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 [April 2025]: Compensation for unreasonable length of proceedings will not increase
This time, April's Legal News presents four important court decisions. The Supreme Court has opined on the adequacy of the reasoning for not distributing profit; rejected the increase in compensation for delays in proceedings; clarified the rules for executives' liability for unsuccessful disputes; and confirmed that the statute of limitations on electricity support is governed by private law.
- The Supreme Court in its decision Ref. No. 27 Cdo 173/2024 dealt with the extent to which specific justification must be provided in the invitation to the general meeting regarding the proposal for a resolution on (non-)profit distribution. The subject justification was as follows: “The company continues with its chosen basic development strategy, which is to increase the intrinsic value of the company (shares) by means of both organic and acquisition development, with the aim of continually increasing the EBITDA indicator. The company is preparing acquisitions of two Slovak companies that will strategically complement and strengthen the company’s position in waste recycling and processing. The expected total acquisition price is approximately 23,500,000 EUR, which is approximately 600,000,000 CZK.” The appellate court concluded that it is necessary to specify individually determined concrete investment intentions with corresponding economic calculations and a time horizon with justification. The Supreme Court rejected the appellate court’s decision, referring to its earlier case law, considering this justification sufficient and stating that it is not possible to demand the invitation contains all the information shareholders would like to know.
- In decision Ref. No. 30 Cdo 2356/2024, the Supreme Court addressed the valuation of appropriate satisfaction for the unreasonable length of proceedings. Unfortunately, the Supreme Court did not proceed with increasing the basic amounts for the unreasonable length of proceedings and maintained the viewpoint Cpjn 206/2010, which it deems still in accordance with the case law of the European Court of Human Rights (ECHR). The Supreme Court stated in the justification that at the time of adopting the viewpoint, it set a very generous general range for compensation for one duration of delay. Hence there is no need to increase this range, even considering economic development. It concluded that the reasons for an increase may be: a) the need for a fair decision justified by the circumstances of the case, b) shifts in ECHR case law, c) amounts awarded by domestic courts for other types of non-property damage.
- In the resolution Ref. No. 27 Cdo 1261/2024, the Supreme Court dealt with damage caused to the company by its statutory body. The damage was allegedly caused by the former executive director who entered into a contract for legal services. The company pointed out that at that time, the dispute over the protection of good reputation was lost by the company. The Supreme Court dismissed the appeal but noted that the outcome of a specific dispute does not reflect on the usefulness and necessity of legal services. If, at the time of the dispute, the company needed legal services and the services were not unusual in scope and price, the company could not incur damage. The Supreme Court also stated that, ad absurdum, even in the currently addressed case, the costs were not purposeful.
- In a recent decision Ref. No. 33 Cdo 2190/2024, the Supreme Court addressed the statute of limitations for claims related to the costs associated with electricity support. Although the relationship between the producer and the operator of the electricity distribution system is based on public law regulations, it is a relationship between entrepreneurs, i.e., a private-law relationship. In matters not regulated by specific provisions, general private-law provisions such as the Civil Code or, according to the temporal wording, also the Commercial Code or the old Civil Code apply. This is precisely the case for the statute of limitations.
