2017/8/16 - 20 Cdo 5882/2016 (summary)

Decision of the Supreme Court of 16 August 2017, Ref. No. 20 Cdo 5882/2016

(Enforcement of a foreign arbitration award, enforcement proceedings)

Applicant sought the enforcement of an arbitration award, which had been issued by the Slovak arbitration tribunal, in the Czech Republic. Bailiff refused the application for the enforcement on the ground that the applicant had not attested that the arbitration clause complies with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("the New York Convention"). Subsequently, the decision was confirmed on appeal by the Regional Court in Brno. However, it stated that it should be preceded under the bilateral treaty concluded between the Czech Republic and the Slovak Republic, according to which the recognition is governed by the law of the country where the decision is to be enforced, i.e. by the Czech law. Accordingly, the appellate court concluded that the arbitration award can only be enforced in the Czech Republic by a court and not by the bailiff.

Firstly, the Supreme Court addressed the issue of the conflict between the New York Convention and the bilateral treaty. It has referred to its previous case-law, according to which the New York Convention has a specific subject-matter. Therefore, it is lex specialis towards the bilateral treaty. However, the most favorable treatment clause under Article VII of the New York Convention allows the application of rules on recognition and enforcement of bilateral treaties or national law that may be more liberal than the Convention. As the appellate court did not deal with the premise of a more liberal recognition of the arbitration award, its conclusion is incorrect. However, the Supreme Court stated that the decision as a whole was correct, as it was also based on other arguments. In particular, the conclusion of the appellate court that the enforcement of the arbitration award in question can only be carried out by a court was correct. Foreign arbitration award has to be recognized in the Czech Republic before the enforcement may begin. However, the arbitration award is not recognized by the appointment of a bailiff since this act is not a decision by which the enforcement may be denied. For this reason, the decision of the appellate court was correct.