This content is from: Local Insights

Czech Republic

Clients of Czech banks and other financial institutions in the Czech Republic will soon have a new forum for dispute resolution. After January 1 2003, disputes related to payments of up to €50,000 ($48,800) or electronic payment instruments will be decided by a new institution referred to as the Financial Arbitrator. The Arbitrator will be appointed by the lower house of the parliament for a fixed term of five years. The costs associated with the administration of the Arbitrator's office will be paid by the Czech National Bank.

Proceedings before the Arbitrator will be initiated on a petition submitted by the client of a bank or other financial institution, although the dispute cannot be heard by the Arbitrator if a court proceeding or administrative or other arbitration proceeding has already been initiated on the matter. Following the submission of the petition, the Arbitrator will request that the financial institution prepare its defence. The Arbitrator also has the authority to convene a hearing for the purpose of presenting evidence. After the relevant information is gathered and presented, the Arbitrator will render a decision. Either party can object to the decision within a period of 15 days after the receipt thereof. In addition, the Arbitrator's decision may be subject to review by the administrative courts.

The Arbitrator is also empowered to impose penalties on financial institutions that fail to provide information to the Arbitrator or otherwise fail to cooperate in the proceeding. In addition, if the Arbitrator determines that the financial institution violated applicable law, a penalty of up to 10% of the value of the transaction can be levied. The Arbitrator's findings will be enforceable by the courts or bailiffs.

© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.

Instant access to all of our content. Membership Options | 30 Day Trial