Nejvyšší soud ČR; 2020-05-27; 29 Cdo 3306/2018
Decision by national courts in the field of European Union law — ECLI:CZ:NS:2020:29.CDO.3306.2018.1
Date: 2020-05-27
Subject matter: Judicial cooperation in civil matters
Origin: Czechia

82020CZ0527(51)_ENG_SUMJURE
JURE summary
JURE summary
This case regards a payment of EUR 16,521,935 from a promissory note. The defendant was a Luxembourgish company. The promissory note was signed by it ‘per aval’.
The Krajský soud v Plzni (hereinafter ‘the Court of First Instance’) issued a judicial order based on the promissory note and declared an obligation of the defendant to pay the plaintiff’s claim fully. The defendant objected, claiming a lack of jurisdiction of the Czech courts. He invoked clause of the framework agreement which was entered into by both parties before signing the promissory note, which designates the international jurisdiction of the English courts. The Court of First Instance declined the arguments of the defendant and stated that the Czech courts have international jurisdiction and continued in the proceedings.
The defendant appealed the decision. The Vrchní soud v Praze (hereinafter ‘the Court of Appeal’) declined this appeal. It analysed the framework agreement and agreed that the framework contract applied on previous promissory notes, but not on the one that was the subject of this proceeding, as this promissory note was issued after the signing of a contract of restructuralisation. The defendant was not a party to this contract, it only signed the promissory note per aval. The restructuralisation contract designated the international jurisdiction of the Czech courts. The Court of Appeal applied Article 7(1)(a) of the Brussels I Regulation (recast) (1) according to which ‘a person domiciled in a Member State may be sued in another Member State in matters relating to a contract, in the courts for the place of performance of the obligation in question’. It also quoted the Case C-419/11 (2) of the Court of Justice of the European Union, according to which the regulation ‘applies for the purposes of determining the court having jurisdiction over judicial proceedings by which the payee of a promissory note, established in one Member State, brings claims under that note, (…) against the giver of the aval, domiciled in another Member State’. The promissory note should have been paid in Plzeň in the Czech Republic. The Court of Appeal also mentioned that the same result would be concluded based on Articles 3 and 4 of the Convention Providing a Uniform Law For Bills of Exchange and Promissory Notes (Geneva, 1930), according to which the language of the text the promissory note is written in is relevant for determining the applicable law and jurisdiction.
The defendant filled a cassation to the Nejvyšší soud (hereinafter ‘the Supreme Court’). It argued that the framework agreement applies also to the promissory note in question, argued the invalidity of the contract on restructuralisation and then also the fact that it was not a party to his contract. The Supreme Court again quoted the Case C-419/11 and found the argumentation of the Court of Appeal correct. It refused all three arguments brought up by the defendant. The promissory note was signed by the defendant ‘per aval’ and by this action, the defendant freely accepted the obligation. It is clear that this promissory note was issued based on the contract of restructuralization, not the framework agreement. The fact that the defendant was not a party to this contract has relevance only to the extent that the provision on the international jurisdiction of the courts is not applicable to it. In other words – the international jurisdiction of the Czech courts is not based on Article 25 of the Brussels I Regulation (recast), even though for the other parties of the contract it would have been.
The Supreme Court concluded that the jurisdiction of the Czech courts is based on Article 7(1)(a) of the Brussels I Regulation (recast) and dismissed the case.
(1) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
(2) Judgment of the Court of Justice of 14 March 2013, Česká spořitelna, a.s. v Gerald Feichter, C-419/11, ECLI:EU:C:2013:165, paragraph 24.