correct action is critical to protecting your financial interests.

Protect your assets and resolve your dispute effectively. Our team of English-speaking lawyers at our international law firm operating from Prague, European Union is ready to provide a confidential consultation on your case. Do not hesitate to contact our firm at office@arws.cz.

FAQ – Most common legal questions about enforcing Swiss judgments in the Czech Republic

• Can I enforce a non-monetary judgment from Switzerland (e.g., an order for a specific action)?
  Yes, the Lugano Convention is not limited to monetary claims. It also covers judgments ordering a party to perform a specific action or to refrain from doing something. The methods of enforcement for such judgments differ from debt collection, but they are fully enforceable in the Czech Republic. For help with non-monetary judgments, get tailored legal solutions by writing to office@arws.cz.
• What happens if the Czech debtor is a foreign state or enjoys diplomatic immunity?
  This is a highly specialized area of law. Under the Czech Act on Private International Law and general international principles, foreign states enjoy immunity from jurisdiction for acts performed in their sovereign capacity. However, this immunity is generally not absolute and does not apply to purely commercial activities. Enforcing a judgment against a state entity requires a specific legal strategy. Facing a sovereign debtor? Our lawyers are ready to assist you – email us at office@arws.cz.
• Is arbitration a better alternative to litigation for Swiss-Czech disputes?
  Arbitration can be an excellent alternative, often offering greater confidentiality, speed, and the ability to choose arbitrators with specific industry expertise. An arbitral award is enforceable in the Czech Republic under the New York Convention. The best choice between litigation and arbitration depends on the specifics of your contract and the nature of the dispute. To discuss your dispute resolution strategy, contact us at office@arws.cz.
• My Czech partner is threatening a counterclaim in the Czech courts. How does this affect my enforcement action?
  A counterclaim is a separate legal action initiated by the debtor against you. It does not automatically halt the enforcement of your final and valid Swiss judgment. However, it can complicate the overall legal situation and may be used as a tactic to delay payment. A swift and strategic response to any counterclaim is critical to keep your enforcement on track. Need legal help with a counterclaim? For immediate assistance, write to us at office@arws.cz.
  
• Does ARROWS offer services to prevent future disputes with Czech partners?
  Absolutely. Proactive legal planning is the most effective way to manage risk. Our services include drafting and reviewing commercial contracts to ensure they are fully compliant with Czech law and protect your interests, preparing robust internal company policies, and providing professional training for your management and sales teams on the specifics of the Czech commercial environment. To proactively protect your business, do not hesitate to contact our firm – office@arws.cz.

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