Arbitration proceedings

The area of arbitration proceedings in the Czech Republic is regulated in Act no. 216/1994 Coll. governing arbitration proceedings and the enforcement of arbitration rulings (hereafter simply referred to as the “Arbitration Act”). According to section 2 of the Arbitration Act, the parties may agree that one or more arbiters or the permanent court of arbitration (an arbitration agreement) may hear and rule on any property disputes which would otherwise fall under the authority of the courts.

The arbitration agreement
The arbitration agreement may concern a) a single already arisen dispute (an arbitration agreement) or b) all disputes which may arise in the future from certain legal relations or from a defined set of legal relations (an arbitration clause).

The leading institution for arbitration proceedings in the Czech Republic is the Court of Arbitration at the Chamber of Commerce of the Czech Republic and the Agrarian Chamber of the Czech Republic.

The arbitration clause
If the parties intend to conclude a contract with a clause stating that all disputes arising from the contract will be decided upon in arbitration proceedings held at the Court of Arbitration at the Chamber of Commerce of the Czech Republic and the Agrarian Chamber of the Czech Republic, it is advisable for the parties in question to use the following recommended wording for the arbitration clause: “All of the disputes arising from this contract and in association with it will be resolved with final validity by means of a ruling issued by three arbiters at the Court of Arbitration at the Chamber of Commerce of the Czech Republic and the Agrarian Chamber of the Czech Republic in accordance with the rules of the given court.”

This arbitration clause can be modified in such a way so that the dispute will be heard by only one arbiter appointed by the Chairman of the Court of Arbitration.

The advantages of arbitration
One of the many reasons for negotiating the jurisdiction of the Court of Arbitration at the Chamber of Commerce of the Czech Republic and the Agrarian Chamber of the Czech Republic is the fact that arbitration proceedings are undoubtedly faster than proceedings before the general courts, there is no admissible appeal against an arbitration ruling and the fee for the arbitration proceedings only amounts to 3% of the value of the subject of the dispute.

An indisputable advantage of proceedings before the Court of Arbitration at the Chamber of Commerce of the Czech Republic and the Agrarian Chamber of the Czech Republic is also the plaintiff’s option when bringing the case to arbitration of requesting that the dispute is resolved with final effect by the court of arbitration within 3 months of the payment of the fee for the arbitration proceedings. The fee for these so-called accelerated arbitration proceedings is increased by 50%. If the proceedings are not completed within the 3-month deadline, the Court of Arbitration is obliged to return the increased fee.

Mgr. Jan Urbanec

Further articles about arbitration proceedings:

Online arbitration proceedings