Czech lower courts' decisions

Referring court:       District Court in Český Krumlov (1st instance, civil)
Area of law:              employment, social policy
ECJ formation:        3 judges, JR Schintgen
AG’s opinion:           no

Mr Vorel was employed as a doctor by the Hospital in Český Krumlov on the basis of a permanent contract. During the period from 1 May to 31 October 2004, the Hospital required him to perform on-call duty at his workplace. It paid him a remuneration corresponding to that specifically provided for by the national legislation on on-call duty.

Mr Vorel challenged the basis on which that remuneration was calculated before the District Court. In particular, he claimed that he should be remunerated for the on-call duty as if it was a normal performance of work. Thus, he claimed the supplement to his salary of CZK 29.151,- plus interest, representing the difference between the “traditional” and “lowered” renumerations. Mr Vorel referred to the Case C‑151/02 Jaeger in which the ECJ concluded that all of the period of on-call duty performed by a doctor under a system where he is expected to be physically present in the hospital constitutes working time within the meaning of Directives 93/104 and 2003/88, even though the party concerned is authorised to rest at his workplace during the period that his services are not called upon.

As a result, the District Court decided to ask the ECJ whether from the point of view of conformity with Directive 93/104 and the judgment Jaeger, is a doctor’s waiting for work when on call at his place of work in the hospital to be regarded as the performance of work.

A. reference (28/11/2005)

The Court of Justice decided the case by means of a reasoned order under Article 104(3) of the Rules of Procedure, holding that the answer to the question referred could be clearly deduced from the existing case-law. Referring in particular to Case C‑10/04 Dellas and Others [2005], the Court held that, where a doctor is on call at his place of work, the time spent waiting for the actual work to be carried out must be treated as working time and, where appropriate, as overtime within the meaning of Directives 93/104 and 2003/88, in order to ensure compliance with all the minimum requirements laid down by those directives. However, the Court also pointed out that the rules laid down in those Directives do not generally apply to the remuneration of workers. Accordingly, those directives do not preclude a Member State from applying legislation on the remuneration of workers and on-call duties which distinguishes between the treatment of periods during which work is actually carried out and periods during which no work is actually carried out. This is the case provided that such legislation guarantees the practical effect of the rights conferred on workers by those directives in order to ensure the effective protection of their health and safety.

B. ECJ's answer (11/1/2007) 

Following the reasoning of the ECJ without further reservations, the District Court rejected the claim of Mr Vorel. In particular, it concluded that even though the on-call duty performance must be regarded as “working time” within the meaning of the Directives in question, Mr Vorel could have been remunerated according to the specific national rules stipulated in the Labour Code and implementing legal acts.

Even though Mr Vorel appealed against the judgement of the District Court (claiming that the District Court misinterpreted the ECJ's answer), the Regional Court in České Budějovice upheld the ruling on appeal. Realistically, it did not add any substantive arguments to the reasoning of the District Court.

C. follow-up (21/5/2007)

Referring court:       District Court in Prague 3 (1st instance, civil)
Area of law:              telecom
ECJ formation:        5 judges, JR Kūris
AG’s opinion:           Ruiz-Jarabo Colomer, 27/02/2007

The parties to the main proceedings were telecommunications providers that concluded an agreement on the interconnection of their public landline telecommunications networks. The defendant, having decided to provide high-speed broadband Internet access to its clients, approached the applicant, who had a significant share on the telecommunications market at that time, with a proposal for an amendment to their contract, requesting that the two telecommunications networks be newly interconnected also for the purpose of providing the broadband Internet access. However, the applicant merely offered to provide access to its own network infrastructure, even though it was obliged, under Czech law, to offer the defendant a network interconnection. The defendant turned to the Czech Telecommunications Office (‘CTO’), which eventually ordered the parties to conclude an amendment to the existing interconnection contract with respect to the broadband Internet service.

The applicant lodged a claim with the District Court in Prague 3, a first-instance civil court, seeking a declaration that the parties had not been obliged to comply with the conditions for the provision of broadband Internet access service stipulated by the interconnection agreement, as amended by the decision of the CTO. In particular, it argued that the decision of the CTO was contrary to Community law.

The referring court decided to stay the proceedings and to ask the Court of Justice whether the CTO had the power to impose on a telecommunications company with significant market power in the telecommunications market an obligation to conclude a contract for the interconnection of its networks with those of another operator. If the answer to the principal question was alternative, the referring court also asked whether the CTO was obliged to conduct a prior market analysis under the conditions set out by Access Directive and the Framework Directive; whether the fact that the administrative proceedings were initiated before the date of the accession of the Czech Republic to the European Communities had impact on the application of the abovementioned directives; and – in the circumstances where the Czech Republic had not adequately implemented the said directives – whether the applicant could have relied on the direct effect of these directives.

A. reference (24/11/2005)

The Court of Justice held that the CTO had been entitled to impose an obligation to conclude a contract for the interconnection of one provider’s networks with that of another provider, albeit on the grounds of Directive 97/33, to which the transitional provisions of the Access Directive and the Framework Directive referred.

B. ECJ's answer (14/6/2007)

Following the judgment of the Court of Justice, the referring court, however, dismissed the applicant’s action on the grounds that it did not have jurisdiction to hear the case. More specifically, the referring court held that under a newly established case law of the Czech Supreme Administrative Court, the applicant should have brought the action against the decision of the CTO before an administrative – and thereby not a civil – court.

C. follow-up (9/8/2007)

Referring court:       Regional Court in Ostrava (1st instance, admin)
Area of law:              excise duties
ECJ formation:        Grand Chamber, JR Bonichot
AG’s opinion:           AG Kokott, 18/09/2007

Skoma-Lux was an importer of wine and wine-merchant. On 30 September 2004, the Olomouc Customs Office fined it for infringing the customs legislation, which it is alleged to have done repeatedly between March and May 2004. Skoma-Lux was accused of having committed a customs offence by submitting incorrect information concerning the customs classification of Kagor VK red wine. Not only it infringed certain provisions of the Law on customs, in the version in force prior to the accession of the Czech Republic to the Union, but also it committed a customs offence by failing to comply with Regulation No 2454/93. Skoma-Lux challenged that decision at the Krajský soud v Ostravě (Regional Court) on the ground that the customs directorate could not enforce against it Community legislation which had not yet been published in the Czech language in the Official Journal of the European Union. The Regional Court referred the three following questions to the ECJ.

By its first question, the Regional Court asked whether Article 58 of the Act concerning the conditions of accession allowed domestic authorities to enforce the provisions of a Community regulation which has not been published in the Official Journal of the European Union in the language of the respective Member State. Some of the Member States submitted observations and along with the Commission argued that the Skoma-Lux was by definition informed of the applicable Community rules because its business is international trade, and it must know the content of the customs requirements. In their view, the Community legislation, although not published, should apply, since it could be proven that the party concerned in fact knew about it. The Court, however, did not follow that line of reasoning. It held that obligations contained in Community legislation which has not been published in the Official Journal of the European Union in the language of a new Member State cannot impose obligations on individuals in that State, even though those persons could have learned of that legislation by other means (internet access in particular). The Court mainly argued that the principle of legal certainty requires that Community legislation must allow those concerned to acquaint themselves with the precise extent of the obligations it imposes upon them, which may be guaranteed only by the proper publication of that legislation in the official language of those to whom it applies. Furthermore, it concluded that it would be contrary to the principle of equal treatment if the same obligations could be imposed in new Member States even though they were published proper only in the old ones.

In the second question, the Regional Court asked whether the unenforceability of a Community regulation not published in the language of a Member State against individuals in that State is a question of the interpretation or of the validity of that regulation. The Court simply held that it is common ground that those provisions do not affect the validity of a regulation applicable in the Member States in which it has been properly published. Consequently, there was no need to rule on the validity of the regulations according to the third question asked by the Regional Court.

