How Far Does the Concept of "court" under Brussels I bis Extend? On the Judgment of the Prague Municipal Court

The Brussels I bis Regulation creates a framework for cross-border recognition and enforcement of court decisions in civil and commercial matters within the EU. This Regulation does not define the term "court," nor does European law contain its uniform definition. In practice, the question arises as to whether, according to this Regulation, it is possible to recognise and enforce decisions of authorities that are not part of the system of judicial authorities, but exercise decision-making competence entrusted to them by law, abroad. The topicality of this issue is confirmed by a recent judgment of the Prague Municipal Court dated 21 January 2025, ref. no. 5 A 71/2024, in which the court inferred that the Financial Arbiter could also be considered as a "court" within the meaning of the Regulation.

I. The Judgment That Opens Up a New Interpretative Question

The Prague Municipal Court, in its judgment of 21 January 2025, ref. no. 5 A 71/2024, in the matter of cross-border enforceability of the awards of the Financial Arbiter, reached the conclusion that the Financial Arbiter is a "court" within the meaning of the Brussels I bis Regulation[1], and is therefore entitled, or rather obliged, to issue a certificate pursuant to Article 53 of this Regulation[2]. The court dispute did concern a lawsuit for protection against the inactivity of the Financial Arbiter, but here, the court dealt in greater detail precisely with the interpretation of the autonomous concept of "court."

Thus, the judgment brings a significant change in the interpretation of this concept, as in the context of the Brussels I bis Regulation and by means of the so-called functional approach to the concept of "court," it in effect puts decisions of the Financial Arbiter on par with court decisions enforceable throughout the EU. This different interpretation by the Prague Municipal Court, which extends the existing understanding of the concept of "court" under Union law, is therefore crucial especially for the functioning of the system of mutual trust between Member States as well as for cross-border recognition and enforcement of decisions within the EU. Moreover, the decision, by its significance, exceeds the isolated context of the Financial Arbiter, as it also influences other authorities of alternative dispute resolution (ADR) or other quasi-judicial institutions.

This leads to the principal question addressed by the article: Can the Financial Arbiter be considered a court within the meaning of the Brussels I bis Regulation, and what is its position in the system of judicial protection in České republice?

II. What Is the Reasoning of the Prague Municipal Court Based On?

The Prague Municipal Court in Praze reached the conclusion that the Financial Arbiter meets, for the purposes of the Brussels I bis Regulation, the conditions to fall under the term "court," mainly on the basis of the case law of the Court of Justice of the European Union (CJEU), especially the judgment in the case of Pula Parking (C-551/15)[3]. According to this judgment, in the context of the Brussels I bis Regulation, the term "court" is an autonomous concept of Union law and cannot be interpreted solely according to national legislation.

At the same time, the court extensively relies on the opinion of Advocate General Michala Bobka in the case of the cited Pula Parking judgment[4]. The Advocate General, in his opinion, describes the difference between the so-called functional and institutional approaches to the concept of "court." The functional approach is based on the presumption that even an authority outside the formal national judicial system may be considered a "court" if it carries out activities in nature corresponding to judicial decision-making. On the other hand, in the institutional approach, only such an authority may be considered a "court" that is, in the legal order of the given state, constituted as an authority of judicial power and is part of the judicial system.

Thus, the Prague Municipal Court in its judgment inclined to the functional approach and, based on the following criteria—which, in its view, the Financial Arbiter meets—concluded that the Financial Arbiter fulfils the characteristics of a court, or respectively of judicial decision-making, in the context of the Brussels I bis Regulation:

• establishment by law;

• permanent nature;

• binding jurisdiction;[5]

• contradictory proceedings;

• application of legal rules;

• independence and impartiality of decision-making.

Based on these criteria and the additionally considered teleological argument (according to the court, the aim of European legislation and the very existence of the Financial Arbiter is effective consumer protection, which would be de facto frustrated by the opposite, formalistic interpretation), the court concluded that the Financial Arbiter, in the context of the Brussels I bis Regulation, fulfils the concept of "court."

The article was published on the website epravo.cz

Authors:

Jan Sůra, partner at Portos, advokátní kancelář s.r.o.

Pavel Petřek, attorney at Portos, advokátní kancelář s.r.o.