Category: Czech Republic

Allen & Overy has advised companies from the Dr. Max group on their first retail bond issuance on the Czech capital market, with a total nominal value of CZK 5 million. The Evan law firm reportedly advised the issuing group as well. White & Case reportedly advised managers Komercni Banka, UniCredit, CSOB, Ceska Sporitelna, and J&T.

According to Allen & Overy, “the bonds have a fixed interest rate of 8.50%, are due in 2028, and are secured by a financial guarantee by Glebi Holdings, the Cypriot parent company of the issuer. The success of the transaction is attested by the fact the issue was 110.7% oversubscribed.”

The Allen & Overy team included Partner Petr Vybiral, Senior Associates Tomas Kafka and Martina Kristianova, Associate Josef Pavlicek, and Junior Lawyer Jan Mourek.

Clifford Chance has advised Czech developer Finep on its sale of 220 new residential units – part of the Harfa project’s expansion – to Dostupne Bydleni Ceske Sporitelny. Wilsons reportedly advised the buyer.

According to Clifford Chance, “this strategic move aims to strengthen affordable rental housing for professionals in critical sectors such as healthcare, education, social services, as well as security and emergency services.”

Dostupne Bydleni Ceske Sporitelny is a subsidiary of Ceska Sporitelna and focuses on affordable housing.

With over 600 units already in progress, the Harfa project is poised to alleviate the challenges posed by the current housing shortage, Clifford Chance reported.

Finep is the developer overseeing the Harfa project. It has a 23-year history in the Czech real estate market. Over the years, the company delivered over 15,000 residential units and 200 houses and remains committed to diverse housing options, including personal ownership, cooperative ownership, and rental solutions, emphasizing affordability.

The Clifford Chance team included Partner Emil Holub, Counsel Milan Rakosnik, and Associate Josef Lysonek.

KSB has advised the Seyfor Group on its acquisition of the KS-Program software company.

The Seyfor Group is a European ICT solution provider.

According to KSB, “with this acquisition, Seyfor increases its market share in the area of payroll and HR systems for medium and large enterprises. KS-Program’s clients include Skoda Praha, Hyundai Motor Czech, as well as the Senate and the Moravian-Silesian regional government.”

Back in 2022, KSB advised on Seyfor’s acquisition of Commander Services (as reported by CEE Legal Matters on December 8, 2022).

The KSB team included Partners Jan Beres and Drahomir Tomasuk and Junior Lawyer Josef Novotny.

KSB did not respond to our inquiry on the matter.

Editor’s Note: After this article was published, Eversheds Sutherland announced it had advised the owners of KS-Program on the sale. The firm’s team included Counsel Michal Hrabovsky and Associate Petr Kucera.

Squire Patton Boggs has advised the CEZ Group on its long-term access agreement to an LNG regasification terminal to be constructed and operated by the Hanseatic Energy Hub in Stade, Germany. Dentons reportedly advised HEH.

The CEZ Group is the largest utility company in Central and Eastern Europe, according to the firm.

“CEZ signed a package of terminal access documents with HEH in November 2023. It is CEZ’s first long-term LNG transaction aimed to secure the supply of diversified natural gas to the Czech Republic. CEZ signed a 15-year shipper agreement, with an option to extend the term to 25 years, locking in the capacity to provide more than a quarter of the country’s current annual gas,” Squire Patton Boggs reported. 

The Squire Patton Boggs team included Partner Vladimir Polach and further team members in Sydney and Berlin.

Reals has advised Vienna and Warsaw-listed commercial real estate group Immofinanz on its acquisition of 22 retail properties in the Czech Republic from the CPI Property Group. Rybar Soppe & Partneri reportedly advised CPI.

The CPI Property Group is a real estate holder of income-generating commercial properties focused on the Czech Republic, Berlin, Warsaw and the CEE region.

The Reals team included Partner Miroslav Dudek and Associates Filip Balousek, Zdenek Chroust, and Jana Jirakova.

In June 2023, the Czech Republic adopted the Whistleblower Protection Act implementing the relevant EU Directive with a two-year delay. The law came into force on 1 August 2023.

While large employers with 250+ employees were obliged to implement the so-called internal reporting system (IRS) by 1 August 2023, medium-sized employers with 50-249 employees still have time until 15 December 2023.

What needs to be done and what is at risk?

In particular, all employers with 50 or more employees must:

• Implement IRS,
• Appoint and train a competent person to receive and handle notifications,
• Publish the prescribed information on its website, and
• Ensure that other obligations related to the receipt and handling of notifications and the protection of whistleblowers are met.

No sophisticated technical platform is required to implement IRS, just an email and a phone. Failure to implement IRS can result in a fine of up to CZK 1,000,000. Employers may also face individual whistleblower claims for failure to provide the required protection. 

Can the IRS be outsourced or shared?

Yes, the employer can choose between external and internal technical support for the IRS, and the performance of the designated person’s function can also be outsourced. However, the ultimate responsibility always lies with the employer, and even an external contractor will certainly not relieve you of the burden of finding and transmitting information and related communications. Only employers with up to 249 employees may share the IRS. However, the sharing of IRS within a group without having its own IRS is problematic according to some statements of the European and Czech authorities.

