Category: Czech Republic

BBH has advised the Kaprain Group on its acquisition of Mafra Publishing and Synthesia from Agrofert Holding in a package deal.

The Kaprain Group is a Czech Republic-based investment group founded by Karel Prazak.

Mafra Publishing is a Czech media group that publishes print and internet media.

Synthesia is a European manufacturer of chemical products, with a focus on nitrocellulose.

“Thanks to the acquisition of Synthesia, we will significantly strengthen the specialty chemicals market in Europe and become one of the most important players in the region,” Prazak said.

Back in May, BBH had also advised the Kaprain Group on its sale of Nej.cz to PPF Group company Cetin (as reported by CEE Legal Matters on May 8, 2023).

The BBH team included Managing Partner Petr Mlejnek, Partners Tomas Sedlacek and Andrea Adamcova, Senior Associate Adam Necas, and Lawyer Dominik Liska.

BBH did not respond to our inquiry on the matter.

Former CMS Partner Pavla Kreckova has joined the KPMG Legal team as the firm’s new Head of Banking/Finance and Real Estate.

Before joining KPMG Legal, Kreckova spent almost 20 years with CMS, the last 18 of which as a Partner, where she also led the Banking/Finance team. She began her career with Weil Gotshal & Manges, where she spent almost nine years between 1995 and 2003.

“I believe that, at our law firm, Pavla will make use of her extensive professional experience and contribute to the further development of our relations with clients,” Partner Martin Hrdlik commented.

“Joining KPMG Legal is an important professional move for me as this is the first time I will be working at a law firm benefiting from its partnership with a leading global advisory group,” Kreckova added.

Kocian Solc Balastik has advised founders Ivana Stefkova, Barbora Dvorakova, and Marketa Trubacova on the establishment and incorporation of the Tisina Endowment Fund.

According to the firm, the fund and its founders aim to provide a platform for people who have experienced significant upheaval in their lives. The fund is also geared towards artists and creators who, for various reasons, cannot devote themselves to their work.

KSB has also recently advised on the establishment of Czech charity auction platform Dobrobot (as reported by CEE Legal Matters on April 28, 2023) and on the Vaclav Havel Library’s change of legal form to a foundation (as reported on June 16, 2023).

The KSB team included Partner Vlastimil Pihera and Lawyer Sabina Prokopova.

Clifford Chance has advised KKCG Group’s Technology pillar on the complete refinancing of its existing bank indebtedness and the further recapitalization of its members, including those in Bulgaria, North Macedonia, Poland, and Serbia.

The KKCG Technology pillar consists of two major brands, Aricoma and Qinshift. According to the firm, it forms the largest ICT holding in the Czech Republic, and provides a wide range of services, starting with the design of ICT architecture, through infrastructure, cybersecurity, cloud services, and the implementation of corporate applications, up to the development of custom comprehensive software solutions and outsourcing.

“The transaction formed part of the company’s complex strategy of development of investments, thus enabling further growth of the entire group, enhancing further cooperation with the club of major Czech banks at the same time,” Clifford Chance announced.

Back in 2022, Clifford Chance had also advised KKCG’s Aricoma Group on the original financing for its acquisition of Musala Soft (as reported by CEE Legal Matters on September 7, 2022).

The Clifford Chance team was led by Partner Milos Felgr and Counsel Dominik Vojta and included Prague-based Senior Lawyer Stanislav Holec and Junior Lawyers Tomas Kubala and Lukas Ljubovic.

Clifford Chance did not respond to our inquiry on the matter.

Editor’s Note: After this article was published, Dentons confirmed it had advised the lenders, including CSOB and Ceska Sporitelna. The firm’s team was led by Prague-based Partner Daniel Huryc and included Associates Martin Fiala and Jan Koristka; Warsaw-based Partner Bartosz Nojek, Counsel Patrycja Polasz, and Associates Dominika Krysiak-Bogdzio and Weronika Lakoma; and Bratislava-based Partner Patricia Gossanyiova, Counsels Miroslav Kapinaj and Petra Strbova, Senior Associate Richard Marcincin, and Associate David Stanek.

Boyanov & Co. advised Ceska Sporitelna – leading a syndicate of banks including Ceskoslovenska Obchodni Banka and Komercni Banka – on Bulgarian law. The firm’s team was led by Partner Damian Simeonov and included Principal Associate Ralitsa Nedkova and Associate Dimitar Mihaylov.

The Andric Law Office and the Polenak Law Firm reportedly advised the lenders as well.