Now, it is striking that the Regional Court in fact did not wait for the answer of the ECJ and issued the ruling in the original dispute one week before the ECJ issued its preliminary ruling. The Regional Court did not mention the given preliminary reference in the final ruling at all and it did not even deal with the questions asked. In fact, it applied other provisions of Community Law (Regulation No. 2658/87) and concluded that Skoma-Lux justly categorised the Kagor wine under the nomenclature of “wine”.

Referring court:       Regional Court in Prague (1st instance, civil)
Area of law:              intellectual property
ECJ formation:        order of the President (withdrawal)
AG’s opinion:           no

The applicant in the main proceedings is a professional association of composers, lyricists and musical publishers, whose mission is the collective management of economic copyrights to musical pieces. It lodged a claim against before the Regional Court in Prague (‘referring court’) the defendant, an owner of a hotel in which there were 13 televisions, by which it sought to recover a payment for the use (communication to the public) of copyrighted works. The defendant argued that, under Czech law, the applicant does not have a right to recover a payment for the use of copyrighted works in a private hotel room.

The referring court decided to stay the proceedings and ask the Court of Justice whether an author had a right to remuneration when their work was communicated to the public by an operator of an accommodation establishment on the TV or radio receiver situated in a private part of the accommodation premises and, accordingly, whether the Czech copyright law conflicted with the Copyright Directive.

Following a receipt of the judgment in case C-306/05 SGAE from the Court of Justice, which treated an essentially identical preliminary reference, the referring court withdrew its reference for a preliminary ruling.

Subsequently, the referring court has allowed the claim on the basis of the Copyright Directive and, citing the SGAE judgment, it held that the private nature of hotel rooms did not preclude the communication of a work by means of television sets from constituting communication to the public within the meaning of the Copyright Directive.

The referring court delivered the follow-up judgment the same day the Court of Justice responded to the request for preliminary ruling.

Referring court:       Arbitration Court attached to the Economic Chamber of the Czech Republic and Agricultural Chamber of the Czech Republic
Area of law:              intellectual property
ECJ formation:        order of the President (withdrawal)
AG’s opinion:           no

TBC (A and C not available)

Interesting information: our team is litigating before the Regional Court in Prague, challenging the Arbitration Court's refusal to provide us with the full text of their reference.

Referring court:       Regional Court in Ústí nad Labem (1st instance, admin)
Area of law:              taxation
ECJ formation:        5 judges, JR Makarczyk
AG’s opinion:           AG Trstenjak, 9/12/2008

RLRE Tellmer Property was an owner of rented apartment blocks. In addition to rent, it charged its tenants separately invoiced sums for the cleaning of communal areas by caretakers. RLRE Tellmer Property believed that the letting of apartments and the related services, such as the cleaning of communal areas, were indivisible transactions subject to a single VAT regime. The tax authorities disagreed with this view and concluded that RLRE Tellmer Property had made an excessive deduction of VAT in relation to cleaning costs and therefore increased the VAT owed by the company for the month of May 2006 by CZK 115 911,- in relation to the income from cleaning activities. RLRE Tellmer Property challenged this increase in VAT before the Regional Court.

The Regional Court asked the ECJ whether the costs of cleaning the common areas of an apartment block are exempt from VAT in the same way as letting. It suggested three possible answers to the ECJ: First, since tenants have the possibility of concluding an independent contract with a third party for the cleaning of common areas, this service does not form part of the letting and its exemption serves no purpose. Secondly, to the extent that the exemption of the costs of cleaning those areas has the effect of reducing the charges payable for the accommodation, reasons of a social nature may justify the exemption of those charges. Thirdly, this question may have to be left to the discretion of the Member States.

The ECJ's answer was quite straightforward, as it adopted the first possibility envisaged by the referring court. It held that, for the purposes of applying Article 13B(b) of the Sixth VAT Directive, the letting of immovable property and the cleaning of the common areas thereof, in circumstances such as those at issue in the main proceedings, must be regarded as independent and mutually divisible operations, with the result that the service in question does not fall within the scope of the exemption.

In the follow-up judgment, the Regional Court copy-pasted the crucial parts of the ECJ's judgment and claimed that it had no reason not to follow it. In addition to the ECJ's arguments, it came up with an analogy to national legislation which ought to highlight the separability of the two services.

Referring court:       Disctrict Court in Cheb (1st instance, civil)
Area of law:              judicial cooperation in civil matters
ECJ formation:        5 judges, JR Toader
AG’s opinion:           no

ČPP brought an action against Mr Bilas before the referring court seeking an order for the payment by the latter of the sum of CZK 1 755, plus default interest, as the premium due under an insurance policy. Mr Bilas challenged ČPP’s claim as to its substance without contesting the jurisdiction of the referring court. The District Court observed that it followed from Regulation No 44/2001 that, where its jurisdiction has not been contested, that court cannot conduct an examination as to its own jurisdiction since the dispute does not fall within the situations provided for in Articles 25 and 26 of that regulation. The referring judge argued that if he rules on the substance without examining its jurisdiction, its judgment might not be recognised. The referring court speculated that either it should have the possibility to examine its jurisdiction irrespective of Article 26 of Regulation No 44/2001, or it should be able to apply Article 24 of that regulation to its jurisdiction, even though Article 8 of that regulation does not expressly provide for the possibility to apply that provision.

Even though the District Court posed three questions on the interpretations of the above-mentioned provisions, the ECJ materially answered merely the second question. By that question, the referring court asked whether, even for disputes to which the rules of special jurisdiction provided for by Regulation No 44/2001 apply, such in matters relating to insurance, the entering of an appearance by the defendant, who does not contest the jurisdiction of the court seised, amounts to a tacit prorogation of jurisdiction. The ECJ held clearly: Article 24 of Regulation No 44/2001 must be interpreted as meaning that the court seised, where the rules of special jurisdiction were not complied with, must declare itself to have jurisdiction where the defendant enters an appearance and does not contest that court’s jurisdiction, since entering an appearance in that way amounts to a tacit prorogation of jurisdiction. However, the Court stressed that it is always open to the court seised to ensure, having regard to the objective of the special rules on jurisdiction, which is to offer stronger protection of the party considered to be the weaker party, that the defendant being sued before it in those circumstances is fully aware of the consequences of his agreement to enter an appearance.

In the follow-up case, the District Court stopped the proceedings in merits as ČPP took its action back because Mr Bilas paid the sum of CZK 1 755. As to the payment of default interest, the District Court found that Mr Bilas must pay CZK 450,10 in three days. As to the ECJ’s preliminary ruling, it is striking that the District Court did not mention it at all. Interestingly enough, Mr Bilas challenged the jurisdiction of the District Court (as to the remaining question of interests) in accordance with the ECJ’s preliminary ruling (after it was issued). The District Court, however, rejected this challenge on the procedural basis claiming that Mr Bilas did not challenge along with his first motion (as he is normally supposed to do). Thus, the District Court dubiously found its jurisdiction without giving Mr Bilas to challenge it proper as expected by the ECJ in the preliminary ruling.

Referring court:       Regional Court in Brno (1st instance, admin)
Area of law:              competition
ECJ formation:        Grand Chamber, JR Rosas
AG’s opinion:           AG Kokott, 08/09/2011

TBC (A not available)

Referring court:       District Court in Cheb (1st instance, civil)
Area of law:              judicial cooperation in civil matters
ECJ formation:        5 judges, JR Safjan
AG’s opinion:           AG Trstenjak, 5/7/2010

Hypoteční banka (‘Bank’) brought an action before the referring court by which it sought an order requiring Mr Lindner, a German national, to pay to it the sum of CZK 4 383 584.60, plus default interest, by way of arrears on the mortgage loan which was granted to Mr Lindner. In the original contract, the parties agreed that the local court of the shall have jurisdiction. As Mr Lindner was not staying at any of the addresses known to the referring court and given that that court was unable to establish any other place of residence for the defendant in the Czech Republic, that court, assigned guardian ad litem to the defendant, who was considered to be a person whose domicile was unknown. The guardian then challenged the claim put forward by Hypoteční banka relating to interest. The District Court put forward four questions relating to the Regulation No. 44/2001.

