Category: Slovakia

Since former Of Counsel of Taylor Wessing Bratislava Lucia Zitnanska was appointed Slovak Minister of Justice in April 2016, the legislative changes prepared by her department have primarily been driven by the practical need to improve the enforceability of law and increase the importance of e-communication tools. To those ends, two major reforms concerning debt enforcement will enter into force in the first half of 2017.

Introduction of a New Alternative to Proceedings for a Payment Order 

The ratio of issued payment orders to the total number of initiated payment order proceedings has been steadily decreasing over the last decade. Rather than reforming the existing payment order procedure, the legislature opted to create an alternative to it. The so-called collection procedure is expected to be simpler, swifter, cheaper.

The District Court Banska Bystrica shall have exclusive jurisdiction in collection procedure matters. The court clerk’s responsibility will be to assess – within ten working days – whether the claim for payment of a euro amount is to be “reasonably assumed” on the grounds of information and documents attached to the application filed by electronic means. The claimant will however not be obliged to state reasons or to link the evidence together. If service to the natural person defendant’s address stated by the claimant fails, searching for his/her address in the available registers will be the obligation of the court; service into obligatory electronic mailboxes will be used vis-à-vis Slovak companies. The defendant must file a materially substantiated opposition within 15 days after delivery of the payment order (detailed substantiation will be required if the defendant claims VAT repayment on the basis of the claimant’s invoice in dispute). An insufficiently substantiated opposition will be refused by the court clerk. Any complaint filed against this decision will be finally decided by the first instance court. 

In order to motivate the creditors, the court fees have been set at 50% of the rate of the proceedings for a payment order – thus, at 3% of the principal. Standard electronic application forms will be used in communication between the court and the parties wherever possible. The Act on Collection Procedure has already been adopted by parliament and will enter into force on February 1, 2017.

The Major Amendment of the Slovak Execution Code

One of the key points of the amendment is the establishment of an enforcement court with exclusive jurisdiction in enforcement matters (District Court Banska Bystrica). The court will communicate with executors and keep files strictly by electronic means, including judicial decisions. 

A significantly new approach to the appointment of the executors will be implemented. Executors will be selected on a random electronic basis and according to the principle of territoriality – meaning that new executions shall be divided proportionally among executors in each administrative region. In this way, the possibility of a creditor developing a “business relationship” with an executor resulting from a repeated assignment of cases will be lessened. Though opposed by large institutional creditors, random selection is required due to the proposed extension of competences of executors, even though the downside of this measure certainly will be to decrease the competition motivation between executors. 

Each subsequent execution concerning the same debtor will be assigned to the executor who was randomly appointed at the opening of the first execution, which will lead to an elimination of repeated actions by various executors and thus to cost savings.

The legislature is also entrusting executors with more decision-making powers (to eliminate delays in execution), laying down a new set of common rules on determining the costs of execution (i.e., flat-rate costs) and granting access to a wider range of information for the public through the Central register of executions. On the other hand, the accountability and disciplinary responsibility of executors (for example, for repeated violations of obligations) will be stricter. 

The Slovak Chamber of Executors considers the (at this stage government-approved) amendment to the Execution Code a significant step forward, with the power to create better conditions for law enforcement and enhance transparency in executions. The amendment has still to make it through “final voting rounds” at the National Council of Slovakia. If adopted, it will enter into force on April 1, 2017.   

By Andrej Leontiev and Radovan Pala, Partners, Taylor Wessing

This article was originally published in Issue 3.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On 7 December 2016 the Slovak legislator adopted in a shortened legislative procedure the amendment to the Slovak E-Government Act (Zakon c. 305/2013 Z. z. o elektronickej podobe vykonu posobnosti organov verejnej mocia o zmene a doplneni niektorych zakonov v zneni neskorsich predpisov).

Pursuant to the amendment act the initial term for the obligatory activation of electronic mailboxes by Slovak legal entities registered with the Slovak Trade Registry (Obchodny register Slovenskej republiky) was postponed from 1 January 2017 to 1 July 2017. Accordingly, companies that have not activated yet their electronic mailbox for the purpose of official correspondence with Slovak public authorities (i.e. courts, authorities, ministries, agencies, etc.) will have time to do so until 1 July 2017.

The reason for the extension of the initial term for the activation of the electronic mailbox was that as of the end of 2016 electronic mailboxes had been activated by only a small number of Slovak companies. This fact led to the initiative in the Slovak government to propose said amendment to the Slovak E-Government Act.

The amendment act further introduces the so called “10-days rule” which stipulates that the owner of the electronic mailbox shall have ten days upon the initial registration into the electronic mailbox to take any necessary technical steps to ensure that messages will be effectively received in electronic form into the mailbox. After ten days from the initial registration the activation of the electronic mailbox will be deemed as completed and the Slovak public authorities may validly send official correspondence in electronic form into the electronic mailbox of the respective company.

By Jasna Zwitter-Tehovnik, Partner, and Natalia Feriencikova, Associate, DLA Piper Vienna

“Right now probably the most important topic is Corporate Criminal Liability,” said Partner Dana Nemcikova of Ruzicka Csekes in Slovakia. “The new law enacted last year incorporated criminal liability for corporations, which had not been part of the previous law.”

A year later, businesses are starting to recognize the significance of the law, Nemcikova reports, and while firms are continuing to offer seminars and webinars for their clients, those clients “are starting to pick up on it and come back to us with concrete questions.” Nemcikova describes this as “quite a hot topic” in Slovakia, reporting that Lucie Schweizer is leading the prominent Ruzicka Csekes team on the subject.

As for the law itself, Nemcikova notes that “of course it’s a good step,” as Slovakia had been one of the few countries in Europe without such a law on the books. “It’s not written well,” Nemcikova reports of the new law, noting that it’s already been formally amended once, “but that’s always the way with a new law. Of course it will need some time to work itself out.”

According to Nemcikova, one particularly interesting development is the recent attempts in Slovakia to find ways around the amnesty issued in March 1998 by former Prime Minister Vladimir Meciar to those responsible (allegedly members of the Slovak intelligence service and the country’s government) for organizing the 1995 kidnapping of then-President Michal Kovac’s son. A new proposal, according to Nemcikova, would allow for the amendment of Constitutional Law and overturn that declaration of amnesty. According to Nemcikova, this is “a very hot topic” — especially following the recent publication of a letter signed by some 26 of the country’s prominent legal experts, Supreme Court judges and Constitutional scholars declaring that the amendment would be possible and consistent with general legal principles, and citing precedent from other countries.

In terms of the business climate in general, Nemcikova says that 2015 was “a very good year” in Slovakia, and last year “still had some good signs.” The most notable deal in recent years was the 2015 investment agreement signed by Jaguar/Land Rover to produce cars in the country, and construction started on the plant in August 2016. The first car is expected to roll off the line in autumn 2018, Nemcikova reports, noting with pride that Ruzicka Csekes advised Jaguar/Land Rover throughout the process. She says there are also some “huge PPP projects” planned for the country for 2017, particularly for the country’s highways. “So we’ll see,” she says. “We’re quite optimistic. Hopefully it will happen.”