Points of law

The Supreme Court of the Czech Republic stated in the decision that:

a) the property of a foreign state, which is used or intended for use in the performance of its state, governmental and other public powers and functions (property serving governmental purposes), including banks accounts used or intended for use in the performance of the functions of a diplomatic mission, is immune from any measures of constraint in connection with a court proceeding, unless the foreign state consented to the taking of such measures or allocated or earmarked a part of the amount of money on the bank account for the satisfaction of the claim which is the object of the proceeding,

b) a certificate of the ambassador, that bank accounts of a diplomatic mission are used exclusively in relation to performance of functions of such mission, is sufficient evidence, unless other facts contradicting that statement are proved,

c) demanding specific information from a diplomatic mission concerning existence, purpose or use of financial means deposited on its bank account or concerning particular transactions with such means, would be an interference with internal affairs of a foreign state (diplomatic mission) in violation of international law.

The Supreme Court based its decision concerning the immunity of the property of a foreign state, which is used or intended for use in the performance of its state, governmental and other public powers and functions, including the bank accounts of the diplomatic mission, on customary international law, as reflected in relevant provisions of the United Nations Convention on Jurisdictional Immunities of States and Their Property, namely its articles 18 – 21.

Summary of the case

The Supreme Court of the Czech Republic, in its decision of 27 March 2018, dealt with a case concerning the immunity from execution of foreign diplomatic mission’s bank accounts in connection with a labour law dispute (concerning alleged unlawful dismissal) with a member of the local staff.

The plaintiff (individual M. N.) filed a suit concerning her employment contract with the Embassy of India. The competent Czech court granted provisional measure requiring the Embassy to pay the plaintiff her salary – CZK 14,000 on a monthly basis. The decision was executed by taking (deducting) the debt off the debtor's (India’s Embassy) bank account.

Later, after notice given by the Ministry of Foreign Affairs of the Czech Republic, the court repealed its decision ordering the execution, since it came to the conclusion that the Embassy’s bank accounts, used exclusively in the performance of the functions of the diplomatic mission, are protected by the immunity from execution The plaintiff appealed. In appellate proceedings, the appellate court (Prague Municipal Court) upheld the decision of the lower court stopping the execution proceedings on grounds of immunity. The plaintiff lodged an extraordinary appeal against the decision.

The Supreme Court of the Czech Republic dismissed the extraordinary appeal lodged by the plaintiff and upheld decisions of lower courts on grounds stated above.

Sources

The Supreme Court of the Czech Republic Judgement Ref. No. 21 Cdo 43/2018 (available here: http://nsoud.cz/)

Additional information (explanations, notes, etc.)