By its first question, the District Court asked whether the conditions for application of the regulation are met in the case where one of the parties is a national of a Member State other than that in which those proceedings are taking place. The ECJ was clear enough about its answer: Where the defendant is a foreign national and has no known place of domicile in the State of the court seised, the rules of jurisdiction laid down by Regulation No 44/2001 may be applicable.

By its second question, the referring court asked whether Regulation No 44/2001 must be interpreted as precluding a provision of national law of a Member State which enables proceedings to be brought against persons whose domicile is unknown. The ECJ concluded that where proceedings against a consumer are brought before a national court, that court must, first of all, determine whether the defendant is domiciled in the Member State of that court by applying. Where the national court, on the one hand, is still unable to identify the place of domicile of the consumer and, on the other hand, also has no firm evidence to support the conclusion that the defendant is in fact domiciled outside the European Union, it is necessary to examine whether the rule on jurisdiction of the courts of the Member State in which the consumer is domiciled also covers the consumer’s last known domicile. According to the ECJ, in a situation in which a consumer who is a party to a long-term mortgage loan contract, which includes an obligation to inform the other party to the contract of any change of address, renounces his domicile before the proceedings against him for breach of his contractual obligations are brought, the courts of the Member State in which the consumer has his last known domicile have jurisdiction to deal with those proceedings in the case where they have been unable to determine the defendant’s current domicile. The court having jurisdiction pursuant to that regulation may reasonably continue proceedings, in the case where it has not been established that the defendant has been enabled to receive the document instituting the proceedings, only if all necessary steps have been taken to ensure that the defendant can defend his interests. Consequently, the remaining two questions were irrelevant.

In the follow-up case, the District Court pointed out the ECJ’s conclusions stipulated in the preliminary ruling, and it held that it had jurisdiction pursuant to the Regulation. It then decided the case on the merits.

Referring court:       Municipal Court in Prague (1st instance, civil)
Area of law:              judicial cooperation in civil matters
ECJ formation:        5 judges, JR Ilešič
AG’s opinion:           AG Sharpston, 10/8/2011

The Czech company Feichter issued a blank promissory note in favour of Česká spořitelna. The promissory note, signed on behalf of the Feichter company by its managing director, Mr Feichter, was issued in order to guarantee that company’s obligations under an overdraft agreement, concluded between that company and Česká spořitelna on the same date. Mr Feichter, having his domicile in Austria, also signed, as an individual, the promissory note on its face, marking it ‘per aval’. The note, presented at the due date at the place of payment in Prague was not paid. Consequently, Česká spořitelna brought proceedings for the making of a payment order before the Municipal Court in order to obtain, from Mr Feichter, payment of the sum of CZK 5 000 000 for which the note was made out, plus interest. Mr Feichter challenged the claim and argued that, given that he is resident in Austria, the Municipal Court does not have jurisdiction to adjudicate on the case. The aval of a natural person, given on a promissory note issued in order to guarantee the obligations of a commercial company, cannot be regarded as having been given outside and independently of any trade or professional activity or purpose while that individual has close professional links with that company, such as being its managing director or majority shareholder.

By its first question, the Municipal Court asked whether Article 15(1) of Regulation No 44/2001 applied 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, which was incomplete at the date of its signature and was subsequently completed by the payee, against the giver of the aval, domiciled in another Member State. The ECJ in turn concluded thata natural person with close professional links to a company, such as its managing director or majority shareholder, cannot be considered to be a consumer within the meaning of the Regulation when he gives an aval on a promissory note issued in order to guarantee the obligations of the company under a contract for the grant of credit.

By the second question, the referring court asked whether Article 5(1)(a) of Regulation No 44/2001 applied for the purposes of determining the court with jurisdiction over judicial proceedings by which the payee of a promissory note, established in one Member State, brings claims under that note, which was incomplete at the date of its signature and was subsequently completed by the payee, against the giver of the aval, domiciled in another Member State. The ECJ first concluded that the legal relationship between the payee of a promissory note, and the giver of an aval thereon falls within the concept of ‘matters relating to a contract’, within the meaning of that Article. Secondly, the Court held that the referring court is required, in so far as the applicable law permits that choice as to place of performance of the obligation, to take into account that place in order to determine the court having jurisdiction.

Taking into account the answers, the Municipal Court rejected the jurisdictional challenge in the follow-up case, and it decided the case on merits. It did not engage actively with the ECJ’s reasoning.

Referring court:       High Court in Prague (2nd instance, criminal)
Area of law:              judicial cooperation in criminal matters
ECJ formation:        Grand Chamber, JR Toader
AG’s opinion:           AG Sharpston, 7/2/2012

Mr Baláž, a resident of the Czech Republic, committed a road traffic offence when driving a truck in Austria. An Austrian administrative authority imposed a fine of EUR 220 on Mr Baláž or, in default, 60 hours imprisonment.

Referring court:       Municipal Court in Prague (1st instance, admin)
Area of law:              employment, social policy, social security
ECJ formation:        5 judges, JR Juhász
AG’s opinion:           AG Cruz Villalón, 27/06/2013

[Marek]

Referring court:       Regional Court in Plzeň (1st instance, civil)
Area of law:              intellectual property
ECJ formation:        5 judges, JR Prechal
AG’s opinion:           AG Sharpston, 14/11/2013

The applicant in the main proceedings is a professional association of composers, lyricists and musical publishers, whose mission is the collective management of economic copyrights to musical pieces. It has lodged a claim before the Regional Court in Pilsen (‘referring court’) against the defendant, a private thermal spa hotels operator, by which it sought to recover a payment for the use (communication to the public) of copyrighted works via television and radio devices located in the defendant’s hotel rooms, without concluding a licence agreement with the applicant.

The defendant moved for dismissal of the action, arguing that the copyrighted works could not have been ‘communicated to the public’ within the meaning of the Copyright Directive. In particular, it claimed that its guests were patients receiving spa treatment who have stayed in its facilities for a longer period than guests usually stay in regular hotel rooms and that, as a facility providing health care, it was covered by the exception provided by Czech law under which making available of a work to patients in the course of providing health care could not be regarded as ‘broadcasting’.

The applicant acknowledged such exception but maintained that it was contrary to the Copyright Directive.

Furthermore, the defendant argued that, by claiming higher royalties than collective administrators in neighbouring countries, the applicant was abusing its monopoly position, worsening the defendant’s market position and weakening its competitiveness with spa establishments in neighbouring countries and thereby restricting its freedom to provide services.

The referring court has decided to stay the proceedings and to ask the Court of Justice whether an exception disallowing remuneration to authors for the communication of their work by television or radio transmission by means of television or radio receivers to patients in rooms in a private spa establishment was contrary to the Copyright Directive and whether the relevant provisions of that Directive were unconditional and sufficiently precise for collecting societies to be able to rely on them before the national courts in the circumstances where the Member State in question as not transposed the directive correctly. Furthermore, it has also asked the Court whether Articles 56 et seq. as well as 102 TFEU were to be interpreted as precluding the application of rules of national law which reserved the exercise of collective management of copyright in the territory of the Member State to a single collecting society and thereby did not allow recipients of services a free choice of a collecting society from another Member State.

