Our firm has a business partner in Slovakia. Our relationship went well, we had been delivering goods to Slovakia and our Slovak customer always paid on time. However, our last invoice stayed unpaid even though we followed up with the customer several times. How does the business debt collection process work in Slovakia? Is the Letter Before Action legally required before we can make a claim to the court?
If you have exhausted all the usual methods of encouraging the customer to pay their debt voluntarily, such as written payment reminders, regular e-mails, and phone calls, it is appropriate to move forward and initiate the process of debt collection. Before you hire a qualified Slovak attorney, you may wish to send a letter to the customer, inform them that you intend to take legal action, and give them a final chance to pay the owed amount.
However, the official Letter Before Action (i.e. a letter laying out the owed amount and the date the payment must be made by) is not a legal requirement without which it would not be possible to file a court claim.
Once the Slovak attorney takes on the case, they usually write a “pre-court claim” to the customer. In that pre-court claim, the attorney outlines that there is going to be legal action and informs about the contractual or statutory delay interest penalty as well as the court fees and costs of legal representation. In some cases, the attorney’s letter helps and motivates the debtor to pay up. As mentioned though, this is a usual practice and not a condition of further court process.
If the customer still does not pay and you have instructed the Slovak attorney to pursue the matter to the court, a fastened civil procedure may be used for the claiming of the unpaid invoice. The specific term for this kind of procedure is a “Notification Procedure” (in Slovak Upomínacie konanie). In this procedure, the claim can be filed exclusively electronically by filling in the particular electronic forms, signing them with a qualified e-signature, and submitting them through the e-claims webpage of the Slovak Ministry of Justice. The court fee for filing a Notification Procedure claim is three per cent of the claimed amount, which is half of the court fee payable in the usual civil procedure (six per cent).
Your Slovak attorney will ask you to provide evidence documenting your claim, such as the Contract, General Terms and Conditions, Order, Invoice, and Acknowledgement of Goods Receipt. The advantage of filing electronically is that the scans of the documents in electronic form are sufficient and you do not need to send anything in paper form.
After the claim, or rather the Petition for Issuance of Payment Order (in Slovak Návrh na vydanie platobného rozkazu), is filed and the court fee is paid, the court has ten business days to issue the Payment Order. The Payment Order is a judgement ordering the debtor to pay the owed amount to the claimant.
When the debtor receives the Payment Order, they have fifteen days to dispute it, or in the more specific Slovak terminology, to file an objection against the Payment Order to the court. It may be the case that the debtor ignores the Payment Order and does not dispute it. If this happens, the Payment Order becomes final and represents an enforceable title. Based on this, you can appoint a debt collector (in Slovak exekútor) who will start with the process of attaching the debtor’s assets in order to satisfy your claim.
More often than not, the Payment Order is disputed by the debtor and they file objections. Although the court has the right to reject such objections based on insufficient reasoning, this rarely happens. Usually Slovak courts accept any objections, even if they are poorly reasoned, in which case they cancel the Payment Order and the process continues in a way usual for civil procedures. Your attorney receives the objections, confirms that you wish to continue in the claiming process, and provides a statement to the objections. The case is then heard in front of the court, and the first instance court decision can be appealed in front of the appellate court.
In our experience, the real upside and practical advantage of the Notification Procedure is the lower court fee. However, sometimes the debtor does not react and does not even dispute the Payment Order. In that case, it is the fastest way to collect your unpaid invoice.