2017/3/28 - 23 Cdo 1539/2015 (summary)

Judgement of the Supreme Court dated 28 March 2017, file number 23 Cdo 1539/2015

(insolvency, court fees)

The plaintiff, who is based in London, has not been exempt from court fees by a Czech court. He asked for this exemption as he had already been declared bankrupt by a court in London and his liquidation had been ordered. Referring to Council Regulation (EC) No 1346/2000 (the Insolvency Regulation), he concluded that the bankruptcy status is also recognized in the territory of the Czech Republic where the applicant had some of his property. He therefore argued that he was exempt from court fees under the Civil Procedure Code. However, the appellate court upheld the judgment of the court of first instance and found that the bankruptcy status and winding-up does not automatically justify the granting of an exemption from the court fees.

The Supreme Court stated that, pursuant to Article 17 (1) of the Insolvency Regulation, the decision to open insolvency proceedings without any further formalities in any other Member State has the same effects as the law of the State which initiated the proceeding unless this Regulation provides otherwise, and until the procedure under Article 3 (2) is initiated. The Czech Act No. 91/2012 on International Private Law then grants a right to exemption from court fees to foreigners. In the case of citizens of the European Union member states, the condition of reciprocity is not required. Provided that the decision to initiate insolvency proceedings in another Member State of the European Union has the same effects as the bankruptcy proceedings against the debtor's property by a Czech court, the court must examine the conditions for granting the exemption from court fees as if it were of the party in the proceedings on whose property the bankruptcy proceedings were declared by the Czech court. Since the Court of Appeal did not consider these preconditions for exemption from court fees, its legal assessment was not correct. The Supreme Court therefore annulled the decision and remanded the case to an lower court.