B

The Court of Justice held the Copyright Directive must be interpreted as precluding national legislation excluding the right of authors to authorise or prohibit the communication of their works, by a private spa establishment, via television or radio sets in the bedrooms of the establishment’s patients. Furthermore, the Court however added that the relevant provisions could not be relied on by a copyright collecting society in a dispute between individuals for the purpose of setting aside national legislation contrary to that provision, but instead it was for the national court to interpret that legislation in the light of the wording and purpose of the Directive in order to achieve an outcome consistent with the objective pursued by the Directive. Lastly, it held that the Services Directive and Articles 56 and 102 TFEU must be interpreted as not precluding national legislation reserving the exercise of collective management of copyright in respect of certain protected works in the territory of the Member State concerned to a single copyright collecting society and thereby prevents users of such works, such as the spa establishment in the main proceedings, from benefiting from the services provided by another collecting society established in another Member State. However, it precised that Article 102 TFEU must be interpreted as meaning that the imposition of an excessive price in relation to the economic value of the service provided are indicative of an abuse of a dominant position.

C

Following the judgment of the Court of Justice, the parties to the main dispute concluded a settlement agreement, whereupon the applicant withdrew its legal action.

Referring court:       Industrial Property Office of the Czech Republic (administrative body)
Area of law:              intellectual property
ECJ formation:        5 judges, JR Ilešič
AG’s opinion:           no

A

The applicant in the main proceedings, a joint-stock company based in the Czech Republic, applied before the Czech Industrial Property Office (‘referring body’) for an invalidity of two trademarks owned by the defendant, a publisher of a prominent Czech newspaper, due to lack of good faith on the side of the defendant. These trademarks included, among other elements, a word sign corresponding to the name of this newspaper, which was originally used by the defendant’s predecessor as the name for a newspaper published between 1945 and 1990. In this regard, the applicant argued that since the agreement between the defendant and its predecessor was silent on the transfer of the trademarks in question, the former cannot use the said trademarks without an explicit consent of the latter.

The referring body has decided to stay the proceedings and ask the Court of Justice several questions relating to the concept of good faith of trademark applicants in the context of the Copyright Directive and the EU case law. It further added that it considered itself a ‘court’ within the meaning of Article 267 TFEU on the basis of constant case law, since it represented a body that adjudicated disputes concerning applications for revocation or invalidity of trademarks and patents, which was a competence that in some Member States fell within the jurisdiction of the courts.

B

The Court of Justice, however, held that it clearly had no jurisdiction to answer the questions referred by the referring body mainly since the grounds for the possible removal of the President of the referring body by the Czech Government, and the President’s term of office, are not laid down by law. The referring body therefore fails to meet guarantees of independence and impartiality, necessary in order for a particular body to be regarded as a ‘court or tribunal’ for the purposes of Article 267 TFEU.

C

The referring body declared the invalidity of the trademarks due to, on the one hand, a likelihood of confusion with an earlier trademark, and, on the other hand, a deceit of public resulting from the inclusion of a trade name belonging to an entity other than the defendant without the consent of that entity. It has, however, rejected the application for invalidity on the grounds of bad faith, as the then applicable Czech law had not contained any provisions relating to the invalidity on the grounds of bad faith.

The defendant filed an appeal before the President of the Czech Industrial Property Office as to the declaration of invalidity of the trademarks in question. The applicant initially filed an appeal regarding the rejection of the application for invalidity on the grounds of bad faith, but later decided to withdraw the appeal.

On appeal, the President of the Czech Industrial Property Office rejected the application of invalidity on the grounds of a likelihood of confusion with an earlier trademark, but confirmed the invalidity resulting from the fact that the said trademarks are of a nature to deceive the public.

Referring court:       Regional Court in Ostrava (1st instance, admin)
Area of law:              taxation
ECJ formation:        5 judges, JR Tizzano
AG’s opinion:           AG Wathelet, 13/2/2014

A

The applicant in the main proceedings, a joint-stock company based in the Czech Republic, sought before the Regional Court in Ostrava (‘referring court’) the annulment of a decision of a local tax authority, on basis of which the latter imposed a tax on the income of the applicant’s workers which had been supplied to it by a foreign employment agency. Since the foreign employment agency’s Czech subsidy had, under Czech law, no legal capacity, the applicant was obliged to withhold and pay tax for those workers in the Czech Republic. The applicant argued that such an approach would be discriminatory towards foreign employment agencies as these would be – unlike domestic employment agencies – prevented to provide complex services to Czech employers, who would still remain burdened with the duty to withhold and pay income tax for the workers supplied by such agencies.

The referring court has decided to stay the proceedings and to ask the Court of Justice whether Articles 56 TFEU and 57 TFEU precluded the application of national legislation which, where an undertaking (the supplier) supplying workers to another undertaking has its seat in the territory of another Member State, imposed on the undertaking using the workers an obligation to deduct income tax in respect of those workers’ salaries and pay it into the State budget, whereas if the supplier had been established in the territory of the Czech Republic that obligation would have been on the supplier.

B

The Court of Justice held that Article 56 TFEU indeed precluded such legislation.

C

Following the judgment of the Court of Justice, the referring court concluded that by applying national law, the local tax authority violated the obligations arising from the Czech Republic’s membership in the EU, its decision thereby being contrary to Article 10 of the Czech Constitution, under which international treaties have primacy over domestic statutory law. Consequently, the referring court annulled the contested decision.

Comment: This case was joined with the case C‑80/13, ACO Industries Tábor. Both cases involve the same referring court and the same defendant. The preliminary questions were, however, different.

Referring court:       District Court in Prague 1 (1st instance, civil)
Area of law:              agriculture
ECJ formation:        3 judges, JR Jürimäe 
AG’s opinion:           no

The applicants in the main proceedings grew sugar beet for the purpose of its sale to sugar producers. They have received the separate sugar payment (‘SPP’) from the Czech Ministry of Agriculture under Government Regulation No 45/2007. The applicants in the main proceedings have brought an action before the referring court seeking damages for harm caused as a result of the application of the rules for the grant of the SSP, as laid down in that Governmental Regulation, on the ground that those rules infringe the relevant provisions of EU law, namely Article 126 of Regulation No 73/2009. In particular, they challenged the calculation of the SPP on the basis on an incorrect representative period, that is to say, the marketing year 2005/2006. In their view, the SSP should have been allocated on the basis of the current reference period, which is the marketing year preceding the grant of that payment.

The referring court asked whether Article 126(1) of Regulation No 73/2009 must be interpreted as meaning that the concept of ‘the criteria adopted by the relevant Member States in 2006 and 2007’ also includes the marketing year which the Member States must choose before 30 April 2006 as the representative period for the grant of the SSP, under Article 143ba(1) of Regulation No 1782/2003. The ECJ answered in a quite straightforward manner: Article 126(1) of Regulation No 73/2009 cannot be interpreted as referring, for the grant of the SSP, to a representative period which is not one of the marketing years listed in Article 143ba(1) of Regulation No 1782/2003 and which had to be definitively determined before 30 April 2006 by the Member State concerned pursuant to that provision.

In the follow-up judgment, the District Court in Prague 1 stopped the proceedings as the applicants withdrew their action (in reaction the preliminary ruling issued by the ECJ).

Referring court:       Regional Court in Prague (1st instance, civil)
Area of law:              insolvency
ECJ formation:        5 judges, JR Toader
AG’s opinion:           AG Sharpston, 19/11/2015

A

The applicants to the main proceedings, a married couple, applied to the Regional Court in Prague for debt relief as they were unable to repay their overdue debts. Subsequently, they brought an action against the defendant in the main proceedings, a credit company, seeking a declaration that the credit agreement between them and the defendant was in part contrary to accepted principles of morality, notably with respect to the excessive annual percentage rates of charge (‘APR’) and contractual penalty in the event of default.

However, under Czech law, a debtor could only challenge unsecured claims on the grounds of so-called incidental application before the court, which was not the applicant’s case. Besides, the review of an incidental application was limited solely to establishing whether the claim has lapsed or was time-barred. As regards secured claims, the court was obliged to dismiss the application as being brought by a person who was not entitled to do so, unable to address the question of whether the provisions of the credit agreement in question complied with the criteria set out in the Unfair Terms Directive and the Consumer Credit Directive.

