Litigation over shares transfer? Beware of correct jurisdiction

27. 10. 2017

Have you sold shares or business shares in a Ltd. company and the buyer refuses to pay the purchase price despite having been reminded? Should all your efforts to rectify the situation peacefully fail, you may be forced to turn to a court and ask it to force your business partner to pay the price (or e.g. the unpaid difference).

Do you, however, know which court you should bring your case to?

The Supreme Court has recently established[1]​ a rule that even after the amendment to the Civil Procedure Rules, which introduced changes to the functional jurisdiction of district and regional courts, any litigations regarding contracts on transfer of shares (of a Ltd. or joint stock company) are to be decided by regional courts (or the Municipal Court in Prague).

If, then, a buyer does not pay a (part) of the purchase price or pays after the due date and you gain a right to claim a contractual penalty or file a motion for a change of the ownership of the transferred shares or for invalidity of the transfer on the grounds of a spouse not having agreed to the transfer, or you claim the reimbursement of the price for the transfer of shares due to invalidity of the contract etc., you will need to bring the suit to a regional, not a district, court.


[1]See Ruling of the Supreme Court of the Czech Republic regarding case number 29 Cdo 4825/2015 of 15 June 2017

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