Arbitration court attached to the Economic Chamber of the Czech Republic and Agricultural Chamber of the Czech Republic
What is the advantage of the proceedings before the Arbitration Court compared to the proceedings before the courts of law?
There are multiple advantages. Besides the fundamental ones like deciding in single instance, speedy proceedings, informality, easy enforceability of the awards both inland and abroad and reasonable costs, others can be mentioned as well, e.g. the possibility to influence the procedural conditions which are rigid in the court proceedings - for instance the possibility to choose a place of arbitration. It means that the oral hearings are held at the place agreed upon by the parties. The Arbitration Court has its regional branches in Brno, Plzeň, Ostrava and Hradec Králové where the oral hearings may take place.
In addition there is a possibility to influence the selection of the arbitrator in a way set up in the arbitration agreement or in the Rules of the Arbitration Court. The parties may agree upon the number and names of the arbitrators and the way of their appointment. If they prefer three arbitrators it is usual that each party appoints one arbitrator and the arbitrators thereby appointed select the presiding arbitrator. An undisputable advantage is the possibility to appoint an arbitrator experienced not only in law, but also in the area of specialization related to the respective contract.
Does an arbitration clause have to be in writing?
Yes, an arbitration clause shall be made in writing otherwise it shall be void. Arbitration agreement made by telegram, telex or by electronic means enabling to provide a record of the agreement, i.e. catch the contents thereof, and to determine the persons having entered into it shall be deemed to be made in writing.
If the arbitration agreement is inserted into (general) terms and conditions governing the main contract, covered by the said arbitration agreement, then the latter shall be deemed to be validly concluded, if the offer of the main contract including the arbitration agreement made in writing is accepted by the offeree by way of implication in a way casting no doubt as to its acceptance of the arbitration agreement.
However, the special rules for consumer contracts must be taken into account. On 1 April 2012 an amendment to the Act No. 216/1994 Coll., on Arbitration Proceedings and Enforcement of Arbitral Awards came into effect. Pursuant to the new rules, if the arbitration agreement is concluded in respect of disputes arising out of consumer contracts it must be concluded independently and not as a part of terms and conditions governing the main contract; otherwise it is void. Sufficiently in advance before concluding the arbitration clause the professional will provide the consumer with due explanation enabling the consumer to assess the implications the conclusion of the arbitration clause may have. Due explanation means explanation of all the consequences of the arbitration clause.
In addition to the above, the arbitration clause in respect of disputes arising out of consumer contracts must contain information prescribed by the Act (true, accurate and complete information on arbitrator or on the fact that the permanent arbitration court will decide the dispute, form of commencement and conducting the arbitration, arbitrator’s fee and anticipated costs that may occur to the consumer and rules on adjudication thereof, place of arbitration, form of delivery of the arbitral award, and the fact that the legally effective arbitral award is enforceable). However, if the arbitration clause vests power to decide the dispute in the permanent arbitration court, the above mentioned requirement is met also by referring to the statutes and rules of such permanent arbitration court.
Under what circumstances can I address the Arbitration Court?
Arbitration may be used in property disputes where the courts of law would otherwise have jurisdiction, regarding which a settlement could be concluded between the parties (with certain exceptions, like disputes related to the enforcement of decisions and “incidence” disputes). As a prerequisite for arbitration, a valid conclusion of an arbitration agreement is indispensable, either in the form of an arbitration clause which forms a part of another agreement (e.g. the purchase contract, works contract, insurance contract, credit contract, rent contract, etc.), or as a compromissum that the parties may conclude in relation to an individual, already existing dispute. However, in consumer agreements the arbitration clause must be concluded independently and not as a part of terms and conditions governing the main contract; otherwise it is void. If there is no arbitration agreement, arbitration cannot be used.