“Wrongful birth” claims seek compensation from healthcare facilities for the harm caused to parents of a child by depriving them of the opportunity to make an informed decision about whether to continue the pregnancy despite the high likelihood that the child will be seriously ill (usually as a result of improperly performed screening tests). While this type of legal procedure is well-known in the USA and the United Kingdom, instances of similar case law can already be found in EU countries, including, for example, France, whose legal system is similar to Czechia’s. However, the Supreme Court of the Czech Republic dealt with such a claim for the very first time in May 2023.

In this decision, the Supreme Court concluded that this type of claim for compensation for non-pecuniary harm is admissible in the Czech legal system and defined three categories of interference with the personal rights of parents that may occur in such cases:

i) interference with the ability to plan a family;

ii) shock of discovering the child’s true state of health; and

iii) witnessing the life of their disabled child and experiencing fear for their development.

According to the Supreme Court, each of these interferences with personal rights must be assessed separately and all aspects of liability for non-pecuniary harm must be met in respect of each interference. In the first two types of interference, the causal link between the incorrectly performed genetic screening and the non-pecuniary harm suffered will be usually present. For the third category, however, the Supreme Court has concluded that it is also necessary to prove that the mother would have undergone an abortion had the screening been carried out correctly. In particular, it should be examined whether she was prevented from making such a decision for health reasons or, for example, by religious beliefs or by legislation. Additionally, the Supreme Court expressed the opinion that the father’s rights could also be interfered with in a similar manner, even though he does not have the right to decide on undergoing an abortion.

Judgment of the Supreme Court of 16 May 2023,file no. 25 Cdo 2202/2021

By Lenka Petrakova, Associate, JSK, PONTES

On 29 June 2023, Deforestation-free Products Regulation ((EU) 2023/1115) entered into force with the aim of minimising the EU’s contribution to deforestation and forest degradation worldwide. Combating deforestation and forest degradation constitutes an important part of the package of measures needed to reduce greenhouse gas emissions and global biodiversity loss.

The new rules will affect the entire supply chains. Specifically, the rules will apply to operators and traders (natural or legal persons) who place, make available or export forest-risk commodities (cattle, cocoa, coffee, palm oil, rubber, soya and wood) and products that contain, have been fed with or have been made using these commodities, such as palm nuts, leather, chocolate or furniture.

The Regulation requires operators and traders to implement due diligence system. In practice, it means that they will have to ensure not only that the commodities and products they are supplying have been produced in accordance with the laws of the country of production, but also that they are ‘deforestation-free’ (i.e. notfrom land that has been deforested or subject to ‘forest degradation’ since 31 December 2020).

The operators and traders will need to ensure access to information on the supply chains; undertake a risk assessment; take mitigation measures and submit a statement through a European information system confirming that they have successfully exercised due diligence. However, SMEs are governed by less stringent regime.

The Regulation also establishes a benchmarking system, which assigns a level of risk related to deforestation to countries within and outside the EU. Obligations for operators, traders and authorities will depend on the level of risk.

The principal requirements will apply to large and medium-sized enterprises from 30 December 2024 and to smaller enterprises in relation to most products from 30 June 2025.

By Vladimir Ambruz, Of-Counsel, JSK, PONTES

Does your business produce computers or other electronic or electrical equipment? Maybe you make machinery and equipment, pharmaceuticals, medical devices or food? Do you have 50 or more employees? Then your company is likely to be subject to the new cybersecurity regulations. The same applies if your activities are in the chemical industry or you provide a variety of digital services – for instance cloud computing, data centre services or online marketplaces.

If your company is part of a group of companies, employees of other companies in the group, even outside the Czech Republic, will also be counted.

New European Regulation

The new cybersecurity legislation will be based on the EU Directive on measures for a high common level of cybersecurity across the Union (the NIS2 Directive) adopted at the end of 2022.

The main change compared to the current Cybersecurity Act is the fundamental expansion of the range and number of companies the new legislation applies to. It’s estimated that instead of the current 150 or so businesses, as many as 6,000 companies will be affected. For them, this will be a regulatory change comparable to the introduction of the GDPR regime five years ago. A fundamental change is also the threat of penalties potentially amounting to millions of euros in cases where a regulated person violates the new rules.

The regulation will also affect many other sectors that are important for the operation of the national economy and society – for example, almost all energy, telecommunications, water and waste management, a range of activities in transport, financial services, healthcare and research and development.