The referring court has decided to stay the proceedings and asked the Court of Justice whether the provisions of the Unfair Terms Directive and the Consumer Credit Directive precluded national rules which only enabled the court to examine the authenticity, amount or ranking of claims stemming from consumer relations only on the basis of an incidental application and which restricted the right of the debtor (consumer) to request review by the court of the registered claims of creditors solely in relation to creditors’ unsecured claims, with the objections of the debtor being further limited solely to the possibility of asserting that the claim has lapsed or was time-barred.

In the affirmative, the referring court further asked the Court whether it was required to have regard ex officio to the credit supplier’s failure to fulfil the information requirements and to accordingly infer the consequences provided for in national law in the form of the invalidity of the contractual arrangements. Furthermore, in the affirmative, the referring court asked, first, whether the provisions of the directives had direct effect and whether their direct application was precluded by the fact that the initiation of an incidental action by the court ex officio encroached on the horizontal relationship between the consumer and the supplier of goods or services. Second, the referring court asked what amount was represented by ‘the total amount of credit’ in accordance with Article 10(2)(d) of Directive 2008/48 and what amounts are included as ‘the amounts of drawdown’ in the calculation of the APR according to the formula set out in Annex I to Directive 2008/48, if the credit agreement formally promised the payment of a specific financial amount but at the same time it had been agreed that, as soon as the credit was paid out, the claims of the credit supplier in terms of a fee for the provision of the credit and in terms of the first credit repayment instalment (or subsequent instalments) would to a certain extent be offset against that amount, so that the amounts thus offset were never in reality paid out to the consumer.

Regardless of the answer to the preceding questions, the referring court asked whether, while assessing whether the above agreed compensation was disproportionately high within the meaning of Directive 93/13, is was necessary to evaluate the cumulative effect of all the penalty clauses, as concluded, regardless of whether the creditor actually insisted that they be satisfied in full and regardless of whether some of them might have from the point of view of the rules of national law been considered to have been concluded invalidly, or whether it was necessary to take into consideration only the total amount of the penalties actually demanded and capable of being demanded. Finally, in the event that the contractual penalties were found to be abusive, the referring court asked whether it was necessary to disapply all of those partial penalties which, only when considered together, led the court to conclude that the amount of compensation was disproportionately high within the meaning of Directive 93/13, or merely some of them.

B

The Court of Justice held, first, that the Unfair Terms Directive must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which, in insolvency proceedings does not permit, firstly, the court hearing the action to examine of its own motion any unfairness of contractual terms on which the claims declared in those proceedings are based, even when that court has available to it the matters of law and fact necessary to that end, and which, secondly, permits that court to examine only unsecured claims, solely in respect of a restricted number of complaints related to whether they are time-barred or have been paid.

Secondly, it held that the Consumer Credit Directive must be interpreted as meaning that it requires a national court hearing a dispute concerning claims based on a credit agreement within the meaning of that directive to examine of its own motion whether the obligation to provide information laid down in that provision has been complied with and to establish the consequences under national law of an infringement of that obligation, provided that the penalties satisfy the requirements of Article 23 of that directive.

Thirdly, it held that the Consumer Credit Directive must be interpreted as meaning that the total amount of the credit and the amount of the drawdown together designate the sums made available to the consumer, which excludes those used by the lender to pay the costs connected with the credit concerned and which are not actually paid to that consumer.

Lastly, it held that the provisions of the Unfair Terms Directive must be interpreted as meaning that, in order to assess whether the amount of compensation required to be paid by a consumer who does not fulfil his obligations is disproportionately high, within the meaning of point 1(e) of the annex to that directive, it is necessary to evaluate the cumulative effect of all the penalty clauses in the contract in question, regardless of whether the creditor actually insists that they all be satisfied in full and that, if necessary, the national courts must, by virtue of Article 6(1) of that directive, establish all the consequences of the finding that certain terms are unfair, exclude all terms found to be unfair in order to ensure that the consumer is not bound by them.

C

Following the judgment of the Court of Justice, the referring court declared that it had the jurisdiction to review the claim in question with respect to all arguments put forward by the applicants. Accordingly, the referring court held that the provision allowing immediate redemption of interest and remuneration for the granting of credit is too harsh for applicants. According to the referring court, the same applied to the right to a contractual penalty of 0.2 per cent of the total principal sum per day for each day of default and 10 per cent of the total principal sum for a default of more than one month. The referring court therefore declared those provisions null and void.

The referring court further held that, having reviewed ex officio the compliance of the credit agreement with the Consumer Credit Directive, it was obliged to regard the loan granted as bearing interest at a discount rate and to disregard the arrangements for other payments on the loan, since both the total amount of the credit and the APR were not correctly defined in the credit agreement and in the information provided prior to the conclusion of the credit agreement. More specifically, the total amount of the credit impermissibly included the amounts of other credit costs, which resulted in an understatement of the APR, thereby misleading the applicants as consumers.

The referring court therefore upheld the action and held that the defendant’s claim was not legitimate to the extent it has been challenged by the applicants.

Referring court:       District Court in Prague 6 (1st instance, civil)
Area of law:              transport
ECJ formation:        5 judges, JR Šváby
AG’s opinion:           AG Bot, 28/7/2016

[Marek]

Referring court:       Regional Court in Ostrava (1st instance, admin)
Area of law:              transport
ECJ formation:        3 judges, JR Šváby
AG’s opinion:           no

A

The applicant in the main proceedings, a former driving-licence examiner, applied for a driver’s professional competence card, claiming that, at the time when he was still an examiner, he has trained and examined himself. His application was rejected as the defendant, a local municipal authority, rejected the possibility of ‘self-examination’ and held that the applicant should have fulfilled alternative conditions for obtaining the licence. Specifically, he should have submitted a proof of successful completion of a professional driving exam not older than six months or a proof of participation in a regular training course lasting at least 35 hours.

The applicant challenged the defendant’s decision before the Regional Court in Ostrava (‘referring court’), arguing that the national legislation was incompatible with the Initial Qualification and Periodic Training of Drivers Directive, as the former had laid down stricter conditions for obtaining a professional driver’s licence that the latter. The defendant argued that the purpose of the Directive was to increase the professionalism of drivers and to set minimum standards for their training. It was, therefore, not contrary to the purpose of the Directive if a Member State fixed stricter conditions than the Directive.

The referring court has decided to stay the proceedings and to ask the Court of Justice whether the provisions of the Initial Qualification and Periodic Training of Drivers Directive precluded national legislation which imposed additional conditions for exemption from the requirement on drivers of certain road vehicles for the carriage of goods or passengers to obtain an initial qualification.

B

The Court of Justice held that Article 4 of that Directive must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, under which, before the driving activity in question may be carried out, periodic training of 35 hours duration has to be completed by persons who are exempted, under Article 4, from the requirement that drivers of certain road vehicles for the carriage of goods or passengers obtain an initial qualification.

C

Following the judgment of the Court of Justice, the referring court stated that it could not accept the applicant’s argumentation regarding the incorrect transposition of the directive in question. Nor could the referring court reflect the applicant’s objections to the correctness of the judgment of the ECJ as it was bound by that judgment, being in no position to review the ECJ’s conclusions. Consequently, the referring court dismissed the applicant’s claim.

Referring court:       District Court in České Budějovice (1st instance, civil)
Area of law:              company law
ECJ formation:        3 judges, JR Lycourgos
AG’s opinion:           AG Wathelet, 29/5/2018

[Marek]

Referring court:       District Court in Prague 8 (1st instance, civil)
Area of law:              services & establishment
ECJ formation:        5 judges, JR Malenovský
AG’s opinion:           AG Mengozzi, 12/2/2015

A

The applicant in the proceedings, domiciled in the Czech Republic, lodged a claim before the District Court in Prague 8 under the Flight Compensation Regulation against the defendant, a Danish airline company, as her flight from Prague to Keflavik has been delayed for more than 4 hours. The applicant argued that the said court had jurisdiction to hear her case under the Lugano Convention, under which, as a consumer concluding a contract covering both accommodation and carriage, she was entitled to sue her contractual partner in her domicile.

