New tools for the recovery of arrears
Starting this year, the tax authorities are not limited by local jurisdiction when recovering tax arrears. At the same time, from 1 July 2025, the customs administration can use a new power in the event of an u…
Legal News [October 2025]: The general meeting has no obligation to distribute profit
In the October case law review, we select four Supreme Court decisions that offer insightful interpretations across various legal areas. The Court addressed whether a lawsuit to prove the fulfillment of a condition for the enforceability of an execution title falls under insolvency proceedings. It also reiterated that even a clearly worded employment contract is subject to interpretation based on the parties’ intent. In corporate law, it confirmed that a general meeting is not obliged to distribute profit without an express agreement between shareholders. Finally, it emphasized that the removal of a building on another’s land cannot be ordered if it would constitute a disproportionate interference with the owner’s rights.
- The plaintiff sought, under § 43(2) of the Execution Code, a determination that the creditor had indeed provided the debtor with the loan amount stated in a notarial deed, in order to prove fulfillment of the condition for the enforceability of the execution title. Lower courts discontinued the proceedings, reasoning that it was an inadmissible proceeding concerning a claim related to the debtor’s insolvency estate (§ 140c, § 141a Insolvency Act). In ruling No. 29 Cdo 2352/2024, the Supreme Court held that such a lawsuit does not aim to determine the existence or amount of a claim against the debtor, but merely to determine fulfillment of the condition for the execution title’s enforceability. Therefore, it is not a proceeding concerning claims or rights related to the insolvency estate within the meaning of the Insolvency Act, and thus should not be discontinued.
- In judgment No. 21 Cdo 185/2025, the Supreme Court dealt with the interpretation of an employment contract. The plaintiff challenged the validity of the employer’s immediate termination of employment due to the plaintiff’s unexcused absence. The core of the dispute was the place of work specified in the written contract as Prague, while the plaintiff claimed that the actual intention of both parties was for the work to be performed in Hodonín. The trial and appellate courts held that the parties’ intent was expressed clearly, and therefore there was no need to interpret the expression of will. However, the Supreme Court’s settled case law maintains that any expression of intent is subject to interpretation. The lower courts failed to consider, for example, that the plaintiff had applied for the position based on a job advertisement stating Hodonín as the place of work. The Supreme Court therefore annulled both lower courts’ decisions.
- In ruling No. 27 Cdo 625/2025, the Supreme Court addressed the validity of a general meeting’s resolution not to distribute the company’s profit. It confirmed that under §§ 161 and 191 of the Business Corporations Act (ZOK), the general meeting is not obliged to distribute profit unless expressly agreed by the shareholders. The argument that a minority shareholder was “excluded from decision-making” was rejected—the company’s circumstances result from their own articles of association. The Court also recalled protection against abuse of voting rights under § 8 and § 212(2) of the Civil Code and §§ 191–193 of the ZOK, but found that no abuse had occurred. The appeal was dismissed as inadmissible, as the conclusions of the appellate court were consistent with established case law.
- In judgment No. 22 Cdo 3075/2024, the Supreme Court reiterated that, according to established case law, when the rights of a landowner and a building owner conflict, the court must always weigh the landowner’s benefit from the removal of the structure against the building owner’s harm resulting from such removal. The removal of a structure (in this case, a small hydroelectric plant) cannot be ordered if the harm to the building owner would vastly exceed the landowner’s benefit—in such a case, it would constitute an abuse of property rights, which does not enjoy legal protection.
