A payment order under the Code of Civil Dispute Procedure, or electronic payment order proceedings: two routes to a title and two ways of defending

With an undisputed monetary claim, a Slovak creditor has two routes to a payment order. The first is a claim before the locally competent court under the Code of Civil Dispute Procedure, on which the court may decide by payment order; the claimant may also attach a completed payment order on the prescribed form. The second is electronic payment order proceedings under Act No. 307/2016 Coll. Both end in the same result if the debtor does nothing, but they differ in their conditions, in their cost and above all in what happens when the debtor files an objection. For the defendant it matters to know which order has arrived, because the form of the defence depends on it.

Proceedings under this Act are an alternative means of pursuing monetary claims to the procedure under the Code of Civil Dispute Procedure.

— Section 1(2) of Act No. 307/2016 Coll. (unofficial English translation)

Where and how it is filed

The court may issue a payment order under the Code of Civil Dispute Procedure where the case can be decided on the facts alleged by the claimant that the court has no doubts about, particularly where they follow from documents (Section 265(1) of the Code). If the claimant submits the order on the published form, the conditions are met and the fee is paid, the court issues it within ten working days at the latest (Section 265(2)).

Electronic payment order proceedings are conducted by a single court, the Banská Bystrica District Court (Section 2 of Act No. 307/2016 Coll.). The application is filed exclusively by electronic means on the designated form and must be authorised (Section 4(1)). The claimant must have an activated electronic mailbox and the order may not be served abroad (Section 3(6)(b) and (d)). If both parties are accounting entities, it is enough to attach the invoice and declare that the claimant records the claim in its accounts (Section 3(3)). Inadmissible is, for instance, agreed default interest exceeding the statutory rate by more than five percentage points, or a claim on a bill of exchange against a natural person (Section 3(5)). Here too the court issues the order within ten working days at the latest of the conditions being met (Section 7(1)).

The court fee

In electronic payment order proceedings, half of the percentage rate from the schedule is payable, with no cap on the reduction. The fee must be paid in full within 15 days of filing the application; the court does not invite payment and otherwise the application is disregarded (Section 11c(1), (3) and (4) of Act No. 71/1992 Coll.). A claim filed under the Code of Civil Dispute Procedure electronically to the court’s mailbox also attracts half the fee, but the reduction is limited by the Act to a fixed sum (Section 6(3)), so with larger claims the electronic payment order proceedings work out cheaper. We will confirm the exact amount for your claim when we assess the documents.

Service

Both orders are served on the defendant into their own hands, and the fiction of service on a returned consignment does not apply (Section 266(1) and (2) of the Code, Section 9(4) of Act No. 307/2016 Coll.). An order from electronic payment order proceedings is served primarily by electronic means to the defendant’s mailbox (Section 9(2)). The difference lies in what follows unsuccessful service. Under the Code of Civil Dispute Procedure, the court sets the order aside and continues to deal with the claim (Section 266(3)). In electronic payment order proceedings, the court invites the claimant to apply within 15 days for continuation before the competent court; if the claimant does not, the order is set aside, the proceedings are discontinued and neither party is entitled to reimbursement of costs (Section 10(1) and (2)).

The defendant’s defence

The period is in both cases 15 days from service (Section 265(1) of the Code, Section 7(2) of Act No. 307/2016 Coll.) and the objection must contain substantive reasons (Section 267(1) of the Code, Section 11(1) of Act No. 307/2016 Coll.). The electronic payment order proceedings add further requirements. An electronic objection may be filed only on the designated authorised form (Section 11(2)). If both parties are accounting entities, the defendant must state whether the invoice was served, how it was dealt with and whether the claim is recorded in the accounts (Section 11(3)). If the claimant declared that the invoice was included in its VAT control statement and the defendant included it in its own, the defendant must seriously challenge the claim and substantiate its assertions with documents within the objection period (Section 11(4)). An objection filed in electronic payment order proceedings cannot be withdrawn (Section 11(1)). We discuss what exactly to put in an objection in the question what an objection to a payment order must contain.

Only in electronic payment order proceedings may a natural person, instead of objecting, apply for permission to perform in instalments, and then on strict conditions (Section 13(1) and (3)), which our objection to a payment order service describes in detail. For a company as defendant, this option does not exist.

What happens after an objection

Under the Code of Civil Dispute Procedure, a timely objection with substantive reasons sets the order aside and the court schedules a hearing (Section 267(4)). In electronic payment order proceedings, an objection likewise sets the order aside, but the initiative passes to the claimant. The court sends the objection to the claimant with an invitation to respond within 15 days and to apply for continuation before the court competent under the Code of Civil Dispute Procedure (Section 14(1)). The consequence of inaction is unambiguous:

On the fruitless expiry of the period for filing an application for continuation of the proceedings under subsection 1, the proceedings are discontinued. The court shall decide on reimbursement of the costs of the proceedings upon application.

— Section 14(2) of Act No. 307/2016 Coll. (unofficial English translation)

During electronic payment order proceedings, no account is taken of, for instance, a counterclaim, an amendment of the claim or an application for an interim measure; these are decided only by the court to which the case has been transferred (Section 15(4) and (5)).

How to decide

• Electronic payment order proceedings suit undisputed invoices against Slovak businesses where the creditor expects the debtor not to react. They are cheaper, but require an electronic mailbox and discipline with the time limits following an objection or failed service.
• A payment order under the Code is more suitable where an objection can be expected, where an interim measure must be sought together with the application, or where the claim does not meet the conditions for electronic payment order proceedings.
• For the defendant the same applies in both cases: the objection must arrive in time and with substance, and in electronic payment order proceedings in the correct form as well.

We choose the form of proceedings when assessing the documents and file the application through our payment order and payment claim (Slovakia) service. If you have received an order, send it to us at once; we will prepare the objection through our objection to a payment order service. We describe how an unchallenged order turns into enforcement in the article from a payment order to enforcement.