In the ‘first round’ of proceedings, the referring court dismissed the applicant’s claim. It held that no EU conflict-of-laws rules applied to the case as the Kingdom of Denmark did not participate in the judicial cooperation in civil matters, and it lacked jurisdiction to hear the case under international or Czech law. The appellate court upheld the referring court’s judgment. It held that while Brussels I Regulation would have been applicable to the case, there had been no contract between the defendant and the applicant, as the latter only entered into a contractual relationship with a travel agency, and not the defendant. The supreme court, however, concluded that the referring court should have allowed the defendant to establish jurisdiction over the Czech courts in accordance with the procedure laid down in Article 24 of the Brussels I Regulation, i.e. by serving the defendant with the claim and allowing it to enter an appearance. The supreme court then ordered the referring court to serve on the defendant a notice to plead and, in case the defendant would not have participated in the proceedings, to assess its jurisdiction in accordance with the provisions of the Brussels I Regulation. Specifically, it instructed the referring court to deal with the question of the defendant’s standing in the light of Article 5(1), 15 and 16 of the Brussels I Regulation and, if necessary, to obtain a preliminary ruling from the Court of Justice.

In the ‘second round’ of proceedings, the referring court served the defendant with the statement of claim and scheduled a court hearing. However, the defendant did not lodge a statement of defence and did not appear before the court, not allowing the jurisdiction of Czech courts to be established under Article 24 of the Brussels I Regulation.

Consequently, the referring court has decided to stay the proceedings and to ask the Court of Justice whether a contractual relationship existed between the applicant and the defendant for the purposes of Article 5(1) of [Regulation No 44/2001] even though no contract had been concluded between the applicant and the defendant and the flight was part of a package of services provided on the basis of a contract between the applicant and a third party (travel agency), whether that relationship could be qualified as a consumer relationship in accordance with Articles 15 to 17 of [Regulation No 44/2001], and whether the defendant had legal capacity to be sued in an action seeking satisfaction of the claims arising from [Regulation No 261/2004].

B

The Court of Justice held, first, that the Flight Compensation Regulation must be interpreted as meaning that a passenger on a flight which has been delayed for three hours or more may bring an action for compensation under Articles 6 and 7 of that regulation against the operating air carrier, even if that passenger and that air carrier have not entered into a contract between them and the flight in question forms part of a package tour covered by Package Travel Directive. Second, it held that Article 5(1) of Brussels I Regulation must be interpreted as meaning that an action for compensation brought pursuant to Flight Compensation Regulation by a passenger against the operating air carrier comes within the concept of ‘matters relating to a contract’, within the meaning of that provision, even if no contract was concluded between those parties and the flight operated by that air carrier was provided for by a package travel contract, also including accommodation, concluded with a third party. Thirdly, the Court concluded that Articles 15 to 17 of Brussels I Regulation must be interpreted as meaning that an action for compensation brought by a passenger against the operating air carrier, with which that passenger has not concluded a contract, does not come within the scope of those articles relating to special jurisdiction over consumer contracts.

C

In the meantime, however, the defendant declared bankruptcy and was dissolved. Since the defendant ceased to exist before the end of the proceedings without any legal successor, the referring court dismissed the proceedings.

Referring court:       Regional Court in Ostrava (1st instance, admin)
Area of law:              customs union
ECJ formation:        3 judges, JR Blitgen
AG’s opinion:           no

[Marek]

Referring court:       Regional Court in Prague (1st instance, admin)
Area of law:              taxation
ECJ formation:        5 judges, JR Jürimäe
AG’s opinion:           AG Kokott, 3/10/2019

[Marek]

Referring court:       Regional Court in Prague (2nd instance, civil)
Area of law:              transport
ECJ formation:        3 judges, JR Šváby
AG’s opinion:           no

A

The applicants to the main proceedings lodged a claim under the Flight Compensation Regulation against the defendant, a Czech airline company, as the second leg of their flight from Prague to Bangkok, operated by a different airline company not domiciled in the EU, has been delayed by more than 6 hours.

In the ‘first round’ of proceedings, the first-instance court allowed the claim, holding that the defendant had a standing before the court as, under Article 3(5) of the Regulation in question, where an operating air carrier which has no contract with the passenger performs obligations under the Regulation, it shall be regarded as doing so on behalf of the person having a contract with that passenger. After the Municipal Court in Prague (‘referring court’), acting as an appellate court, dismissed the defendant’s appeal against the judgment of the first-instance court, the defendant lodged a constitutional complaint before the Constitutional Court, which subsequently annulled the judgment of the appellate court. It held that the appellate court erroneously instructed the parties on the impossibility of an appeal before the Supreme Court. It further instructed the appellate court to address the reasoning contained in the decision of the German Federal Court of Justice Xa ZR 132/08, referred to by the applicant.

In the ‘second round’ of proceedings, the referring court held that the claim for compensation under the Regulation can only be successful in the present case if it was to be concluded that, pursuant to Article 3(5), second sentence, of the Regulation, the contracting carrier (the defendant) was liable, in case of a flight with a stopover, also for the delay occuring during the part of the flight that was operated by another non-EU carrier. That view, supported by case law of Czech courts, followed, according to the referring court, the purpose of the Regulation, which is to protect passengers to a high degree. The opposite view, supported by the case law of the German Federal Court of Justice, followed the principle under which the obligation to compensate under the Regulation burdens the operating air carrier.

The referring court has decided to stay the proceedings and asked the Court of Justice whether there was an obligation on an EU carrier to pay compensation to passengers under the second sentence of Article 3(5) of Flight Compensation Regulation where an EU-based carrier, as the contractual carrier, operated the first leg of a flight with a stopover at an airport in a non-Member State, from which, under a code-share agreement, a non-EU-based carrier operated the second leg of the flight, which resulted in a delay exceeding three hours.

B

The Court of Justice held that Article 5(1)(c) and Article 7(1) of the Flight Compensation Regulation must be interpreted as meaning that, in the case of connecting flights, where there are two flights that are the subject of a single reservation, departing from an airport located within the territory of a Member State and travelling to an airport located in a non-Member State via the airport of another non-Member State, a passenger who suffers a delay in reaching his or her destination of 3 hours or more, the cause of that delay arising in the second flight, operated, under a code-share agreement, by a carrier established in a non-Member State, may bring his or her action for compensation under that regulation against the Community air carrier that performed the first flight.

C

Following the judgment of the Court of Justice, the referring court allowed the applicants’ claim and, therefore, upheld the judgment of the first-instance court. At the same time, the referring court rejected the argumentation of the defendant according to which the ECJ’s judgment violated its right to peaceful enjoyment of property within the meaning of European Convention on Human Rights.

Referring court:       District Court in České Budějovice (1st instance, civil)
Area of law:              judicial cooperation
ECJ formation:        3 judges, JR Safjan
AG’s opinion:           no

A

The parties to the main proceedings entered into a rental agreement. After the defendant failed to pay the rent due following a written acknowledgement thereof, the applicant filed a claim with the District Court in České Budějovice (‘referring court’), seeking the payment of the outstanding rent along with a default fee. The court was unable to ascertain the defendant’s whereabouts and therefore appointed a guardian in order to protect the defendant’s rights. The defendant remained idle in the proceedings, as did her appointed guardian, who failed to appear at the hearing. The referring court then allowed the applicant’s claim.

