BUSINESS DISPUTES

Are you facing a commercial dispute or concerned that one may arise? An unexpected confrontation can jeopardize not only a specific contract, but also the stability of your entire company. At ARROWS, we provide comprehensive legal services in the area of dispute resolution, transforming your legal uncertainty into a strategic advantage. Thanks to our experience in litigation and arbitration, both in the Czech Republic and abroad, we can help you protect your interests and achieve the best possible outcome. Find out what steps you can take and how we can help you.

A commercial dispute on the horizon? Time is of the essence, strategy is key.

Commercial disputes are, unfortunately, a common part of doing business. Whether it's an unpaid invoice, defective performance of a contract for work, or disagreements between partners, the key to success is not to panic and to act strategically. The first hours and days after a conflict arises are often decisive for establishing an advantageous position in further negotiations or in the proceedings themselves.

Neglecting the initial phase of a dispute can lead to irreversible damage or make it significantly more difficult to enforce your rights. That is why it is crucial to seek professional legal assistance as soon as possible to help you analyze the situation, secure evidence, and choose the right course of action.

What are the first steps to take when a conflict arises?

The most effective defense is often quick and targeted action to prevent further damage to your rights. One of the strongest tools offered by Czech law is preliminary measures. This is a quick court decision that can, for example, prohibit the other party from disposing of property, order them to do something, or refrain from doing something, even before the main court proceedings begin.

The purpose is not to finally decide the dispute, but to temporarily adjust the circumstances so that no irreversible damage occurs while the lawsuit is being prepared. Obtaining preliminary measures can completely change the dynamics of a dispute, strengthen your negotiating position, and often force the other party to seek an amicable solution.

ARROWS lawyers will help you immediately analyze the situation and, if necessary, secure your rights through preliminary measures.

Two paths, one goal: Which solution is right for you?

Every dispute is unique and requires an individual strategy. There are basically two main ways to resolve commercial disputes: traditional court proceedings (litigation) and more flexible arbitration. The choice between them is not just a technical detail, but a fundamental strategic decision that will affect the speed, cost, and confidentiality of the entire process.

Court proceedings (litigation): When is it unavoidable and what should you prepare for?

Court proceedings are a traditional and formalized process of dispute resolution before state courts. They begin with the filing of a lawsuit with the court with subject-matter and territorial jurisdiction, which in commercial matters is typically a regional court. The proceedings are public, which means that the hearings are open to the public and sensitive business information may be disclosed.

Our team will guide you safely through all stages of the court proceedings, from filing a lawsuit to representation before the Supreme Court and the Constitutional Court. We know not only the laws, but also court practice, and our personal experience with a significant number of judges in the Czech Republic allows us to effectively defend your interests.

(photo: ARROWS law firm team)

Arbitration: Speed, discretion, and expertise for your business?

Arbitration is a modern and increasingly popular alternative to courts, especially in commercial relationships. It is based on an agreement between the parties, usually in the form of an arbitration clause in a contract, that any disputes will not be resolved by courts, but by independent and impartial experts – arbitrators.

The main advantages of arbitration are indisputable: speed (most disputes are resolved within a year), confidentiality (protecting your trade secrets and reputation) and the possibility of choosing an arbitrator who is an expert in the relevant field (e.g., construction, IT, commodities).

ARROWS will help you draft an arbitration clause that precisely matches your business objectives and protects you from future risks.

Common commercial disputes: Risks and how to prevent them

Many disputes arise from unclear or unfavorable contracts. Prevention is always cheaper than dealing with the consequences. Below are the most common risks we encounter in practice and how we can help you with them.

Key risks arising from poorly drafted contracts

Risk to Address	Potential Issues and Penalties	How ARROWS Helps
Incorrectly defined subject matter of the contract	Disputes over scope of performance, delivery of unwanted product/service, inability to file complaints, unenforceable rights.	We carefully draft and review contracts that clearly define the subject matter and acceptance criteria.
Unclear pricing and payment terms	Disputes over final price, unexpected additional costs, cash-flow issues, unenforceable invoices, penalties for breaching payment legislation.	We formulate clear payment terms, including VAT, due dates, and late payment penalties.
Unenforceable or missing contractual penalty	Inability to effectively penalize contract breaches, loss of deterrent effect, court moderation of disproportionate penalties.	We design fair and legally enforceable penalty clauses that truly protect your interests.
Missing intellectual property (IP) provisions	Disputes over ownership and use of deliverables (software, design), unauthorized third-party use, loss of control over innovations.	We ensure proper licensing clauses and IP transfer provisions to protect your innovations and investments.
Ignoring mandatory legal provisions	Absolute invalidity of parts or the whole contract, even with mutual consent; legal uncertainty.	We conduct legal reviews and consultations to ensure compliance with applicable laws and case law.
Insufficient termination clauses	Inability to efficiently exit unfavorable cooperation, disputes over notice periods and grounds for termination, automatic renewal surprises.	We draft clear termination rules, including definitions of material breach and withdrawal conditions.
Use of an unverified online template	The contract may contain outdated, invalid, or unsuitable provisions for your case, often misunderstood.	We prepare tailor-made documentation reflecting your business specifics and current legal requirements.

