Procedural Issuessk en

[slovenske znenie]


Jurisdiction of courts of the Slovak Republic

As the disputes arising from international sale of goods inevitably concern two merchants from different states, it is important to ascertain courts which of these states will have jurisdiction to settle these disputes. The answer for this question is generally prescribed by rules of private international law and with respect to Slovakia, it is regulated by uniform European Community legal instrument, Council Regulation no. 44/2001 of 22 December on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (hereinafter referred to as “Regulation” or “Brussels I. Regulation”). Courts of the Slovak Republic will have jurisdiction to settle a dispute concerning rights and obligations under CISG, if at least one of the subsequent requirements is fulfilled:

a) under art. 2 of the Regulation if the defendant (person being sued) is domiciled in the Slovak Republic, regardless of its nationality. The notion domicile is defined:

- with respect to legal entities including companies and corporations in art. 60 of the Regulation as:

• statutory seat – registered in the Companies Register of the Slovak Republic
• central administration – place where the decision-making process inside the legal entity takes place
• principal place of business – usually registered in the Trade Register of the Slovak Republic or in case of an enterprise of a foreign businessman situated in the Slovak republic in the Companies Register of the Slovak Republic. Such principal place of business in case of international sale of goods can be a place where the goods were dispatched to the buyer.

- with respect to natural persons – entrepreneurs in art. 59 of the Regulation:

• the court shall apply its own internal law when determining the notion domicile, taking into consideration the constant Slovak jurisprudence it means that a Slovak court will refer to a place of permanent residence, as it is registered by municipalities or the Police:

- with respect to citizens of the Slovak Republic under act no. 253/1998 Coll. on notice of residence of citizens of the Slovak Republic and on the register of inhabitants of the Slovak Republic

- with respect to foreigners with permanent residence in the Slovak Republic under act no. 48/2002 Coll. on residence of foreigners

b) under art. 5 part 1 of the Regulation if the place of performance of the obligation in question is in the Slovak Republic – in case of contracts of sale this generally means the place where buyer is supposed to hand over the goods (also in case where no handing over was actually performed due to the breach of contract)

c) under art. 23 of the Regulation if the parties to the contract have agreed in any form which accords to practices established between the parties or generally in international trade, that courts of the Slovak Republic are to have jurisdiction. Such jurisdiction established by an agreement is exclusive which means that if it is established, the criterions prescribed in a) and b) cannot be applied

d) under art. 24 of the Regulation also in case the jurisdiction is not established under any of requirements prescribed in a), b) or c) and the defendant enters an appearance and does not contest the jurisdiction in its first act in the proceedings

Jurisdiction of courts of arbitration

Parties to the contract can establish jurisdiction of the particular court of arbitration to settle their disputes by making an agreement which must be written and can be made in these forms:

• arbitration clause – a clause incorporated in international contract of sale by which the contractual parties choose the court of arbitration to settle the disputes emerging from this contract
• arbitration agreement – a separate contract concluded by parties to the international sales contract establishing the jurisdiction of the court of arbitration to settle some or all disputes emerged between these parties
• a special form of establishing jurisdiction of a court of arbitration is a declaration made by the parties to the dispute before the arbitrator recorded in minutes to establish such jurisdiction made at latest at the beginning of the arbitral procedure

Arbitral proceedings conducted at the territory of the Slovak Republic is governed by act no. 244/2002 Coll. on arbitral proceedings.

Competence of the Slovak court

If the jurisdiction of the Slovak courts to settle disputes from the international contract of sale is established, one has to determine which particular court from the Slovak court system is competent to settle the particular dispute. Its determination will be based on territorial and substantial criterion.

a) Substantial Competence

According to sec. 9 part 1 of act no. 99/1963 Coll. Civil Procedure Code (hereinafter referred to as “CPC”), generally a district court is competent to settle majority of disputes including disputes emerged from international sale of goods.

It is worth mentioning that in period from 1 January 1992 to 31 December 2004 regional courts were with reference to sec. 9 part 3 CPC amended by act. no. 519/1991 Coll. competent to settle disputes from international trade and therefore nowadays there can still be judicial proceedings pending at these courts which were initiated in the abovementioned period of time.

b) Territorial Competence

Territorial competence determines which of the 54 district courts is competent to settle a concrete dispute. The district court will have territorial competence if the defendant has in this court’s district his:

• registered office in case of legal entities and place of business in case of  natural persons – entrepreneurs under sec. 85 part 4 CPC
• habitual residence or last habitual residence in case the defendant has no place of business under sec. 85 part 4 and 86 part 1 CPC
• property, if the territorial competence cannot be established any any of the criterions prescribed in sec. 86 part 2 CPC
• business representation or a body competent to arrange business affairs for the foreign legal entity, if this foreign entity is a defendant in the proceedings as prescribed in sec. 86 part 3 CPC
• if in this district occurred a situation from which emerges a claim for damages under art. 74 et seq. CISG as it is prescribed in sec. 87 b) CPC

For determination of territorial competence of a district court by typing address of one of the abovementioned criterions click here (only in Slovak language).

