Category: Czech Republic

Havel & Partners has successfully represented GoDaddy in a case that saw the company sued by a businessman with connections to Russia who sought the removal of investigative internet articles as well as financial compensation.

GoDaddy is a global domain registration platform. The company currently has more than 21 million customers worldwide and administers over 84 million domain names.

According to Havel & Partners, the firm argued that GoDaddy “could not directly interfere with the content of the website and the articles posted there. This reasoning was also supported by an expert opinion on cybernetics and computer technology. The team also argued for freedom of speech and the importance of journalistic work in a democratic society. The courts eventually dismissed the lawsuit against GoDaddy in its entirety.”

The Havel & Partners team included Partner Jan Sturm and Senior Associates Jan Kralicek and Dalibor Slavik.

Petr Syrovatko has joined PwC Legal Czech Republic as Associate Partner, together with Attorney at Law Jiri Brabec.

According to PwC Legal, litigation specialist Syrovatko focuses on tax and commercial disputes as well as administrative proceedings and arbitrations.

Prior to joining PwC Legal, Syrovatko spent four years with Deloitte Legal as Associate Partner and over 12 years with Wolf Theiss. Earlier, he spent over a year in-house, with CMSS, and, earlier still, two years with BBH as an Associate.

“I am delighted to welcome two experienced and successful attorneys to our team, who will strengthen two of our key specializations, i.e. tax and commercial litigation and transaction advisory,” commented Managing Partner of PwC Legal Czech Republic Petr Kincl.

Although the deadline for transposing Directive (EU) 2019/1937 on the protection of persons who report breaches of Union law (the Whistleblowing Directive) into national law passed on 17 December 2021, the Czech Republic has been among those Member States struggling to adopt a corresponding act into local legislation. Nonetheless, after turbulent discussions and legislative proposals, the bill has finally been passed and came into force on 1 August 2023.

The Whistleblowing Act applies to most state authorities and most contracting authorities in public procurement processes, as well as to all employers (registered entities) employing 50 employees or more as at 1 January of each year unless they fall under the scope of the Czech Anti-Money Laundering Act – for instance banks and other financial institutions which were already required to set up a whistleblowing channel under existing AML legislation. There is an exception for companies with 50-249 employees that must set up a whistleblowing system by 15 December 2023. 

The scope of the reporting misconduct is broader than in the Directive

Misconduct falling within the scope of the Whistleblowing Act includes all actions that would qualify as a criminal offence or as an administrative offence carrying a statutory upper rate of a fine of at least EUR 4,200. Furthermore, the whistleblowing protection applies to actions that violate the Whistleblowing Act, other legal regulations or EU regulations in selected areas, such as financial, tax or AML regulations, consumer protection, economic competition, data protection, environmental protection and many others. 

Obliged entities must publish, remotely, information regarding the functioning of their whistleblowing channel, how to report, the contact details of the competent person and other related information. 

Protection under the Whistleblowing Act will be provided to whistleblowers who have performed or are performing work or work-related activities for an obliged entity (including indirectly) or who have been in contact with the obliged entity in connection with the performance of work or work-related activities. Work or work-related activities covers a broad spectrum of activities including employment, freelancing, supplier relationship or volunteering. 

The Whistleblowing Act does not explicitly allow for anonymous reporting. However, the obliged entity may voluntarily decide to accept anonymous reports and handle them either as prescribed by the Whistleblowing Act or in line with their internal regulations.

Nonetheless, reporting must be allowed both in writing and verbally. If the reporting person asks to report in person, the competent person must receive the report at an in-person meeting scheduled within a reasonable timeframe no later than 14 days after the reporting person’s request. The Whistleblowing Act also introduces strict deadlines for confirming receipt of reports (7 days) and for the assessment and investigation of reports (30 days, which can be extended), in addition to specific confidentiality and record-keeping requirements.

