Enforcement in Czechia for a Slovak creditor: choosing the enforcement officer, advances and enforcement that yields nothing

A Slovak company holds a final payment order of a Czech court against a limited company from Ostrava and the debtor still does not pay. The next step is enforcement, which in Czechia does not begin at court but with a judicial enforcement officer. The creditor chooses that officer itself, and this is where the Czech system differs most from the Slovak one. The differences continue: in the period the debtor has for voluntary payment, in advances, and in the rules for enforcement that brings in nothing for a long time. This overview is intended for Slovak companies holding an enforcement title against a Czech debtor.

You designate the enforcement officer in the application

Under Section 28 of Act No. 120/2001 Coll., enforcement is conducted by the officer whom the creditor designates in the enforcement application. Enforcement proceedings commence on the day, hour and minute the application reaches the officer (Section 35(2)). The officer then asks the enforcement court for authorisation and an enforcement order within 15 days at the latest, and the court issues the authorisation within 15 days if the statutory preconditions are met (Section 43a(1) and (3)). The officer may ascertain and secure the debtor’s assets only after the authorisation has been issued (Section 35(3)).

A Slovak creditor familiar with the domestic procedure is usually surprised. In Slovakia the application is filed with the court and the creditor does not choose the officer:

Enforcement shall be carried out by the enforcement officer whom the court authorises to carry it out. The court shall allocate cases by issuing the authorisation to carry out enforcement evenly among individual enforcement officers by random selection using technical and software means approved by the ministry, so as to exclude any possibility of influencing the allocation of cases.

— Section 55(1) of the Enforcement Code (unofficial English translation)

The Slovak court moreover allocates the case to an officer for the region of the regional court corresponding to the debtor’s permanent residence or seat (Section 55(2)). In Czechia the creditor designates the officer itself, already in the enforcement application, so it is sensible to have one chosen before the title becomes final.

The first 30 days belong to the debtor

The officer serves on the debtor a notice of commencement of enforcement together with an invitation quantifying the claim being enforced, the advance on the reduced costs of enforcement and the creditor’s costs. If the debtor satisfies the claim and pays the advance within 30 days of service, the officer issues an order for payment of the costs of enforcement, and enforcement is completed when that order becomes final (Section 46(6)). Before that period expires, enforcement under an enforcement warrant is not carried out (Section 47(2)(a)). The officer may, however, issue an enforcement warrant once authorised, and the debtor may not deal with the assets it affects (Sections 47(1) and 47(6)). The officer pays out what has been recovered to the creditor, after deducting the costs of enforcement, within 30 days of receiving it (Section 46(4)).

Who pays the costs and why a check on the debtor pays off

The costs of enforcement are borne by the debtor and paid to the officer (Section 87(4)), and the creditor is entitled to reimbursement of costs reasonably incurred in pursuing recovery (Section 87(2)). The officer may, however, require a reasonable advance on the costs of enforcement from the creditor (Section 90(3)) and, if the creditor does not pay it, will discontinue the enforcement (Section 55(6)). Costs paid out of the advance become the creditor’s costs, which the debtor must reimburse (Section 87(2)), but with an impecunious debtor they remain with the creditor. Before filing, it is therefore worth checking the debtor in the commercial register, in the collection of documents and in the insolvency register; the procedure is described in our answer on how to check a Czech company.

When enforcement brings in nothing for years

Czech law does not let fruitless enforcement run indefinitely. If over the last 6 years from the marking of the clause on the conduct of enforcement there has been not even partial satisfaction and the enforcement does not affect immovable property, the officer invites the creditor to state within 30 days whether it agrees to discontinuance. If the creditor agrees or stays silent, the officer discontinues the enforcement (Section 55(7)).

A creditor who does not agree to discontinuance is invited by the officer to pay an advance on the further conduct of the enforcement; if it does not pay within 30 days of service of that invitation, the officer discontinues the enforcement (Section 55(8)). Once the advance is paid, the period is extended by 3 years and the procedure may be repeated, but the total period without any recovery whatsoever may not exceed 12 years from the marking of the clause or from the last payment recovered (Section 55(11)). On such a discontinuance, the costs of the fruitless enforcement are fixed at the minimum amount and paid out of the advance (Section 55(13)).

When the debtor ends up in insolvency

Where a special statute provides that enforcement may not be carried out, the officer does not take the steps by which enforcement is carried out, and hands over what has been recovered after the decision on insolvency to the insolvency administrator (Section 46(7)). A creditor with enforcement under way must therefore register its claim in the insolvency proceedings in time; the procedure is described in our registration of a claim in Czech insolvency proceedings service.

How we proceed

With a Czech debtor we prepare the enforcement application with a precise breakdown of principal and accessories, select the enforcement officer and monitor the course of the proceedings, including invitations that must be answered within the period. We do this under our debt recovery in the Czech Republic service; how enforcement runs in Slovakia is described on the page enforcement recovery. If you hold a decision of a Slovak court, it is enforced in Czechia under the Brussels I bis Regulation without any special declaration of enforceability (Article 39); a comparison of the routes to a title is set out in our article on a Slovak, Czech or European payment order. The interest that belongs in the enforcement application is explained in our answer on default interest on an invoice between a Slovak and a Czech company.