The dispute resolution process itself carries risks that need to be strategically managed.

Risks associated with court and arbitration proceedings

Risk to Address	Potential Issues and Penalties	How ARROWS Helps
Delays in legal proceedings	Business and financial resources may be tied up for years, lost business opportunities, claims may become time-barred. Court disputes can last over 10 years.	We apply proactive procedural strategies, suggest efficient approaches, and recommend faster arbitration where appropriate.
Public nature of court hearings	Reputational damage, disclosure of sensitive business information to competitors, negative media exposure.	We recommend discreet arbitration proceedings to protect your privacy and trade secrets.
High and unpredictable costs	Financial strain, obligation to cover the opposing party’s costs if unsuccessful, threat to company stability.	We provide transparent cost estimates, strategies to minimize unnecessary expenses, and legal advice on dispute funding.
Personal liability of company executives	Board members may be required to return benefits or cover company liabilities if they contributed to its insolvency (e.g., by initiating an ill-advised dispute).	We provide legal consultations and documentation that protect both the company and its management from personal liability and related risks.
Unenforceable judgments abroad	Pyrrhic victory – you win the case but cannot enforce the ruling against a foreign partner.	We design dispute resolution strategies (especially arbitration) with international enforceability in mind, in line with the New York Convention.

International disputes: Your global ambitions, our local knowledge

Doing business without borders brings enormous opportunities, but also specific risks. A dispute with a foreign partner is not just a routine dispute in a foreign language. It is a clash of different legal systems, cultures, and procedural rules. What works in the Czech Republic may be completely ineffective in Germany or the US.

How does cross-border enforcement work?

Imagine that you win a dispute against a foreign company in a Czech court. However, the judgment itself may be useless if there is no international treaty ensuring its recognition and enforcement in the country where the other party is based. This process can be lengthy and uncertain.

This is where the power of international arbitration comes into its own. Thanks to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, signed by the vast majority of countries in the world, an arbitral award issued in one country is as easily enforceable in another country as a domestic judgment. This gives arbitration a huge advantage in international trade.

Who can you contact?

ARROWS International Network: Your partner in over 90 countries

Resolving international disputes requires perfect coordination – in-depth knowledge of local law and a unified strategy managed from a central location. This is exactly what we offer you through our ARROWS International network. Instead of searching for and vetting lawyers in dozens of countries yourself, you get a single point of contact in Prague who coordinates everything for you.

Thanks to our unique ARROWS International network, built up over more than ten years, we can protect your legal interests virtually anywhere in the world, all with coordination and strategy managed from a single location in Czech. Our partners are not just lawyers, they are proven experts who know the local environment and will help you avoid costly mistakes.

Comprehensive ARROWS support: From prevention to a winning solution

We view dispute resolution as a complex discipline that begins long before the first court hearing and ends with the successful enforcement of your claim. We therefore provide a comprehensive system of legal protection for your business.

Phase 1: Prevention and risk minimization

• Contract preparation and review: We ensure that your contracts are watertight and contain effective dispute resolution mechanisms, such as properly worded arbitration clauses.
• Preparation of internal guidelines and documentation: We help you set up internal processes that prevent conflicts from arising and protect you from fines and penalties.

Phase 2: Strategic advice and strengthening your position

• Legal advice and opinions: We provide quick and clear legal analyses that enable you to make informed decisions at critical moments and protect yourself from audits.
• Professional training for employees and management: We educate your teams to understand legal risks and prevent them effectively. Our clients also receive a certificate of completion from us.

Phase 3: Active and effective dispute resolution

• Representation before courts and administrative authorities: We vigorously and strategically defend your interests in all types of proceedings, both in the Czech Republic and abroad.
• Representation in arbitration proceedings: We use our in-depth knowledge of arbitration (e.g., under ICC, VIAC, or UNCITRAL rules) to achieve fast and effective results.
• Obtaining the necessary licenses and permits: We ensure that your business has all the necessary authorizations and is not vulnerable to regulatory intervention.

Your next step towards legal certainty

Commercial disputes are a tough test for any company. But with us, you don't have to face them alone. At ARROWS, we approach every case with strategy, expertise, and a determination to protect what you have built. We are trusted by more than 2,000 clients, and our work has been recognized with the title of Law Firm of the Year 2024.

Don't let legal uncertainty slow down your growth – contact us for a no-obligation initial consultation to find out how we can protect and strengthen your business.

Don't want to deal with this problem on your own? More than 2,000 clients trust ARROWS Law Firm, and we have been awarded the title of Law Firm of the Year 2024. Take a look at our references HERE, and we will be honored to help you solve your problem. The inquiry is free of charge.