Forms of judicial proceedings applicable when asserting claims under CISG

CPC prescribes several forms of judicial proceedings which can be relevant for asserting claims from CISG as they are categorized here according to the form of their final decisions:

• Order For Payment – it is a simplified form of proceedings where the court bounds the defendant to pay a sum specified in the action, if the plaintiff proves without doubts his right by specifying the factual circumstances from which it occurred and submits proper evidence, mostly in form of documents. It is essential that such obligation must consist of a pecuniary duty, which can be also demanded in a foreign currency (e.g. a duty to pay purchase price. An order for payment can be issued only if the address of the defendant is noted and if it is in Slovakia. This means that the order for payment cannot be served to the defendant abroad (this condition is not relevant in case of a plaintiff).  The court will issue the order for payment solely upon arguments presented by plaintiff in his action, without court proceedings and without asking for an opinion of defendant. The issued order for payment must be served to the defendant by a personal service and no other form of serving is admissible. If the order cannot be served to the defendant in this matter, the order for payment will be cancelled by the court which issued it and court proceedings will be ordered (which will end by a judgement, as described afterwards).  The court will also cancel the order and order court proceedings if the defendant files a protest against the order within fifteen days after its receipt.
  
  
• European Order For Payment – it is a new, simplified form of proceedings established by Regulation no. 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure. It is an analogous procedure to the abovementioned Order for payment, but it allows the order to be served abroad – within the territory of the European Union. It should promote enforcement of uncontested claims emerging from the trade in the common European market. The Regulation establishes an analogous procedure of issuing the order as in case of the Slovak one, but the period for filing a protest is 30 days. The issued European order for payment is directly enforceable in any of the EU member states by a procedure prescribed in Brussels I. Regulation. The regulation creating a European order for payment is in force from 12 December 2008.
  
  
• Order For Performance – it is a simplified for of proceedings analogous to the procedure on order for payment but as opposed to this procedure, it enforces the claims for non-pecuniary performance (e.g. obligation of a seller to deliver goods under a contract of sale).  It is analogous to the abovementioned order in requirement of an uncontested claim, residence of the defendant in Slovakia and serving of the order to the defendant by a personal service. Procedure for cancelling the order and court proceedings subsequent to this cancelling are also analogous.
  
  
• Judgement – it is a classic form of court decision by which the court can decide about any claim emerged from international sale of goods. As in case of simplified forms of proceedings, the proceedings begin with filing of an action with a court. Plaintiff is obliged to identify the defendant, describe factual circumstances, adduce evidence to prove its claim and write the petition – the judgement he wants the court to issue. The court subsequently serves the defendant with the action and asks him to give statement to the action. The court usually orders hearing of the parties to the dispute and witnesses determined by the parties. In order to qualify technical matters, the court can ask expert witness to provide expertise. Generally, court can take into consideration any means of evidence that allow to establish the facts relevant to the case. When the court finds the factual circumstances to be ascertained without reasonable doubts, it issues judgement which is either granting the right as prescribed in the action (or granting its part) or dismissing the action.

Remedies

In moment when the judgement of court of first instance (district court with territorial competence) is served to parties to the dispute, they have period of 15 days to file an appeal against the judgement reasoned by one of the reasons prescribed in sec. 205 part 2 CPC. If none of the parties files an appeal, the judgement comes into force, i.e. rights and obligations emerge from the judgement.

The appellate court (court competent to try appeals against judgements issued by district courts) is a regional court in which circuit the court of the first instance is located. An appellate court generally examines the procedure performed by the court of first instance and it does not gather more evidence. The appellate court can either:

·        uphold the judgement if it is substantively correct

·        change the judgement, i. e. decide about the dispute in a different way than the court of the first instance did, in case it is not possible to decide about the appeal in a different way

·        set aside the judgement and return the case to the court of the first instance for further proceedings if there is a reason prescribed in sec. 221 CPC

By serving the judgement of the appellate court (in case of upholding or changing the judgement) to the parties to the dispute, the judgement comes into force and the parties are bound by its decision and are obliged to fulfil it.

A final judgement can be under special circumstances challenged by an extraordinary remedy – new trial (sec. 228 et seq. CPC) appeal on points of law (sec. 236 et seq. CPC) or extraordinary appeal on points of law (sec. 243e et seq. OSP).

Execution of a judgement

In case any of the abovementioned decisions comes into force and the parties did not perform their obligations in the period prescribed in the judgement, the person rightful under the judgement can file a motion for execution of the judgement, i.e. a forced fulfilment of the obligation prescribed by the judgement via a court distrainer. The same procedure can be followed in case of foreign judgements provided that they were:

·        declared enforceable in Slovakia under art. 38 et seq. of the Brussels I. Regulation

·        recognized and declared enforceable in Slovakia under sec. 63 et seq. of act no. 97/1963 Coll. on international private and procedural law as amended

A court distrainer proceeds in execution in accordance with act no. 233/1995 Coll. on court distrainers and execution proceedings (Exuction Proceedings Code) as amended.

This section was created in cooperation with the Law Firm of JUDr. Pavol Gracik in Nitra