الجمهورية التشيكية

Civil Code, Arts. 2972, 2976; Arbitration Act, Arts. 2(1), 2(2), 13

The plaintiff and the defendant are permanent arbitration tribunals established by statute to adjudicate arbitration proceedings under the Arbitration Act.

The plaintiff sought protection against the defendant’s conduct, by which the defendant issued a resolution effectively establishing a requirement of “exclusivity” for arbitrators listed on the defendant’s roster prohibiting their cooperation with other arbitration tribunals. According to the plaintiff, the adoption of the resolution was motivated by an intended restriction of competition so that the defendant could retain its privileged position. This measure thus adversely affected the plaintiff since certain arbitrators terminated their cooperation with the plaintiff, preferring to remain with the defendant, which reduced the plaintiff’s competitiveness and thereby caused it non-pecuniary harm. According to the plaintiff, the defendant’s conduct constituted an unlawful restriction of competition (both in the form of an abuse of the defendant’s dominant position and concluding the prohibited cartel agreements) and constituted the prohibited conduct under unfair competition law as well.

The Court of Appeals upheld the trial court’s finding that the defendant had engaged in unfair competition and ordered the defendant to publish a letter of apology to the plaintiff and to revoke the resolution in question.

The Supreme Court first assessed whether permanent arbitration tribunals established by statute engage in mutual economic relations and thus participate in economic competition. It took into account that the offer by arbitrators and arbitration tribunals to adjudicate property disputes does not take place within the exercise of public authority, but rather as part of private autonomy of arbitrators and arbitration tribunals. This offer is driven by a competitive intent that (objectively) pursues competitive objectives, rather than any other possible objectives. The selection of a specific arbitrator to hear a potential property dispute between the parties depends fundamentally on the will of the disputing parties, as well as on the arbitrator’s willingness to accept the authority to hear and decide the parties’ dispute, so it reflects the private economic nature of such activity. From this perspective, the position of permanent arbitration tribunals does not differ from the position of ad hoc arbitrators.

The Supreme Court concluded that the permanent arbitration tribunals by arranging of adjudication of property disputes under the Arbitration Act participate in economic competition and may thus engage in unfair competition (unlike the process of adjudicating of a specific property dispute as such which is no longer subject to the economic competition).

It was also necessary to assess whether the defendant’s conduct in question was contrary to the good morals of competition, as a legal requirement for its classification as unfair competition.

The Supreme Court took into account that the law provides for a wide range of situations in which it either directly imposes an obligation on market participants to maintain a certain degree of “exclusivity” in the conduct of their business activities towards other competitors, or provides expressly for the option of entering into an agreement establishing such exclusivity. Furthermore, the law does not generally prohibit agreements on a broader scope of such exclusivity beyond the situations defined by law.

Therefore, entering into such “exclusive” positions (whether specifically agreed in a contract or de facto required) as a condition for economic cooperation does not constitute a phenomenon that is, in and of itself, unfair to other competitors or customers. This is because it is precisely the competitive decision regarding in which form and with which entities a competitor will conduct its business that constitutes a fundamental element of free competition.

There is no reason why the above conclusions should not also apply to competitors in the arbitration services market. The Supreme Court thus concluded that the mere requirement or obligation of “exclusive” cooperation between competitors do not constitute a conduct contrary to fair competition standards. This also applies when a permanent arbitration tribunal imposes such a requirement for the registration of arbitrators on its roster.

Therefore, the Supreme Court revoked the lower courts’ decisions. However, it instructed them to examine, in further proceedings, whether the conduct in question - given the parties’ positions in the relevant market - constitutes a restriction of competition through the defendant’s abuse of its dominant position in the relevant market or through the conclusion of prohibited agreements among competitors.