In connection with the recodification of substantive civil law, in particular by Act No. 89/2012 Coll., the New Civil Code (hereinafter “NCC“), there has also been an amendment of the civil procedure code.

Due to fundamental differences between contentious and non-contentious proceedings, which were jointly governed by Act No. 99/1963 Coll., the Civil Procedure Code (hereinafter “CPC”) until 31 December 2013, civil court proceedings were divided into two separate laws as part of efforts to clarify legal regulations. The CPC continues to govern all contentious court proceedings, while non-contentious proceedings are newly regulated by Act No. 292/2013 Coll., on special court proceedings (hereinafter “ASCP”).

Contentious and non-contentious proceedings

The difference between contentious and non-contentious proceedings is evident from their purpose. While the purpose of contentious proceedings is primarily to protect violated or endangered rights, non-contentious proceedings govern the relations of parties in the future, which is also reflected in the parties to these proceedings. In contentious proceedings, there is the plaintiff on one side, who brings an action against the defendant on the other; in non-contentious proceedings, there is usually only the petitioner, and perhaps another party, whose rights are being decided in proceedings.

The difference can also be seen in the manner in which proceedings are initiated. Contentious proceedings are always initiated on the basis of an action (suit) filed by one of the parties, while the court can initiate non-contentious proceedings ex officio, even if a petition is not filed.

There are also differences in the presentation of evidence, where in contentious proceedings the court almost exclusively examines evidence put forward by the parties to proceedings, while in non-contentious proceedings, the court may also examine evidence gathered through its own investigative activities. In contentious proceedings, the principle of concentration is applied, which means decisive facts and designated evidence to support these facts can only be presented until the end of preparatory proceedings or the first hearing in the case, respectively the time given by the court to supplement arguments or evidence. The court will not take arguments or evidence proposed after the concentration of proceedings into account. In contrast, arguments and evidence can be presented in non-contentious proceedings throughout these proceedings.

The ASCP includes a complete list of non-contentious and other special proceedings governed by the ASCP (e.g. probate proceedings, divorce, adoption, sui juris, proceedings on status matters of legal entities or capital market-related matters), and their special treatment compared to contentious proceedings. All proceedings that are not specifically addressed in the ASCP will be governed by the provisions of the CPC on contentious proceedings.

Disputes within corporations – one major change

All non-contentious proceedings have therefore moved from the CPC under the ASCP, with the exception of matters relating to the Commercial Register, which are governed by the Act on Public Registers effective from 1 January 2014, and proceedings in disputes between companies, their founders, partners and members or between partners and members themselves, which remain governed by the CPC. Proceedings in these matters, which were non-contentious proceedings prior to the ASCP coming into effect, and were thus subject to the principles of non-contentious proceedings described above, have now become contentious proceedings with all the consequences this entails. In these proceedings (e.g. proceedings for the cancellation of a member’s participation in a company), the court will decide solely on the basis of evidence presented by the parties prior to the concentration of proceedings, and it will be unable to examine evidence not presented by the parties and obtained through its own activities, or evidence presented after the concentration of proceedings. This significantly changes proceedings in the matter of disputes between companies and their founders, partners and members, or between partners and members themselves.

There have been no major substantive changes in devolved proceedings, with the exception of probate proceedings, which have been adapted to comply with the substantive regulation of inheritance under the NCC.

New non-contentious proceedings

The ASCP also introduces new proceedings that were either not known under the CPC, or which were not specifically regulated. This concerns the following proceedings:

• Proceedings in the matter of trust funds – in view of the fact that trust funds do not have legal subjectivity, the ASCP regulates the parties to proceedings and local jurisdiction of the court 

• Proceedings in matters of marital and partnership status – the ASCP governs proceedings on whether a marriage exists or not (putative marriage), proceedings on the invalidity of marriage and divorce proceedings. Regulations governing marital matters apply similarly to partnership matters. The CPC mentioned these proceedings in a number of places, but did not include their specific regulation 

• Proceedings to determine or contest parentage – regulations governing these proceedings cover both the determination of paternity by affirmative declaration of both parents, which was previously also covered by the CPC, and proceedings to determine or contest paternity, which were known to the CPC, but were not specifically regulated, and proceedings to determine or contest maternity 

• Proceedings on certain support measures – the NCC introduces the institutes of preliminary declaration, assistance in decision-making and representation by a member of the household, which may require the intervention of the court 

• Proceedings to declare a person missing – the NCC introduces the institute of missing and the declaration of a person as missing; the ASCP therefore includes the corresponding procedure rules 

• Proceedings for consent to intervene in integrity – the NCC regulates the right to mental and physical integrity and intervention in this integrity 

Important proceedings in terms of business

The ASCP therefore adopts the previous regulations of the CPC, which it supplements and amends to comply with the NCC. The following are the most important proceedings governed by the ASCP in business practice:

• Proceedings on status matters of legal entities – the ASCP regulates proceedings on the dissolution and liquidation of legal entities, the appointment and dismissal of members of their bodies or receivers, transformations and questions of public benefit status. The ASCP also regulates proceedings on the appointment of experts, proceedings in matters of legal entities that can be initiated without a petition, and proceedings in matters of custodianship of legal entities 

• Proceedings on custody services – judicial custody services are primarily used by debtors for reasons instigated by the creditor (refusal to cooperate, the absence of the creditor, or uncertainty of the person of creditor). In such a case, the debtor discharges its debt by depositing funds, securities or other movable assets into the court’s custody 

• Proceedings on the judicial sale of collateral – the judicial sale of collateral can have an impact on both the creditor whose claim was secured by the lien, and the debtor that provided the collateral 

• Proceedings to prohibit exercising rights associated with participating securities – this is particularly used in the case of so-called “squeeze-outs” of minority shareholders. In the case of a squeeze-out, former shareholders are entitled to compensation from the main shareholder, who is obliged to deposit compensation for squeezed out shareholders into mandatory custody. If it fails to do so in full, the court may issue a ban prohibiting it from exercising its rights associated with participating securities. 

Conclusion

As part of the clarification of legal regulations, legislators divided the existing CPC into two separate laws. Whether this change was necessary and whether it will actually help the general public orient itself in the legal system is disputable. From a practical perspective, however, the ASCP brings few changes to previous legislation, the most important of which we have summarised for you in this article.

For more information, please contact our office’s partner, Mgr. Jiří Kučera, e-mail: jkucera@kuceralegal.cz ; tel.: +420604242241.