2016/1/14 - 30 Cdo 1941/2015 (summary)

Judgement of the Supreme Court dated 14 January 2016, file number 30 Cdo 1941/2015

(international jurisdiction, contractual penalty)



The case concerned a labour contract. In accordance with the contract the plaintiff should have manufactured and supplied ordered goods. Under the contract the parties agreed with contractual penalty if the defendant was in default with the payment. On the basis of the agreement the plaintiff requested the court for the payment of the contractual penalty amounting to EUR 17,871.50 by the defendant. In spite of the fact that the defendant objected to the lack of jurisdiction of the courts of the Czech Republic, the court of first instance decided on the dispute in view of Art. 5 para. 1 of Council Regulation (EC) No. 44/2001. However, the appellate court came to the opposite conclusion in accordance with the same provision, and due to the lack of jurisdiction of the courts of the Czech Republic quashed the judgement and discontinued the proceeding. The plaintiff lodged an application for appellate review of the judgement, and contested the appellate court’s opinion regarding lack of jurisdiction of the courts of the Czech Republic explaining that the contractual penalty was a separate claim, and that was why it may not have been considered as a claim resulting from the sale of the goods within the intention of the Council Regulation (EC) No. 44/2001.

The Supreme Court stated that the lower courts correctly applied Art. 5 para. 1 of Council Directive (EC) No. 44/2001 containing the rule of special jurisdiction in contractual matters. It came to the conclusion that it was not possible to bore the appellant out in the opinion that the given article of Council Directive (EC) No. 44/2001 may have been applied only to disputes directly connected with the sale of goods, because the Court of Justice of the European Union did not accept such limitations. The Supreme Court reminded of the fact that the Council Regulation (EC) No. 44/2001 should have been interpreted autonomously, considering its systematics and objectives. This way it respected judgements of the Court of Justice of the European Union emphasizing that the objective of the Union legislator was to concentrate deciding on all interests resulting from a contract within the intention of Art. 5 clause 1 b) of Council Regulation (EC) No. 44/2001 in one court. That is why the fact that contractual penalties are considered as separate possessory interest, having a separate property basis, by the national legislation does not have bearing on interpretation of extent of claims resulting from the contract in accordance with Art. 5 para. 1 of Council Regulation (EC) No. 44/2001, and the extent of claims should be determined autonomously. Considering the above-mentioned facts the Supreme Court concluded that the application for appellate review was not justified, and dismissed it.