Sharing of group whistleblowing channels is limited to mid-size companies 

Firms with fewer than 250 employees can share a whistleblowing channel or use an internal reporting system that has been set up by another obliged entity, as long as they designate a competent person to acknowledge receipt of whistleblowing reports and give feedback to the reporting person. This 249-employee limit applies to all companies sharing the internal reporting system regardless of whether they are within the same corporate group. In companies with 250 employees or more, employees may be encouraged to use a group-wide reporting system, but a parallel local internal system must also be set up. The operation of a reporting channel may also be outsourced to a third party such as an external service provider. However, the responsibility for the actual follow-up in terms of investigating, addressing the breach and taking any appropriate measures remains with the competent person at the relevant obliged entity. 

The Whistleblowing Act provides for a fine of up to EUR 2,100 for false reporting. The persons responsible for handling reports can be fined up to EUR 4,200 for breaching their duties and obliged entities subject to the Whistleblowing Act can be fined up to EUR 42,000. Further fines are:

• EUR 4,000 for anyone preventing another person from filing a report;
• EUR 4,200 for anyone retaliating or allowing retaliation against another person; and
• EUR 3,400 for providing information which is likely to defeat or undermine the purpose of the report or revealing the identity of the whistleblower or person named in the report without their consent.

By Sabina Krajickova, Senior Associate, Wolf Theiss

Havel & Partners has successfully represented Ceska Sporitelna in a dispute with the Financial Administration of the Czech Republic regarding the tax deductibility of a donation to an education foundation.

According to Havel & Partners, after the Passbook Act was repealed, Ceska Sporitelna was left with funds of nearly CZK 2 billion, which were not collected by the beneficiaries after the cancellation of the passbook “despite repeated requests from Ceska Sporitelna. Therefore, Ceska Sporitelna established the Depositum Bonum Foundation, which supports educational projects, and donated the funds to it. Subsequently, Ceska Sporitelna deducted this donation from its tax base based on the provisions of the Income Taxes Act, which allows the tax base to be reduced by the value of donations made to public institutions or non-profit organizations and foundations that raise funds publicly for science, education, research, and other publicly beneficial purposes.”

According to the firm, the tax administration did not accept the reduction of the tax base related to the donation granted by Ceska Sporitelna to the Depositum Bonum Foundation. The tax administration argued that the foundation had not used all the donated funds in the tax period concerned. However, the decision of the tax administration was rejected by the Municipal Court in Prague and annulled for illegality.

The Havel & Partners team included Partners David Krch, Josef Zaloudek, and Frantisek Korlbel and Legal Expert Alice Zemankova.

Weinhold Legal has advised Eureking on the acquisition of SCT Cell Manufacturing from PPF Biotech.

SCT Cell Manufacturing is a service and logistics organization offering cell therapy and viral vector manufacturing services.

Eureking is an investment company with shares traded on the Paris Stock Exchange.

According to Weinhold Legal, “the transaction structure envisages that PPF Biotech will contribute a portion of its shares to Eureking, thereby acquiring a minority stake.” The proposed transaction would amount to nearly EUR 20 million.

The Weinhold Legal team included Partner Martin Lukas and Senior Managing Associate Jakub Nedoma, Senior Associate Michal Przeczek, and Junior Associate Matej Novak.

Kocian Solc Balastik has advised REMA System in obtaining an authorization from the Ministry of the Environment to operate a collection system for all groups of electrical equipment, including solar panels.

According to KSB, the collection system has to ensure the performance of manufacturers’ obligations under the new End-of-Life Products Act for all groups of electrical equipment, with the new act imposing “a number of corporate, financial, contractual, organizational, technical, and other requirements on operators of collection systems.”

The Kocian Solc Balastik team was led by Partner Tomas Sequens and Counsel Petra Mirovska.

KSB did not respond to our inquiry on the matter.

Former Allen & Overy Counsel Petra Mysakova has joined the Prague office of CMS as a Partner and Head of the local Banking and Finance team.

Before joining CMS, Mysakova spent 14 years with Allen & Overy, from 2009 to 2023, joining as a Trainee and becoming an Associate in 2011, a Senior Associate in 2015, and a Counsel in 2020.

