2015/9/30 - 29 Cdo 2842/2013 (summary)

Judgement of the Supreme Court dated 30 September 2015, file number 29 Cdo 2842/2013

(international jurisdiction, a business share, transfer)

The case dealt with a claim for payment of a price of share in a limited liability company. The plaintiff residing in the Czech Republic claimed payment of the amount of the share in a company domiciled in the Czech Republic by a company domiciled in Austria before courts of lower instances. Although before the court of first instance the defendant pleaded lack of international jurisdiction of the courts of the Czech Republic, the district court and the appellate regional court decided that the place of the contract performance was in the Czech Republic, and as a result of that, in accordance with Art. 5 para. 1a) of Council Regulation (EC) No. 44/2001, the courts of the Czech Republic were having jurisdiction, and they satisfied the action. The defendant lodged application for appellate review of the appellate court’s decision in the Supreme Court. The appellant argued that the place of discharge may not have been derived just from the plaintiff’s place of residence, because in accordance with Section 339 of Act No. 513/1991 Coll., Commercial Code, a pecuniary obligation may be discharged by bank transfer, and that was why the place where the creditor’s account was kept was the place of discharge.

At first, the Supreme Court examined whether the parties had made a prorogation agreement in accordance with Art. 23 of Council Regulation (EC) No. 44/2001. As it was found out that the agreement hadn’t been made, and it was a claim resulting from the contract, the Supreme Court stated that the case should have been examined in accordance with Art. 5 para. 1 of Council Regulation (EC) No. 44/2001 to determine international jurisdiction. In accordance with letter a) of the above-mentioned provision, a person may be sued in other member state than his country of residence if the obligation should have been performed in the other member state. Considering the conflict rules, the Court applied provisions of the Czech Commercial Code to determination of the “place of performance of the obligation”. In accordance with Section 337 of the Commercial Code, place of performance of the obligation under the contract on business share transfer is the creditor’s place of residence, i.e. the plaintiff’s place of residence. The “alternative” place of performance claimed by the defendant just enabled other way of performance of the obligation by the debtor. However, general provisions should be used to determine international jurisdiction of the courts. That is why the Supreme Court affirmed decisions of the lower courts, and concluded international jurisdiction of the courts of the Czech Republic, because the obligation should have been performed in the Czech Republic, therefore the Supreme Court dismissed the application for appellate review.