The Supreme Court has issued a landmark decision on the assessment of the validity of arbitration agreements for disputes concerning domain names in the .cz domain. In a case conducted under file ref. 23 Cdo 3895/2011, it examined whether the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic (Rozhodčí soud při Hospodářské komoře ČR a Agrární komoře ČR) is authorised to decide in a dispute concerning the domain name “suzuki.cz”.

Summary of the Case

The Arbitration Court decided on the domain “suzuki.cz” and issued an arbitral award. One of the parties filed an action to set aside this arbitral award, arguing that the Arbitration Court had no jurisdiction, as there was no arbitration agreement between the parties. In the proceedings, it was proven that the claimant had registered the domain name in question with CZ.NIC. As a result, he was obliged to agree to the Rules for Alternative Dispute Resolution, from which, inter alia, it follows that a third party who believes that its rights have been infringed by the registration of a specific domain name may choose to resolve the dispute either by using a general court or by using the Arbitration Court. In such a case, the domain name holder is obliged, on the basis of the aforementioned arbitration public offer, to submit to these proceedings.

The Municipal Court in Prague set aside the issued arbitral award; however, the High Court in Prague amended the decision by dismissing the action to set aside the arbitral award. The claimant thus had no choice but to file an appeal on points of law – and was successful.

Legal Assessment

The Supreme Court inclined to the view that a public declaration made by a domain name holder in an agreement concluded with a registrar towards an indeterminate circle of third parties that it will resolve any disputes arising in arbitration proceedings is not an expression of addressed will to resolve disputes arising in arbitration proceedings.

If the domain name holder thus undertook in the agreement with the registrar to “irrevocably publicly submit to the jurisdiction of the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic in arbitration proceedings before this arbitration court in the event that a third party challenges the domain name of the holder, included in the electronic database of domain names in the national domain ‘cz’, provided that the third party expresses in writing towards the holder the will to submit to the jurisdiction of this arbitration court in the given matter, with the proviso that it will initiate such a dispute before this arbitration court” and a third party initiated such a dispute before the arbitration court, an arbitration agreement was not concluded by this procedure between the domain name holder and this third party. The opinion expressed by the Supreme Court is not in any way surprising; the Arbitration Court had been repeatedly and continuously warned of the invalidity of the chosen construction, not only by forced participants in arbitration proceedings, but also by the professional public. However, it stubbornly insisted that it had jurisdiction to decide disputes. We believe, however, that the Arbitration Court will henceforth respect the opinion of the Supreme Court and, in cases where the parties raise a relevant objection, will declare the absence of its jurisdiction.

Petr Kočí, Advocate

eAdvokacie.cz – on-line legal advisory service

This text was translated from Czech to English using an AI translator.