Will our local or group ethics hotline no longer suffice?

In the vast majority of cases, the existing ethics hotline or similar mechanism for receiving notifications will not meet all the requirements under Czech law.

Especially in the case of a group solution, it is also very problematic to interfere with the setup of such a line and ensure that the specific Czech requirements are met. Therefore, it is often more efficient to introduce a parallel minimum IRS compliant with Czech law.

What is included in our implementation package and how long does it take to implement?

Based on our experience, we recommend a simple local and internal solution based on the minimum necessary implementation of the requirements of the Czech legislation, including the appointment of the appropriate employee(s) as the designated person. For this solution, we have prepared a minimum implementation package that includes the relevant whistleblowing policy, mandatory information to be published on the website, instruction and training for the designated persons and related supplementary GDPR documentation, including comprehensive legal support during implementation. Please allow ideally 2 weeks for the actual implementation.

By Radek Matous, Partner, and Barbora Safarikova, Senior Associate, Eversheds Sutherland

Dentons has appointed Ladislav Smejkal and Jiri Strzinek as Co-Managing Partners responsible for managing the Prague office and leading the firm’s strategy for the Czech market.

Smejkal and Strzinek are taking over the leadership role from Petr Zakoucky, who has, according to Dentons, “decided to step down from the leadership role in order to focus fully on his client-facing duties as a Partner in the Corporate and M&A and Energy groups.”

Smejkal is Head of the Litigation and Dispute Resolution practice in Prague. According to Dentons, “he has been representing clients in litigation and criminal law cases as well as compliance and employment law matters for more than 20 years.”

Strzinek is Co-Head of the Real Estate practice in Prague. According to the firm, he has more than 20 years’ experience in advising clients on high-value transactions.

“I am pleased to welcome Jiri and Ladislav to the leadership team,” commented Dentons Europe CEO Tomasz Dabrowski. “I believe they will be excellent leaders and representatives of our firm in the market. I would also like to thank Petr for his leadership in helping to position Dentons as a top law firm on the Czech market.”

“Our appointment sends a strong message that in today’s difficult environment, our co-management and joint approach will be key to serving our lawyers and staff, and most importantly our clients,” Strzinek said.

“Our top priority going forward will be to continue to deliver world-class advice to our clients and be the go-to law firm for not only complex and difficult legal cases but also significant transactions and litigations in Central and Eastern Europe,” Smejkal added. “At the same time, we want to create a great working environment for our people.”

White & Case has advised Keboola on its USD 32 million series A funding round led by Viking Global Investors with the participation of Presto Ventures and Reflex Capital and angel investors Eduard Kucera and Tomas Cupr, among others.

Keboola is a self-service data operations platform.

According to White & Case, “the funding builds on a USD 5 million seed round closed in 2022.”

The White & Case team included Partner Jan Stejskal, Associates Iva Cechrakova, Kamila Dankova, and Lukas Pavlik, and Legal Intern Vaclav Blazek.

White & Case did not respond to our inquiry on the matter.

White & Case has advised Energeticky a Prumyslovy Holding on the establishment of the EUR 3 billion medium-term note program of EPH Financing International, which EPH guaranteed, and the initial EUR 500 million issuance of 6.651% guaranteed notes due 2028.

EPH is a European energy group that owns and operates assets across Western Europe and CEE, namely in the UK, France, Germany, Italy, Ireland, the Czech Republic, Slovakia, the Netherlands, and Switzerland. It covers the entire energy sector including cogeneration, power and heat generation, natural gas transmission, gas storage, and gas, heat, and electricity distribution and supply.

According to White & Case, “the notes are admitted to trading on the regulated market of Euronext Dublin. The issue represented the first international issuance by EPH.”

The White & Case team included Prague-based Partner Petr Hudec, Counsel Petr Smerkl, and Associates Jan Vacula and Erik Illmann, as well as further team members in London.

White & Case did not respond to our inquiry on the matter.

A technology that changes the meaning of the word art and outpaces legislation. In the case of artificial intelligence (AI), this is especially true in the context of image creation applications such as DALL-E or Midjourney. These apps use machine learning to create original works based on an analysis of existing databases of works. However, this raises certain complications in the field of copyright.

First, copyright law only takes into account the mental activity of a person, which does not include the creation of AI. Creations generated by AI are therefore not works of authorship and are not subject to copyright protection. It is certainly necessary to pay attention to the (im)possibility of using AI in the delivery of outputs when negotiating contracts with suppliers.

What about liability for possible copyright infringement in the creation of AI generators? It is generally prohibited to use the work without the author’s permission. However, the recent transposition of the European directive into Czech law breaks this rule and allows AI to use legal licences to use even protected works for the purposes of automated data analysis. This change thus enables AI to use data protected by copyright, if the authors do not expressly disagree with such use. This statutory licence also applies to other commercial uses of AI creations.

Consequently, if an author publishes their work and an AI uses it to create a new creation, that creation can be commercially exploited without the author’s consent. However, the author can prevent this use by explicitly applying a qualification according to copyright law. It is important to note that this qualification only applies to future cases.

By Marek Poloni, Associate, Eversheds Sutherland