A Slovak, Czech or European payment order: what to choose when the debtor is based across the Czech-Slovak border

A Slovak supplier has an unpaid invoice against a company in Ostrava and the debtor does not dispute the claim, it simply does not pay. A Czech company with a Slovak customer faces the same question. For an undisputed monetary claim there are three routes: a payment order under the law of the debtor’s state, a payment order under domestic law followed by enforcement across the border, or a European order for payment under Regulation (EC) No 1896/2006. The European order applies between Slovakia and Czechia because the parties are domiciled in different Member States (Article 3). None of the routes is universally best and each has different weak points.

Where you can bring proceedings at all

The choice of court precedes the choice of procedure. The debtor may be sued in the state of its domicile (Article 4 of the Brussels I bis Regulation), unless the parties have conferred exclusive jurisdiction on another court. For a contractual claim, the creditor’s home court generally comes into play only where, under the contract, the goods were delivered or the services provided in the creditor’s state (Article 7(1)), or where the parties agreed the court in writing (Article 25). The same rules apply to national and to European orders alike. If the home court has no jurisdiction, the real choice lies only between a national order in the debtor’s state and a European order filed there.

One further restriction applies before a Czech court. A Czech payment order cannot be issued if it is to be served on the defendant abroad (Section 172(2)(b) of Act No. 99/1963 Coll.), and the same applies to an electronic payment order (Section 174a(3)). A Czech company suing a Slovak customer before a Czech court will therefore not obtain a national order, and the undisputed claim is dealt with by a European order for payment or by an ordinary claim. The Slovak Code of Civil Dispute Procedure contains no comparable prohibition in its provisions on payment orders.

The debtor’s defence: a reasoned or an unreasoned objection

This is where the routes differ most. A Slovak payment order under the Code of Civil Dispute Procedure requires the debtor to pay within 15 days of service or to file an objection within the same period (Section 265(1)). The objection cannot be merely formal:

An objection to a payment order must be substantively reasoned.

— Section 267(1) of Act No. 160/2015 Coll. (unofficial English translation)

The period for objecting to a Czech payment order is likewise 15 days (Section 172(1) of Act No. 99/1963 Coll.). A European order gives the debtor 30 days and the statement of opposition need give no reasons at all:

The defendant shall indicate in the statement of opposition that he contests the claim, without having to specify the reasons for this.

— Article 16(3) of Regulation (EC) No 1896/2006 (unofficial English translation)

For the creditor this means that a European order can be stopped even by a debtor with no substantive defence who merely wants to gain time. A Slovak national order at least forces such a debtor to describe a defence. We discuss what a substantively reasoned objection looks like in the question what an objection to a payment order must contain.

Service across the border

All three orders depend on service on the debtor. A Slovak payment order is served into the addressee’s own hands, the fiction of service on a returned consignment does not apply, and if it cannot be served the court sets it aside (Section 266(1) to (3)). A Czech payment order is likewise served into the addressee’s own hands and substitute service is excluded, save for service to a data box (Section 173(1) of Act No. 99/1963 Coll.). The same rule on service into the addressee’s own hands applies to a European order issued in Czechia (Section 174b(1)). The Regulation itself also permits certain methods of service without proof of receipt, but not where the debtor’s address is not known with certainty (Article 14(2)). With a debtor who avoids collecting post, a precise and current address of the registered office is therefore decisive on every one of the routes.

Enforcement across the border

If you have obtained a Slovak payment order and the debtor has assets in Czechia, it will be enforced there as a judgment under the Brussels I bis Regulation without any declaration of enforceability (Article 39). You need a copy of it and a certificate from the Slovak court under Article 53 (Article 42(1)); the enforcement authority may require a translation of the whole decision only if it cannot otherwise proceed (Article 42(4)). A European order for payment is enforced on the basis of a declaration of enforceability on form G without any further recognition (Articles 18(1), 19 and 21(2)) and, according to information on the European e-Justice Portal, Czechia accepts only Czech for any translation of it. The detailed procedure is set out in the question how to enforce a European order for payment abroad.

Court fees

In Slovakia, a payment order under the Code of Civil Dispute Procedure and a European order alike attract the fee payable on a claim under item 1(a) of the schedule (note 5 to item 1). Half the percentage rate applies only to the separate electronic payment order proceedings under Act No. 307/2016 Coll. (Section 11c of Act No. 71/1992 Coll.). In Czechia, a European order attracts the general court fee for an application to commence proceedings for a monetary payment, above CZK 20,000 amounting to 5 per cent of the sum claimed. A Czech electronic payment order filed through the designated application is cheaper, costing 4 per cent above CZK 20,000. So if you are suing a Czech debtor in Czechia and the claim is undisputed, the national electronic order tends to be the better option.

How to decide

• The debtor is based in Czechia and the claim is undisputed: a Czech electronic payment order before a Czech court, or alternatively a European order.
• A Czech company suing a Slovak debtor before a Czech court: a European order for payment, because a Czech national order cannot be issued if it is to be served abroad.
• A Slovak court has jurisdiction and the debtor has assets in Czechia: a Slovak payment order and enforcement in Czechia under Brussels I bis, or a European order.
• The debtor will probably object only to gain time and a Slovak court has jurisdiction: a Slovak payment order, where the defence must be substantively reasoned.
• A series of claims into several EU states: a European order with a single set of forms.

We prepare the choice of route, the application and enforcement through our European order for payment service. For claims between Slovakia and Czechia we conduct the whole of cross-border debt recovery from the demand to enforcement. Where to file a European order and what the fee is we describe in the question which court to file a European order for payment with.