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 [November 2024]: Do shareholders have a fundamental right to a fair exit?
What past month’s Supreme Court decisions should you not miss? We recommend paying particular attention to the judgment in the matter of a “shareholder’s right to a 'fair exit'”, which the SC defined as a fundamental right the violation of which gives rise to the right to appropriate satisfaction. In its next judgment, the SC confirmed that when determining compensation for a necessary passage, it is required to consider not only the expert opinion, but also the harm caused to the owner of a plot of land. The third important judgment dealt with the topic of liability for damage caused by a horse at a public equestrian event. In this judgment, the Supreme Court pointed out three defects in the proceedings, namely insufficient instruction to the defendant on the possibility of liberation, incorrect interpretation of Section 2934 of the Civil Code, and omission of the objection of the injured party’s participation in the harm. The last judgment analyses the matter of the servitude of a footpath, where the SC decided that it also applies to tenants of real estate, unless otherwise agreed.
- In its judgment Ref. No. 27 Cdo 632/2023, the Supreme Court dealt with the matter of whether the right of the shareholder to receive the public offer of a contract to buy securities (right to fair exit) from the company pursuant to Section 186a of the Commercial Code is a fundamental right of the shareholder the violation of which establishes a shareholder’s entitlement to appropriate satisfaction from the company pursuant to Section 131 (4) of the Commercial Code. In the relevant dispute, on the basis of the General Meeting’s resolution, the public tradability of the defendant’s shares was cancelled without the defendant making the public offer of a contract to buy securities. The appellant sought the declaration of invalidity of the resolution of the General Meeting and the payment of appropriate satisfaction for the violation of the fundamental right of the shareholder. This was rejected by the Court of First Instance. The Court of Appeal concluded that the change in the form of the shares affected the claimant only as the owner of the shares, not the position of the shareholder and rights as the shareholder. According to the Court of Appeal, the right to fair exit is not the fundamental right of the shareholder within the meaning of Section 131 (4) of the Commercial Code, and its breach does not give rise to the shareholder’s right to appropriate satisfaction. The Supreme Court reiterated its early conclusions that the purpose of the right to appropriate satisfaction is primarily to provide protection to a member whose right has been affected by an unlawful resolution of the General Meeting, even if said member does not obtain redress (for reasons set out in Section 131 (3) of the Commercial Code) in the form of a declaration of invalidity of the resolution of the General Meeting. The right to appropriate satisfaction applies if the shareholder’s fundamental right has been violated. According to the conclusion of the Supreme Court in this matter, the guidance is that the violated right to fair exit stated in Section 186a (1) of the Commercial Code is a mandatory provision that cannot be derogated from in any manner whatsoever in the Articles of Association. In such a case, it is the fundamental right of the shareholder. If the General Meeting of the company interfered with the right to fair exit and if the shareholder suffered non-pecuniary harm in causal connection with the resolution of the General Meeting and the interference with the shareholder’s right pursuant to Section 186a of the Commercial Code, the injured party was entitled to appropriate satisfaction.
- In its judgment Ref. No. 22 Cdo 1667/2023, the Supreme Court addressed the matter of determining the amount of compensation for the establishment of a passage. The claimants requested the establishment of a necessary passage through the defendants’ plot of land because their own plot of land is not accessible from the public road. The older easement did not allow adequate access, as this access led to a dense forest. The District Court in Chrudim allowed the necessary passage on the condition that parking on the service plot of land would not be allowed, and determined compensation of CZK 8,830 for the defendants. The Regional Court in Hradec Králové upheld this decision, determining the amount of compensation on the basis of an expert opinion according to the valuation decree. The Supreme Court stated that the Court of Appeal had incorrectly determined the amount of compensation for the establishment of the necessary passage when it relied only on an expert opinion according to price regulations and did not consider the harm caused to owners of the plot of land. The Supreme Court emphasized that the owner’s harm might also consist of a reduction in the price of the plot of land as a result of its encumbrance with the right of passage. It can also be considered whether the plot of land, or its part encumbered by the right of the necessary passage, will be used exclusively by the applicant for its permission, or by other persons or the owner of the encumbered plot of land. The Supreme Court also pointed out that there was no price regulation for determining such compensation, not even the Property Valuation Act. The Supreme Court reached similar conclusions this week in Decision Ref. No. 22 Cdo 953/2024, which, however, was not admissible.
- In its judgment Ref. No. 25 Cdo 3486/2023, the Supreme Court decided on liability for damage caused by an animal pursuant to Section 2933 and Section 2934 of the Civil Code. The District Court in Pardubice decided on the legal action for compensation for non-material harm caused to the claimant by the death of her mother, who had died during the commercial equestrian event “Hubert’s Ride” organised by the defendant. The claimant’s mother had fallen from a horse and had been trampled by the horse, which led to her death. The Court acknowledged the defendant’s liability for damage caused by the animal pursuant to the Civil Code (Sections 2933 and 2934). The Court of Appeal concluded, on the basis of an expert opinion, that the defendant failed to meet conditions of liberation, as the defendant did not prove that they had exercised all the proper care. For example, the defendant did not inspect the suitability of the choice of the horse for the relevant rider from the public, the ability of the rider to cooperate with the horse, or the ability of cooperation between all horses and riders. The defendant also neglected to eliminate risks, such as the presence of a drone, which could have caused the horse’s sudden behaviour. The Supreme Court emphasized three defects in the proceedings, namely: (i) the Court of Appeal did not sufficiently instruct the defendant on the possibility of exempting themselves from the objected presence of the drone; (ii) the Court of Appeal misinterpreted Section 2934 of the Civil Code, the first sentence, according to which an owner who failed to demonstrate proper diligence in supervising the animal would be released from the obligation to pay compensation if they proved “that the damage would have occurred even if the necessary care had been exercised”; and (iii) the Court of Appeal also did not deal with the defendant’s objection about the participation of the primary victim in the occurrence of damage pursuant to Section 2918 of the Civil Code. This participation cannot be ruled out by stating that the rider’s statement about acting at her own risk and the failure to prove her unlawful conduct are insignificant. Therefore, the Supreme Court overturned the decision of the Court of Appeal.
- In its judgment Ref. No. 22 Cdo 654/2024, the Supreme Court dealt with the matter of whether the right from the servitude of a footpath established under the effect of Act No. 89/2012 Coll., the Civil Code, (the “Civil Code”) in favour of a person who is the owner of a building also applied to a tenant of such a building. The claimant demanded payment of lost rent, as the defendant prevented access to the building by replacing the lock, despite the fact that a personal servitude of the footpath was established there in favour of the owner of the plot of land (i.e. the claimant). The Supreme Court confirmed that the rule on the impossibility of transferring a personal servitude to another person had to be distinguished from a situation where a third party only derived their right from the servitude of the entitled person. In the case of the servitude of the footpath, it is an easement that is assumed to be associated with the use of the dominant plot of land, and if the extent of the servitude is not defined, the need of the dominant plot land is decisive (Section 1264 (1) of the Civil Code). Therefore, the Supreme Court concluded that if the servitude of the footpath was established in favour of a certain person, but for the purpose of providing access and thus ensuring the use of a plot of land owned by such a person or a part thereof, the extent of the servitude was determined by the needs of the entitled person in the use of such real estate, i.e. in the exercise of the ownership right to the real estate. Unless otherwise agreed, such a servitude of the footpath may also be used by persons who derive their entitlement from the ownership right of the entitled person (e.g. the tenant). However, such use must not extend the servitude.