“I am confident that Petra will be a tremendous asset to our local leadership in Prague and our broader CEE team,” CMS Prague and Bratislava Managing Partner Helen Rodwell commented. “Her arrival promises exciting new opportunities not only in the Czech Republic but also across the entire region. We look forward to having her onboard.”

“I am very pleased to welcome Petra in our leading CEE Banking and Finance team,” CMS Head of CEE/CIS Banking and Finance Erika Papp added. “I look forward to seeing her grow our local practice in the Czech Republic and become an integral part of our regional team.”

“I am thrilled to have this opportunity to join CMS and elevate my practice to new heights,” Mysakova said.

Former RWS Language Services Legal Director Nada Matusikova has been appointed Co-Head of Legal at the RWS Group.

RWS Group is a British company that provides intellectual property translation, filing and search services, technical and commercial translation, and localization and develops and supports translation productivity and management software.

Matusikova joined RWS in 2014, as General Counsel, and became the Legal Director of RWS Language Services in 2021. Before that, she spent over seven years as a Corporate Lawyer with Moravia, between 2006 and 2015. Earlier, she spent over three years in-house with United Bakeries, between 2003 and 2006, and, earlier still, two years in-house with ZPV Industrial.

“I’m very excited about my new role as Co-Head of Legal in RWS,” Matusikova commented. “Over the years I built solid partner relationships with many colleagues and I’m delighted that RWS gave me this opportunity to steer the in-house legal team to the next level.” 

In 2021, Matusikova was interviewed by CEE Legal Matters for the magazine’s Inside Insight feature, covering her career path up to that point (as covered by CEE Legal Matters on February 1, 2021).

Originally reported by CEE In-House Matters.

Kocian Solc Balastik has advised the Prazska Plynarenska group on its intra-group restructuring and the creation of a new holding structure.

According to the firm, the restructuring included, among others, the downstream merger of Prazska Plynarenska Holding A.S. and Prazska Plynarenska A.S.

Prazska Plynarenska is a publicly-owned Czech gas and electricity supplier with more than 425,000 customers in and around Prague.

Back in 2022, Kocian Solc Balastik advised Prazska Plynarenska on obtaining financing from banks and the Prague municipality to build up its gas reserves for the winter (as reported by CEE Legal Matters on July 28, 2022).

The KSB team was led by Partner Jan Lasak.

The content of communications recorded by criminal law enforcement authorities (LEAs) and traffic and location data; Not only voice communications, but also electronic messages made not only from a mobile phone, but also from landlines and other devices; Records of surveillance of persons and property by the LEAs. This and other information have so far reached the Czech national competition authority (Czech NCA) without being able to use it legally as evidence in the proceedings.

A major amendment to the Czech Republic Act on Protection of Competition(ZOHS) now allows the Czech NCA to use these records and data from the LEAs as evidence “in the exercise of supervision in the case of a secret horizontal agreement or concerted practice, which has as its object the distortion of competition”.

The Czech NCA cannot therefore use the records in all kinds of proceedings. Typically, these will be used in the proceedings concerning prohibited agreements between the participants in tender procedures (bid-rigging), or other prohibited agreements between competitors (cartels).

Likewise, not all criminal proceedings qualify as a source of such records and data.

These must have been:

1. taken by the LEA in criminal proceedings involving natural persons for a crime under Section 248(2) of the Czech Criminal Code (breach of regulations on rules of economic competition) and subsequently handed over to the Czech NCA after the end of the pre-trial proceedings, or
2. taken in criminal proceedings for any of the other crimes against mandatory rules of market economy and circulation of goods in dealing with foreign countries (typically, e.g., machinations in commission of public contract and public contest), if the LEA has referred or handed over the case to the Czech NCA.

Only records and data taken after 29 July 2023 and only in Czech NCA proceedings initiated after the said date may be used as evidence.

Despite these limitations and safeguards, this is undoubtedly the most controversial amendment introduced by this major amendment to the ZOHS. In its current form, it is potentially contradictory to the right to defence and some other fundamental rights and freedoms.

We will bring you an overview of the remaining relevant amendments in the future. Stay tuned!

By Michal Hrabovsky, Head of Competition, Eversheds Sutherland