Points of law

The Supreme Court stated in the decision that:

a. Foreign States cannot invoke immunity before Czech courts in proceedings relating to pecuniary compensation for unjust enrichment caused by using a land sine causa (without a legal title, i. e. without a lease contract) for the purpose of diplomatic mission (as a residence of diplomatic agents). The unjust enrichment is a private-law relationship characterized by equality of its subjects and therefore it is not, by itself, a result of carrying out state, governmental or other public functions. The proceeding concerning the compensation for unjust enrichment does neither interfere with the performance of the functions of the diplomatic mission nor contravenes article 22 of the Vienna Convention on Diplomatic Relations providing for the inviolability of the premises of the mission;

b. Generally, it is appropriate not to grant immunity to a foreign state in a proceeding relating to immovable property used by this state’s diplomatic mission, provided that this proceeding does not violate receiving state’s obligations under Vienna Convention on Diplomatic Relations that ensure inviolability of premises (article 22 of the Vienna Convention on Diplomatic Relations) and does not interfere with the performance of the functions of the mission. The obligation to protect the premises is not violated by the mere fact of court ruling against the foreign state, since the immunity of the premises of the mission from execution or the prohibition against entering the premises without the consent of the head of the mission remains effective;

c. A state cannot claim immunity (in addition to cases when it waived the immunity) in proceedings concerning its commercial transactions; contracts of employment; ownership, possession or use of property; compensation for injury to persons or damage to property; intellectual and industrial property; participation in businesses companies; and rights and obligations arising out of the use of immovable property situated in the state of the forum - basically in cases when the state does not carry out sovereign authority (acta iure imperii), but acts as a legal entity in a private-law relationship characterized by equality of its subjects. The UN Convention on Jurisdictional Immunities of States and Their Property, although not in force, is a basis of commonly accepted regime of state immunities in this regard.

Summary of the case

The Supreme Court of the Czech Republic, in its decision of 6 December 2017, dealt with a case of alleged unjust enrichment. The Plaintiff (T.) sued Prague District Troja and the Embassy of Korean Republic in the Czech Republic on the following grounds: Prague District Troja is owner of a land neighbouring with the land in plaintiff’s ownership. Prague District Troja leased this land to Korean Embassy. Later, the plaintiff found out that fence dividing his and the neighboring land did not correspond to land borders as indicated in the land registry. He alerted Prague District Troja and the District entered into contract with him to lease part of his land within the fencing.

The Plaintiff believed that before the moment he and Prague District Troja entered into the aforementioned contract, the District and the Embassy (who leased it from the District) used part of his land sine causa. He therefore claimed damages for unjust enrichment caused by using part of his land.

In the proceedings the Embassy expressed its opinion that this case was covered by its immunity. Lower courts (District Court for Prague 7 and Prague Municipal Court as an appellate court) dismissed Plaintiff’s action on grounds of immunity and pointed out that if it admitted the action, a possible violation of the Vienna Convention on Diplomatic Relations could occur. The Supreme Court however repealed decisions of lower courts, expressed binding opinion stated above and obliged District Court for Prague 7 to hear the case again.

Sources

The Supreme Court of the Czech Republic Judgement Ref. No. 21 Cdo 3095/2017-104 (available here: http://nsoud.cz/)

Additional information (explanations, notes, etc.)