The Czech Supreme Court held that foreign arbitral awards falling within the scope of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards can only be enforced by Czech courts (through procedures available under the Czech Civil Procedure Code) rather than by private bailiffs under the Czech Enforcement Code. The decision, available here, represents a major drawback to the enforcement of foreign arbitral awards in the Czech Republic because the enforcement under the Enforcement Code is being widely considered as substantially more efficient than enforcement under the Civil Procedure Code.
The Supreme Court noted that pursuant to Section 37(2) of the Czech Enforcement Code, foreign decisions can serve as an execution title only if they are declared enforceable pursuant to directly applicable EU regulation or international treaty, or if they are recognized by a separate Czech decision. The foreign arbitral awards enforceable under the New York Convention, however, are normally not recognized – nor declared enforceable – in separate proceedings. Therefore, there is normally no decision recognizing these awards or declaring them enforceable. For this reason, it is not possible – in the Supreme Court’s opinion – to enforce these awards under the Enforcement Code.
There are various aspects of the Supreme Court’s reasoning that are problematic, as they open a way to controversial interpretation that the Supreme Court most probably did not envision. The decision is therefore expected to stir further public debate, which may prompt the Supreme Court to reconsider its position.