Nejvyšší soud České republiky; 2016-01-28; 29 Cdo 452/2014
Decision by national courts in the field of European Union law — ECLI:CZ:NS:2016:29.CDO.452.2014.1
Date: 2016-01-28
Subject matter: Judicial cooperation in civil matters
Origin: Czechia

82016CZ0128(51)_ENG_SUMJURE
JURE summary
JURE summary
This case regards a dispute brought by a Czech citizen T.Ch. (hereinafter “the plaintiff”) against the company CENTRO HOLDINGS (hereinafter “the defendant”), with its registered office in Dominica, to assert proprietary rights in shares issued by the Czech company HOTEL PRAHA.
The Court of First Instance terminated the proceedings, declaring the lack of jurisdiction of the Czech courts. According to its reasoning, the mere fact that the issuing company is registered in the Czech Republic is not sufficient to establish the jurisdiction of the Czech courts. The subject of the dispute can only be the proprietary rights in shares, not the proprietary rights to the company itself. If it cannot be proven that shares issued by the company and possessed by the defendant are situated within the area of jurisdiction of the court and if the defendant does not have any other property in that area, the jurisdiction of the Czech courts (pursuant to § 86 of the OSŘ (1) requiring the existence of the property) could not be established.
The defendant appealed this decision, but the Court of Appeal upheld the decision and agreed with all of the legal conclusions of the lower court.
The defendant filed a cassation appeal to the Nejvyšší soud (hereinafter “the Supreme Court”) arguing that the jurisdiction of Czech courts is sufficiently established pursuant to ZMPS (2) and OSŘ, because the ownership of the shares include the right of shareholder to participate in company governance, and the right to a share in profits and these rights are closely linked to the issuing company. The defendant cited the previous opinion of the Supreme Court in a different matter, according to which the ownership of business shares is property in the sense of § 86 of the OSŘ.
The Supreme Court noted that, under its interpretation of Article 3 of the Brussels I Regulation (3), the rules of national jurisdiction set out in the ZMPS and OSŘ shall be applicable, as the defendant does not have a domicile in a Member State. There is no doubt that the plaintiff holds his proprietary rights in the sense of § 86 of the OSŘ and that the ownership of securities falls under the definition of property provided therein. The share is a declaratory security connected to the rights of the shareholder to participate in company governance. The Supreme Court considers, for the purposes of determining jurisdiction, that the ownership of shares must be regarded as ownership of property. The reasoning of the lower courts was therefore incorrect.
According to the Supreme Court, this dispute did not involve exclusive jurisdiction as set out in Article 22 of the Brussels I Regulation. Therefore, the lower courts erred when they assessed the jurisdiction before the action was delivered to the defendant, which made it impossible to him to raise objections against the jurisdiction in accordance with Article 24. The lower courts, by omitting to notify the defendant of this action, rendered the proceedings defective, leading to their incorrect decisions.
Therefore, the Supreme Court dismissed both the decisions of Court of First Instance and Court of Appeal and referred the case back to the Court of First Instance for new proceedings.
(1) Zákon č. 99/1963 Sb. Občanský soudní řád (Code of civil procedure).
(2) Zákon č. 97/1963 Sb. o mezinárodním právu soukromém a procesním (Act on international private and procedural law).
(3) Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.