2021/04/01 – 20 Cdo 2432/2020 (summary)

Resolution of the Supreme Court of 1 April 2021, Case No 20 Cdo 2432/2020

(Section 14–16 of the Act on Private International Law; recognition of a foreign judgment; res judicata)

The Supreme Court of the Czech Republic addressed a case concerning the recognition of a foreign judgment issued by a Belarusian court. The decision in question ordered a company to pay the claimant approximately €194.

The first-instance court discontinued the proceedings, reasoning that the Belarusian judgment had already been recognized in 2019 concerning the original debtor. It held that recognizing the same foreign judgment again would violate the principle of res judicata. According to the first-instance court, the prior recognition of the Belarusian judgment was binding and precluded further proceedings involving the same decision.

The appellate court overturned this decision, emphasizing that the current proceedings involved a different party—a statutory guarantor under Czech corporate restructuring law—rather than the original debtor or their legal successor. The appellate court concluded that res judicata did not apply because the parties in the current and prior proceedings were not identical. It ruled that the recognition proceedings should continue.

An extraordinary appeal was filed to the Supreme Court arguing that Czech courts lack jurisdiction to formally recognize foreign judgments when an applicable treaty, specifically the 1982 Treaty on Legal Assistance between the Czech Republic and Belarus (hereinafter referred to as the “Treaty”), provides for informal recognition. They also questioned whether recognition should have universal binding effects, precluding subsequent recognition proceedings even if different parties were involved.

The applicable legal framework for this case was the Act on Private International Law (“Zákon č. 91/2012 Sb. o mezinárodním právu soukromém”, hereinafter referred to as the “ZMPS”), interpreted in light of the Treaty. According to the ZMPS, foreign judgments gain legal effect in the Czech Republic if they are final and recognized by Czech public authorities. Exceptions include cases where conflicting domestic judgments exist or if procedural deficiencies prevent recognition, as outlined in Sections 14–16 of the  ZMPS.

Under the Treaty, public documents issued by judicial or other competent authorities of one contracting State are recognized as valid without additional verification in the other State. Moreover, final judgments in civil, labour, and family matters, as well as criminal judgments regarding compensation, are mutually recognized and enforceable if issued after the Treaty's entry into force. The recognition process includes verifying compliance with the Treaty conditions, with enforcement contingent upon a judicial determination of these criteria.

The Supreme Court emphasized the theoretical foundations of private international law concerning the recognition of foreign judgments. It highlighted that recognition is a legal process in which a foreign judgment is accorded the same effects as a domestic one, provided it meets the established criteria. This process is a discretionary act of the recognizing state, governed by domestic law and international agreements. It reflects the principle that foreign judgments hold no inherent effect in another State without such recognition.

Based on the theoretical principles cited in the decision, the Supreme Court therefore had no reason to doubt that the direct addressee of the process of recognizing a foreign decision is solely the State that accepts the foreign decision, along with the effects associated with it, as its own decision. By doing so, this State affirms that its courts and other authorities competent under its legal system will no longer decide on the specific legal relationship in question.

According to the Supreme Court of the Czech Republic, this also expresses that the outcome of the recognition proceedings for a foreign decision—whether positive in the form of recognition or negative in the form of denial of recognition—primarily impacts the legal relationships within the recognizing State, not merely the participants in the given proceedings. The existence of recognition of a specific foreign decision thus binds not only the authorities of the recognizing State in subsequent proceedings (typically enforcement proceedings) but also all individuals involved in court proceedings conducted before the authorities of the recognizing State.

The Supreme Court therefore concluded that by the recognition of the Belarusian judgment in the previous proceedings was the issue of any further recognition of this foreign decision within the territory of the Czech Republic finally resolved and any new consideration of the proposal is barred by the principle of res judicata.