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Arbitration – or arbitral proceedings – is a method of resolving disputes outside “conventional” state courts. Think of it as a private justice system that follows precise rules, is fast and efficient, and whose outcome – the arbitral award – has the same force as a final court judgment.
Arbitration is typically used by companies for disputes between one another. Especially where more complex commercial or technical-legal relationships are involved, arbitration typically concerns amounts ranging from at least hundreds of thousands to billions of Czech korunas.
Attorney Aleš Linhart has, over more than 30 years of practice, encountered disputes across industries and continents. In this practical guide, he explains what arbitration is and why companies choose it over “conventional courts.”
At the outset, the procedure resembles conventional court proceedings. Everything begins with a statement of claim, which is delivered to the arbitration court. The court accepts it, asks the claimant to pay the fee, and serves the claim on the respondent.
At the same time, the process of appointing arbitrators begins. In arbitration, you can choose an arbitrator who is an expert in your particular field – whether it is construction, automotive, or capital markets. The arbitrator can then understand the case not only from a legal but also from a practical perspective.
The standard rule is: each party to the dispute appoints one arbitrator, and these two arbitrators then jointly choose the presiding arbitrator of the arbitral tribunal. Importantly, even a party-appointed arbitrator must always be impartial – this is not someone who defends your interests like a legal representative.
This is followed by written submissions from both parties, the presentation of evidence, and oral hearings. Compared to court, the parties have more room to express their views and to shape the proceedings. The entire process ends with the issuance of an arbitral award.
“As an arbitrator, I have decided several disputes in expedited proceedings where I had to issue an arbitral award within one month. A quick decision means protecting the economic interests of both parties,” says Aleš Linhart.
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When our clients ask us whether to go to court or opt for arbitration, the answer depends on your specific situation. But in many cases, arbitration offers advantages that a state court cannot provide.
Court proceedings in the Czech Republic take years – often even more than five years. Arbitral proceedings are usually concluded within months. In expedited proceedings, even within one month. Every month by which a dispute is shortened is a month you can devote to your business instead of burning through your expenses.
Arbitral proceedings are not public. Anyone can come and watch in a courtroom – an arbitration court is closed to the public. For companies with a certain reputation, this is a major advantage. Especially when you are in a dispute with a business partner with whom you may need to keep working after the dispute ends.
In a state court, your dispute is decided by a judge who handles a wide range of cases from various industries. In arbitration, you can choose an arbitrator who is an expert in your particular field – whether it is construction, automotive, or capital markets. The arbitrator can then understand the case not only from a legal but also from a practical perspective.
Under the New York Convention, an arbitral award is directly enforceable in more than 170 countries around the world. This is a fundamental difference from a conventional judgment of a Czech court, which must first be recognized in another jurisdiction – which takes additional time and gives the opposing party another opportunity to challenge it.
| Arbitral proceedings (arbitration) | Court proceedings | |
|---|---|---|
| Length of proceedings | Months (even 1 month in expedited proceedings) | Years (even 5+ years in the Czech Republic) |
| Publicity | Not public – discreet | Public |
| Arbitrator’s expertise | Expert in your field | Generalist judge |
| Scheduling flexibility | As agreed by the parties | Depending on the court’s capacity |
| Enforceability abroad | 170+ countries (NY Convention) | Limited, complicated |
| Appeal | Usually no appeal | Possible, prolongs the proceedings |
| Costs | Slightly higher fee, lower overall costs and time saved | Lower fee, higher overall |
Every case is different and deserves an individual assessment. Schedule a no-obligation consultation – we will assess your situation and recommend the most effective path. Write to us at info@endors.cz or fill out the form here.
There are three permanent arbitration courts in the Czech Republic. Each of them is an institution with a permanent seat, maintains a list of arbitrators, and serves as a guarantor of the formal correctness of the entire proceedings, including the issuance of the arbitral award.
Aleš Linhart is registered as an arbitrator with the Arbitration Court attached to the Economic Chamber and the Agricultural Chamber of the Czech Republic. We know dispute resolution from both sides – as representatives and as those who decide. We can use this perspective to your advantage.