Afterwards, the applicant asked the referring court to obtain the judgment in the form of a European Enforcement Order (‘EEO’) pursuant to the European Enforcement Order Regulation. The referring court held that the conditions for the issuance of the EEO were not fulfilled as it could not regard the applicant’s claim as uncontested, but rather as a claim which was allowed following an evidentiary hearing, on which the defendant failed to raise any objections. The applicant contested the decision of the referring court before the Constitutional Court, which found the practice of the referring court unconstitutional and instructed it that it was for the latter to request a preliminary ruling from the ECJ.

The referring court has decided to stay the proceedings and to ask the Court of Justice whether the relevant provisions of the European Enforcement Order Regulation were to be interpreted as meaning that a claim which has been decided on after taking evidence may be regarded as uncontested if neither the defendant, who acknowledged the debt before the commencement of the action, nor the guardian ad litem attended the hearing, and neither of them raised any objections in the course of the hearing.

B

The Court of Justice held that the European Enforcement Order Regulation must be interpreted as meaning that, where a court is unable to obtain the defendant’s address, it does not allow a judicial decision relating to a debt, made following a hearing attended by neither the defendant nor the guardian ad litem appointed for the purpose of the proceedings, to be certified as a European Enforcement Order.

C not available. [Filip]

Referring court:       District Court in Ostrava (1st instance, civil)
Area of law:              consumer protection
ECJ formation:        5 judges, JR Kumin
AG’s opinion:           AG Kokott, 14/11/2019

A

The applicant, a consumer credit provider, lodged a claim before the District Court in Ostrava (‘referring court’) against the defendant, seeking a repayment of the amount owed on the consumer loan, together with a loan arrangement fee, a contractual interest and a contractual penalty. Throughout the proceedings, the applicant has not argued that it had assessed the defendant’s creditworthiness before entering into the credit agreement. On the other hand, the defendant has not argued that the credit agreement was invalid on the ground that the applicant failed to assess its creditworthiness.

The referring court has decided to stay the proceedings and to ask the Court of Justice whether the combined provisions of Article 8 and Article 23 of the Consumer Credit Directive preclude national legislation which specifies that the penalty for failure to fulfil the creditor’s obligation to assess the consumer’s creditworthiness before the conclusion of the credit agreement shall be the nullity of the credit agreement linked with an obligation on the consumer to return the principal sum to the creditor at a time appropriate to the consumer’s financial capacity, where such a penalty is, however, applicable only in the event that the consumer raises an objection of nullity in relation to the agreement within a three-year limitation period. The referring court further asked whether the combined provisions of Article 8 and Article 23 of that Directive require a national court to apply, of its own motion, the penalty laid down in national legislation for failure of the creditor to fulfil its obligation to assess the consumer’s creditworthiness, even if the consumer does not actively invoke the penalty.

B

The Court of Justice held that Articles 8 and 23 of the Consumer Credit Directive must be interpreted as imposing an obligation on a national court to examine, of its own motion, whether there has been a failure to comply with the creditor’s pre-contractual obligation to assess the consumer’s creditworthiness, provided for in Article 8 of that directive, and to draw the consequences arising under national law of a failure to comply with that obligation, on condition that they satisfy the requirements of Article 23. The Court of Justice further held that Articles 8 and 23 of Directive 2008/48 must also be interpreted as precluding national rules under which a failure by the creditor to comply with its pre-contractual obligation to assess the consumer’s creditworthiness is penalised by the nullity of the credit agreement, linked with an obligation on the consumer to return the principal sum to the creditor at a time appropriate to the consumer’s financial capacity, solely on condition that that consumer raises an objection of such nullity within a three-year limitation period.

C

Following the judgment of the Court of Justice, the referring court held that in view of the findings of the ECJ there was no doubt that the consumer credit agreement was to be considered null and void. Consequently, it held that the consideration provided to each other must be accounted for in accordance with the principles of unjustified enrichment, which means that both parties are entitled to mutually demand reimbursement for their previous contractual performance.

Referring court:       District Court in Prague 5 (1st instance, civil)
Area of law:              family law
ECJ formation:        3 judges, JR Rossi
AG’s opinion:           no

A

The parties to the main proceedings, former spouses, were married in the Netherlands and had their common domicile in the Czech Republic. Subsequently, the applicant returned to the Netherlands, while the defendant stayed in the Czech Republic. Their marriage was then divorced by a Dutch court who ordered the applicant to contribute to the maintenance of the defendant.

The applicant sought before the District Court for Prague 5 (‘referring court’) the annulment of the maintenance duty, arguing that Dutch law should apply.

In the ‘first round’ of proceedings, the referring court, as a first-instance court, dismissed the applicant’s claim. It concluded that the applicable law to the dispute was Czech law and held that there was no duty under Czech law according to which the applicant was obliged to contribute to the maintenance of the defendant. With regards to the judgment of the Dutch court, the referring court stated that this obligation has also ceased to exist, since the judgment in question covered only a period of one year after its delivery. The appellate court, however, annulled the referring court’s judgment and ordered the latter to have the Dutch judgment re-translated, and, with the cooperation of the Ministry of Justice, to determine the content of Dutch law relating to maintenance of the divorced wife in support of its conclusions.

During the ‘second round of proceedings’, the referring court deduced from Article 15 of the Maintenance Regulation and Articles 3 and 5 of the Hague Protocol that maintenance obligations between former spouses are governed by the law of the Member State of their last common habitual residence, which in the present case was the Czech Republic. However, the referring court observed that the parties to the original proceedings had their last common habitual residence in the Czech Republic merely before the entry into force of the Maintenance Regulation, which, under Article 75(1) of that regulation, applies, inter alia, only to proceedings brought from the date of its application.

The referring court has, therefore, decided to stay the proceedings and to ask the Court of Justice whether the law applicable to the case in question was Czech or Dutch.

B

The Court of Justice, however, held that the referring court’s decision did not appear to satisfy the requirement laid down in Article 94(c) of the Rules of Procedure, since it did not state sufficiently in legal terms the grounds on which the referring court had doubts as to the interpretation of Article 15 of Regulation No 4/2009 and Articles 3 and 5 of the Hague Protocol and on which it consider it necessary to refer a question to the Court of Justice for a preliminary ruling. According to the Court of Justice, the referring court was not asking the Court of Justice for assistance in interpreting applicable provisions, about which it had no doubt, but for assistance in applying them in order to determine the law applicable to the dispute before it. While the referring court was of the opinion that the applicable law in the present case should have been Czech law, it merely mentioned that, according to the applicant, Dutch law was to be applied. Moreover, the Court of Justice could not understand from the preliminary reference whether the referring court had any doubts about the ratione temporis applicability of the Maintenance Regulation and the Hague Protocol to the dispute in the main proceedings, let alone the reasons which had led it to have such doubts. Consequently, the Court of Justice concluded that the request for a preliminary ruling was manifestly inadmissible.

C

Following the order of the Court of Justice, the referring court maintained that the law of the Czech Republic was applicable to the dispute. On the merits, the court concluded that the maintenance obligation of the applicant towards the defendant ceased to exist on the expiry of three years from the entry of the judgment declaring the divorce of the parties. Besides, the referring court stated that even if the applicant's claim was to be assessed under Dutch law, it could not but conclude that the applicant's maintenance obligation to the defendant has also been extinguished under that law. It, therefore, dismissed the applicant’s claim.

Comment: It is to be noted that the applicant raised two objections against the judge in charge for her alleged prejudice related to the inadmissibility of her request for preliminary ruling. The first objection was dismissed by the Municipal Court in Prague, a higher court directly superior to the referring court, which held that a judge cannot be disqualified from hearing a case on the grounds of an allegedly incorrect preliminary reference to the Court of Justice. The second objection, by which the applicant referred inter alia to the judge’s ‘proven ignorance of EU law’, was dismissed by the referring court as being raised tardily and, at the same time, being unfounded, as already being resolved by the earlier decision of the Municipal Court in Prague.