Regulated businesses will have to:

• once they determine that they’re covered by the new regulation, register as regulated service providers with the National Cyber and Information Security Authority (NÚKIB);
• identify assets (ie information and data, processes, personnel, and physical assets) that are critical from a cybersecurity perspective;
• implement appropriate organisational measures, eg establish a security management system and draft security documentation, establish security roles, operate risk, asset and supplier management;
• implement appropriate technical measures, including access control, detection of cybersecurity events, use of cryptographic algorithms;
• identify, resolve and report cybersecurity incidents;
• be subject to regular audits by an authorised inspector (under contract with them) or state control by NÚKIB. A private individual with relevant education and practice in the field of cybersecurity who passes an exam with NÚKIB and is subsequently registered as an inspector may become an authorised inspector. The reasons for introducing this concept are capacity-related. It will not be within the power of NÚKIB to monitor all regulated persons.

Current Situation in the Czech Republic

At the moment, relevant legislation is still under preparation in the Czech Republic. NÚKIB recently published a draft of a new law on cybersecurity and its implementing regulations on its website, which are intended to completely replace the existing legislation. The draft law, which takes into account a number of comments from the expert public, is currently undergoing an inter-ministerial comment procedure and is not expected to be read in the Czech Parliament until the summer of 2023. The new regulation is expected to come into force in the end of autumn or at the beginning of the winter next year.

Does it Affect Me and When?

It’s a good idea to consider in advance whether or not the new regulation will apply to your company. It’s practical to factor in the increased costs of NIS2 implementation, staffing and technical support for the whole process, and possibly also for external expert advisors who can help with this extremely important agenda. So the question to be answered is what part of the new responsibilities is your company able to provide in the long term with its existing in-house teams and where do you need to increase capacity, or what processes can be reasonably outsourced?

By Tomas Scerba, Partner, and Jan Metelka, Associate, DLA Piper

PRK Partners has advised the shareholders of Czech ticketing portal GoOut on its sale to the Piletilevi Group.

Piletilevi is a  provider of ticketing services for cultural events in the Baltic states.

GoOut, a Czech Republic ticketing portal, was launched in 2011 as a review site for cultural events.

According to PRK Partners, “of the founding three-member management team, only Lukas Jandac remains in GoOut’s ownership structure, rising from the position of Chief Sales Officer to CEO.”

This is Piletilevi’s second CEE acquisition this summer, following that of Bilete.ro in July (as reported by CEE Legal Matters on July 10 2023).

The PRK Partners team included Partner Martin Kriz and Associate Zuzana Koudelova.

PRK Partners did not respond to our inquiry on the matter.

Since the beginning of this year, the Personal Data Protection Office has issued fines of almost CZK 4,500,000 for breaches of the GDPR in connection with the processing of personal data via cookies.

According to the Personal Data Protection Office, the most common or most significant breaches include:

1) saving so-called non-technical cookies on users’ devices without their consent (for this offence the Personal Data Protection Office has imposed the highest fine of CZK 898,000);

2) deficiencies in consent to the processing of personal data (in particular, insufficient information to users about the processing);

3) insufficient information about cookies (insufficient classification of particular cookies or information available only in English);

4) the impossibility or significant complication of withdrawing the consent with the processing of personal data via cookies;

5) placing the option to “consent” or “not consent” to the use of cookies in different layers within the cookie bar;

6) the cookie bar is either unresponsive or insufficiently responsive to individual settings for the processing of personal data via cookies.

We have extensive experience with cookies and the processing of personal data. If you need assistance with cookies settings on your website, please do not hesitate to contact us, we will be happy to provide you with legal assistance.

By Matyas Kuzela, Partner, and Tomas Zwinger, Lawyer, Act Legal

Havel & Partners has successfully defended the Czech Republic-based OSA music professionals’ association against abuse of dominance claims and a CZK 10.7 million fine imposed by the Czech Office for Competition Protection.

OSA is a professional association of composers, lyricists, and musical publishers in the Czech Republic. Its avowed mission is the management of economic copyrights of composers, lyricists, and publishers or their heirs (by law or based on an agreement).

According to Havel & Partners, the Regional Court in Brno concluded that the Office was not entitled to fine collective management societies in relation to determining royalty rates, since the Ministry of Culture acts as a competition authority of its own kind in these relations, ruling in favor of OSA and cancelling the multi-million fine.

Back in 2020, the Office had fined OSA for demanding payments from accommodation facilities for TV and radio receivers placed in rooms, between 2008 and 2014, without taking into account the actual occupancy of the rooms.

“We welcome the court’s decision,” OSA Board of Directors Chairman Roman Strejcek commented. “From the start, we have maintained that we acted in full compliance with the then applicable wording of the Copyright Act, the common practice of collective management societies abroad, and in particular the rules for the protection of competition.”

According to the firm, the courts have already annulled a similar decision of the Office for Competition Protection in a different case regarding a different collective management organization, on the same grounds.

The Havel & Partners team included Partners Robert Neruda and Lenka Stikova Gachova and Senior Associate Vladislav Bernard.