The parties choose arbitrators for their specific dispute from these lists. The arbitral award is signed by the chairman and the secretary of the arbitration court, which makes it an enforceable decision.
One of our cases involved a complex dispute between a car manufacturer and its supplier. It concerned a component that was causing problems in vehicles. The car manufacturer had to recall hundreds of vehicles and carry out inspections. High costs were incurred, and both parties argued over who was to blame – the supplier with a defective part, or the car manufacturer with faulty assembly.
The dispute was complex from both a legal and a technical standpoint. Before an ordinary court, it would have taken years. Thanks to arbitration – where the arbitrators understood both the law and the technicalities of the automotive industry – it was resolved in eight months.
The costs of court proceedings are not just about court fees. They are months or even years during which you focus on the dispute instead of your business. They are damaged business relationships and sleepless nights with an uncertain outcome at the end.
And yet, sometimes all it takes is having a contract properly drafted before it is signed. At endors, we don’t just review contracts – we draft them so that you can do business with peace of mind. Schedule a consultation or contact us at info@endors.cz.
Many business owners today write their own contracts. They download a template from the internet, have it generated by artificial intelligence, or take over a contract from their partner and just fill in the details. It is fast and cheap. But it is also a huge risk.
In our practice, we regularly see the consequences of this approach. Clients who wanted to save on legal services at the outset ultimately paid many times more for a lengthy and complex dispute. They could not get out of the unpleasant situation they had gotten themselves into on their own.
An arbitration clause is a powerful tool – but only if it is drafted correctly. If even one of these elements is missing from the arbitration clause or is poorly worded, it can give rise to complex disputes over just the commencement of the proceedings.
Even the best contract cannot guarantee that a dispute will never arise. Business relationships are alive and situations change. What matters, however, is how you act at such a moment.
The sooner you turn to a lawyer, the better. Not because a lawyer would want to escalate the dispute – quite the opposite. An experienced lawyer can assess whether it makes sense to negotiate an out-of-court settlement, or whether decisive action is necessary.
At endors, we always start with an analysis. From the outset, we will walk you through how the dispute may develop and the outcome you can realistically expect. We do not promise success unless we are sure of it – but we do not exaggerate the risks either.
Behind every commercial dispute, there is a story. The story of a company that built something of its own. The story of people who have put hundreds of hours of work, energy, and personal commitment into their business.
At endors, we know and understand these stories – because we live them together with our clients. With a potential dispute, we consider the impact on your business, on your relationships, and on your future.
Disputes are sometimes unavoidable. But you never have to face them alone.
Get in touch – info@endors.cz
Arbitration, or arbitral proceedings, is a method of resolving disputes outside state courts. It is a form of private justice in which the dispute is decided by independent arbitrators. The result is an arbitral award, which has the same legal force as a final court judgment.
Usually months – compared to years in state courts. In expedited arbitral proceedings, even one month. The specific length depends on the complexity of the case and the cooperation of the parties.
The costs include the arbitration court fee and the arbitrators’ fees. Although the initial fee tends to be higher than in a state court, the overall costs of the dispute tend to be lower thanks to the shorter proceedings and the lower time burden on the company’s management.
Yes. An arbitral award is directly enforceable and, in the case of international arbitration, it is recognizable in more than 170 countries around the world under the New York Convention.
Arbitral proceedings have their own specific procedural rules. The quality of legal representation often determines the outcome.
A well-drafted arbitration clause clearly specifies the seat of arbitration, the number of arbitrators, the method of their appointment, and the applicable procedural law. If even one of these elements is missing, it can lead to lengthy disputes over just who will decide and where.
Yes. Unlike court proceedings, which are public, arbitration is fully closed to the public. For companies that value their reputation, this is a major advantage – especially in disputes with business partners with whom you may continue to work.
For more than 30 years, I have focused on dispute resolution – both as a legal representative of clients and as an arbitrator at the Arbitration Court attached to the Economic Chamber and the Agricultural Chamber of the Czech Republic.