Referring court:       District Court in Český Krumlov (1st instance, civil)
Area of law:              employment, social policy
ECJ formation:        3 judges, JR Schintgen
AG’s opinion:           no

A

The applicant in the main proceedings, a former employee of the defendant, has lodged a claim before the District Court for Prague 9 (‘referring court’), seeking a compensation for unpaid wages for two half-hour breaks during each of his shift, arguing that, as a firefighter, he must have been on stand-by in the event of an emergency during these breaks.

In the ‘first round’ of proceedings, the referring court has allowed the applicant’s claim, ordering the defendant to pay the applicant the wages owed. On appeal, the Municipal Court in Prague upheld the judgment of the referring court. Both judgments were, however, later annulled by the Supreme Court.

In the ‘second round’ of proceedings, the applicant argued before the referring court that, in order to appreciate the issue in question, the relevant provisions of the Working Time Directive as well as the related case-law of the Court of Justice must be clarified.

Therefore, the referring court has decided to stay the proceedings and to ask Court of Justice whether a break period in which an employee must be available to his or her employer within two minutes, in case there was an emergency call-out, was to be considered ‘working time’ within the meaning of the Working Time Directive; whether the assessment to be made in relation to the question above was influenced by either by the fact that such interruption occurred only at random and unpredictably or, as the case may be, by the frequency of such interruption; and whether a court of first instance, when ruling after its decision has been set aside by a higher court and the case referred back to it, could disregard a ruling adopted by the higher court, which is binding on the court of first instance, if that ruling conflicted with EU law.

B

The Court of Justice held, first, that the Working Time Directive must be interpreted as meaning that the break granted to a worker during his or her daily working time, during which the worker must be ready to respond to a call-out within a time limit of two minutes if necessary, constitutes ‘working time’ within the meaning of that provision, where it is apparent from an overall assessment of all the relevant circumstances that the limitations imposed on that worker are such as to affect objectively and very significantly the worker’s ability to manage freely the time during which his or her professional services are not required and to devote that time to his or her own interests. Secondly, the Court held that the principle of primacy of EU law must be interpreted as precluding a national court, ruling following the setting aside of its judgment by a higher court, from being bound, in accordance with national procedural law, by the legal rulings of that higher court, where those assessments are not compatible with EU law.

C

Following the judgment of the Court of Justice, the referring court found that, during the breaks, the applicant could either stay in the firefighters’ building on the defendant’s premises, where he had a kitchen to prepare his meals, or he could go to the plant cafeteria in another building on the premises. In such a case, however, he was required to carry a radio and, in the event of an emergency, run immediately to the front of the cafeteria building where his vehicle was parked and be ready to leave within 2 minutes of the emergency call. Given the short response time, the applicant had to wear a uniform throughout his breaks. The applicant thus had virtually no opportunity to dispose of his break time, as he had to be ready to intervene almost immediately in case of emergency. The applicant could not engage in relaxing activities during the breaks, knowing that he could not be interrupted from them at any moment, nor was he assured of complete peace for relaxing activities such as a short walk in the fresh air or meditation, etc. Accordingly, the applicant’s ability to dispose of that time was not only severely limited, but almost non-existent. Similarly, the proven frequency of interventions during the break time, approximately 4 to 5 times a year, in no way reduced the need to be ready to intervene.

The referring court thus concluded that it was the aspect of being ready to act at very short notice at any moment that made the ‘break’ a working period, which should have been remunerated accordingly.

Comment: Ultimately, however, the referring court took into account that the claimed amount was paid to the applicant in full after the judgment of the appellate court in the ‘first round’ of proceedings became final. Thus, holding that the claim asserted by the claimant has no longer existed, it formally dismissed the action, while awarding the costs of the proceedings to the applicant.

Referring court:       Regional Court in Ostrava (1st instance, admin)
Area of law:              fundamental rights
ECJ formation:        3 judges, JR Jarukaitis
AG’s opinion:           no

[Marek]

Referring court:       Regional Court in Brno (1st instance, admin)
Area of law:              food labelling / food safety
ECJ formation:        5 judges, JR Ilešič
AG’s opinion:           AG Tanchev, 6/10/2021

[Marek]

Referring court:       Regional Court in Ostrava (1st instance, admin)
Area of law:              customs union
ECJ formation:        3 judges, JR Picarra
AG’s opinion:           no

[Marek]

Referring court:       Regional Court in Brno (1st instance, admin)
Area of law:              agriculture
ECJ formation:        3 judges, JR Bay Larsen
AG’s opinion:           AG Rantos, 2/9/2021

[Marek]

Referring court:       District Court in Prague 8 (1st instance, civil)
Area of law:              judicial cooperation
ECJ formation:        3 judges, JR Toader
AG’s opinion:           no

A 

The applicant, a commercial bank domiciled in Poland, lodged a claim before the District Court for Prague 8 (‘referring court’), seeking a payment of the amount due under a credit agreement concluded with the defendant, a Slovak national domiciled (at the moment the claim was lodged) in Slovakia, who, however, had resided in the Czech Republic at the moment of the conclusion of the credit agreement before returning back to her home country. Although the defendant has responded to the court’s invitation to make a statement on the application, she refused to acknowledge the jurisdiction of the referring court on the grounds that she was domiciled in Slovakia. It was, therefore, for the courts in Slovakia to hear the claim originating in a consumer contract.

The referring court has decided to stay the proceedings and to ask the Court of Justice whether the term ‘consumer’s domicile’ within the meaning of Article 17(1)(c) of Regulation No 1215/2012 related to the date on which the application was lodged or to the date on which the relationship of obligation arose between the consumer and his or her contractual partner and whether a consumer domiciled in another Member State within the meaning of Article 7 of Regulation No 1215/2012 could be sued in a court of the place where the obligation concerned was or should have been due to the fact that the consumer’s contractual partner did not pursue commercial or professional activities in the State in which the consumer’s domicile is located at the time the action was brought.

B

The Court of Justice held that the concept of ‘consumer’s domicile’ referred to in Article 18(2) of Regulation (EU) No 1215/2012 must be interpreted as designating the consumer’s domicile at the date on which the court action is brought.

C

Following the judgment of the Court of Justice, the referring court found that the defendant was not a citizen of the Czech Republic and had no property or residence in the Czech Republic. In those circumstances, the referring court concluded that Czech courts did not have jurisdiction to hear the case. Consequently, the referring court dismissed the proceedings.

Referring court:       Regional Court in Brno (1st instance, admin)
Area of law:              taxation
ECJ formation:        3 judges, JR Bonichot
AG’s opinion:           no

[Marek]

Referring court:       High Court in Prague (2nd instance, civil)
Area of law:              insolvency
ECJ formation:        3 judges, JR Piçarra
AG’s opinion:           no (but yes in a similar case decided after the preliminary reference!)

ALD and GEDEM had entered into five contracts for leasing movable assets, with GEDEM failing to pay 25 amounts due under these contracts. ALD sought fixed compensation for recovery costs for each unpaid amount in the insolvency proceedings. The Regional Court partially granted ALD's claim, but the High Court upheld a decision limiting the compensation. Following criticism from the Constitutional Court for not considering a CJEU preliminary ruling, the High Court referred questions concerning the interpretation of Directive 2011/7/EU.

In the preliminary reference, the High Court of Prague asked the ECJ several questions related to the interpretation of Directive 2011/7/EU. The court inquired whether, under the directive, a creditor is entitled to a fixed sum of at least EUR 40 for each late payment in agreements with recurring or ongoing performance. Additionally, the court questioned whether the claim for this fixed sum under the directive could be refused by Member State courts based on general private law principles.

The High Court expressed its own legal opinion on the matter by initially ruling (in 2019) that the fixed compensation for recovery fees was due only once for each of the five contracts, irrespective of the number of payments that had not been made by the deadline. After that ruling was quashed by the Constitutional Court, the High Court decided to refer two questions to the ECJ for clarification. In the reference itself, however, the High Court did not submit its own legal opinion on the matter.