The Supreme Court of the Czech Republic (NS CR) finally decided the hitherto unresolved question that may arise in case of issuance of a qualified call along with a judicial payment order in the judgment under ref.no. 23 Cdo 4311/2011. It is a relatively frequent phenomenon that courts issue payment orders with the so called “qualified call” in case of asserting of several claims in an action, e.g. a debt and a contractual penalty. Qualified call represents something like a grenade with the pin pulled in the hands of a defendant – unless he expresses within a time limit why he denies the claim, legal fiction of recognition occurs by law and a court issues a judgment of recognition because it assumes that the defendant admits the claim against him. It is nearly impossible to defend oneself against such judgment and the appeal court-review thereof is very limited.

Let us leave aside theoretical questions of intervention in the right of disposition of the parties, which fiction of recognition undoubtedly represents, and let us devote to judicial practice. By issuing a payment order, courts also satisfy petitions, in which there are also asserted – as is the case in business disputes – several claims. Typically, it is a debt and a contractual penalty. Courts, however, agree with claims – often mistakenly – to contractual penalties which are erroneously claimed as interest on late payment, i.e. by a percentage from the required debt. Constant practice of the courts, however, has required for a long time – as with other financial claims – expression with a fixed amount.

In the given case, the court issued a payment order with two asserted claims, i.e. with claims to a debt and a contractual penalty, and the contractual penalty was expressed in the action just by a percentage. As a time limit elapsed without any expression and the defendant only filed a blanket protest, the court decided on both claims by judgment of recognition.

The appellate court cancelled a part of judgment on the basis of an appeal of the defendant, namely in the part of the contractual penalty and it confirmed the very claim to the principal sum. It was indifferent to the legal rule of s. 172 subsec. 1 of the Civil Procedure Code which stipulates that a payment order may be issued only if all asserted claims arise from an action.

The Supreme Court dealt with the hitherto unresolved question whether conditions for issuance of a qualified call are at the same time conditions for issuance of a payment order if a court issues a call with a payment order, i.e. if unlawfulness of issuance of a payment order also applies to the call itself.

The Supreme Court concluded that conditions for issuance of a qualified call along with the payment order are the same as conditions for issuance of the payment order. If the payment order orders to pay an erroneously asserted claim to a contractual penalty (or any other unenforceable claim), the court may not issue the qualified call and thus there cannot even occur fiction of recognition with respect to any of the claims. So it is not possible to issue a judgment of recognition for all or just some claims, even though they would be asserted correctly.

Thus, the Supreme Court did not permit interpretation loosening of a rule for issuance of a payment order (provision of s. 172/1 o.s.ř. (Civil Procedure Code), and it consistently asserted a principle of legality of a procedure of a court which prevents wilful decision-making. “All or nothing” principle applies here in a certain sense, there are either fulfilled conditions for issuance of a payment order with all the claims with independent facts asserted by an action, or the payment order or qualified call on the basis of the payment order cannot be issued.

In future, judgment of the Supreme Court of the CR could serve as a supporting document for considerations of individual courts of first instance in the sense whether – particularly in cases of assertion of more plaintiff’s claims – not to avoid automatic issuance of a payment order the issuance of which – without a due review of conditions pursuant to s. 172/1 o.s.ř. constitutes both violation of the constitutional principle of legal exercise of the course of law/administration, and violation of a number of principles of a civil procedure.

Instead of a now plentifully asserted procedure, it seems to be more appropriate in the light of the Judgment to have a think about an action with a motion to issue a payment order right at the beginning of a dispute from the viewpoint of the provision of s. 172 o.s.ř., and possibly to issue a qualified call with regard to the character of the matter and circumstances of the case.