(Non)conclusion of an Arbitration Agreement as a Prerequisite for Set-off Cover Image

(Ne)uzavření rozhodčí smlouvy jako předpoklad započtení
(Non)conclusion of an Arbitration Agreement as a Prerequisite for Set-off

Author(s): Luboš Brim
Subject(s): Criminal Law, Civil Law, International Law, Philosophy of Law, Court case, Comparative Law
Published by: Masarykova univerzita nakladatelství
Keywords: arbitration proceedings; jurisdiction; set-off; conditional juridical act

Summary/Abstract: Set-off is a phenomenon of substantive law consisting in the extinction of mutually oriented claims of two creditors. If a party to a proceedings invokes set-off as a procedural defence, the existence and characteristics of both claims to be set off must be examined in order to assess the validity of this objection. This is problematic where the claim which the party sets off is not subject to the jurisdiction of the authority which decides on the claim against which the set-off is made. According to Czech case law, the court has jurisdiction to take into account the set-off of a claim that is subject to an arbitration agreement and the arbitrator is entitled to take into account the set-off of a claim that is not subject to an arbitration agreement. In this article, we argue in favour of a different solution, according to which the court cannot take into account the set-off of a claim that should be pursued in the arbitration proceedings, and the arbitrator is not entitled to take into account the set-off of a claim that has been left to the jurisdiction of the courts. However, under the approach proposed here, such a procedurally impermissible set-off does not result in the substantive extinction of the claim that is being set off, and therefore allows the party to pursue its claim in a separate action before the competent authority and, following a final award, to repeat the set-off, now with the intended procedural effects.

  • Issue Year: 33/2025
  • Issue No: 3
  • Page Range: 397-425
  • Page Count: 29
  • Language: Czech
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