On 31 March 2020, the Czech government approved ‘Lex COVID-19’, a new act (and an amendment of the Insolvency Act and Enforcement Code) that should help mitigate certain effects caused by the COVID-19 epidemic, especially in relation to different proceedings (e.g. civil, administrative, criminal, insolvency and enforcement) and the corporate lives of legal entities.
Lex COVID-19 will now be debated in the Chamber of Deputies ahead of final approval.
Besides the fact that Lex COVID-19 contains certain measures pertaining to insolvency (e.g. a suspended debtor's obligation to file an insolvency petition) and enforcement proceedings (e.g. obligation of the court bailiff to stop the enforcement if the enforced obligation has not been partially satisfied for the past three years or if no assets punishable by the execution have been identified or seized during this period, which would at least cover the costs of the execution), Lex COVID-19 also provides an extended waiver of deadlines for certain proceedings provided that the deadline was missed as a result of the constraints imposed by any emergency measure (adopted either by the government, Ministry of Health, or Regional Hygiene Office) imposed in response to COVID-19.
A decision on a waiver will be assessed case-by-case. In other words, it will be assessed whether a particular person was restricted by any emergency measure in such a way that he was unable to meet the deadline (e.g. he was quarantined, or his lawyer needed to inspect the file for the purpose of taking any action but due to his own quarantine or a limitation of the court's operation it was not possible). An application for a waiver (together with the missed act) will have to be submitted within a specified period of time from the termination or cancellation of any extraordinary measure affecting the particular person.
Furthermore, in respect to legal entities, Lex COVID-19 generally enables decision-making bodies to use technical means or decision-making per rollam even in cases where such a decision-making possibility is not regulated in their founding act. Lex COVID-19 also provides an automatic extension for the terms of office of members of any elected body that expired during the emergency measures (or in some cases before), provided the member does not disagree with the extension. In addition, it extends the deadline in certain cases for convening the general meetings of limited liability or joint stock companies to discuss regular financial statements.
If you have any questions related to Lex COVID-19 and how it could impact your business, contact your regular CMS advisor or local CMS experts.
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