Amendment to the Executions Act

Act No. 32/2002 Coll. amending and supplementing the Act of the National Council of the Slovak Republic No. 233/1995 Coll. on Court Bailiffs and Executions (the Executions Act) as amended

The new wording of the Executions Act has introduced certain new methods of execution, as well as provisions aimed to protect health care institutions and health insurance companies from the risk of executions.

The new legal regulation has much stricter requirements for education and experience of bailiffs. A bachelor's degree is not sufficient anymore and a full university degree is required. A previous experience in executions of at least two years is required, while experience of judges, prosecutors, attorneys, notaries or their trainees is not accepted.

The Bailiffs' Chamber of the Slovak Republic (the ``Chamber'') has the right to recommend and express its opinion on a candidate for bailiff.

Upon cessation of activities of a bailiff's office due to death of a bailiff, a substitute is appointed by the Chamber. The substitute shall conduct a registration of all the bailiff's files, financial settlement of the files, execution in pending execution procedures, transfer funds received by the bailiff to entitled persons, another bailiff or obliged persons, once all claims are settled.

The substitute shall submit all closed files to the executions archive. This archive is kept by the Chamber for terminated bailiff's offices, otherwise each bailiff keeps his/her own archive.

The court may impose a penalty on a person not co-operating with a bailiff, although having such duty under this act.

A provision on bailiff's duty to inform the National Labour Office about an execution of employer's assets, has been cancelled.

If it is not possible to deliver a consignment to a legal entity or an entrepreneur to its seat/address registered in the relevant registry, and the bailiff is not informed about any other address, the consignment is considered to be delivered by expiry of three days after its return back to the bailiff. That applies even in the case that the addressee did not know about the delivery. The aim of this provision is to harmonise provisions on delivery contained in the Slovak Civil Procedure Code and the Executions Act and to introduce the so-called ``fiction of delivery''.

The bailiff may, with a written consent of the entitled person, execute a written agreement with the obliged person on a payment calendar for the executed receivables. Provided that the payment calendar is duly kept, the bailiff makes no further steps in the execution.

The Court shall terminate an execution in case the funds of the obliged person do not cover the costs of execution, or the entitled person did not pay the court fee for an authorisation to conduct the execution.

In addition to the previous method of execution by seizure of an item, destruction of an item at expenses of the obliged person, has been introduced. The goal of this is to provide further protection to intellectual property rights.

Rights to patents, industrial designs, utility models, trademarks or topographies of semiconductor integrated circuits became proprietary rights, which may be subject to executions under the Executions Act. The intellectual property rights with a personal element may not be subject to executions.

If an execution of intellectual property rights is conducted, the bailiff shall deliver to the Industrial Property Office of the Slovak Republic (the ``IPO'') the following:

a)

list of rights registered with the IPO, that may be executed,

b)

information on commencement of the execution,

c)

minutes from an auction,

d)

valid court decision on termination of the execution, if such decision has been issued.

Participation of the obliged person in a business corporation is cancelled by delivery of the execution order. The business corporation should transfer the financial amount equal to a compensation share, otherwise paid to the shareholder under conditions stipulated in the Commercial Code, to the entitled person. The amount transferred should not exceed the executed amount. In case the business corporation is in liquidation, it is obliged to transfer an amount equal to a liquidation share, up to the executed amount.

The bailiff conducting the execution:

a)

informs the entitled person, the obliged person and the business corporation about the commencement of execution by method of execution of business interest,

b)

orders the business corporation not to pay a compensation share or a liquidation share to the obliged person,

c)

forbids the business corporation to approve a transfer of business interest, if an approval of the business corporation is required.

Registered securities, bearer securities and order securities, transferable by an endorsement, as well as other securities under special laws, may be executed. The bailiff shall list the securities and than either seize them, or order suspension of the right to transfer the securities, or take any steps that replace the seizure of securities.

Upon delivery of the order to commence with the execution by sale of securities and a request of the bailiff, the court shall order, within 30 days, to the Securities Centre of the Slovak Republic to suspend the right of the obliged person to dispose with the book-entered securities.

The recent amendment limits the right of the obliged person to appeal the decisions made in the course of execution and raise objections. Previously, the appeals of the obliged persons made even in the final stages of execution slowed down the execution. The aim of the amendment is to reduce the amount of work at courts and at the same time to keep the legal certainty of parties of the proceeding.

As the last important change in the Executions Act, the amendment has equalised liens on real estate by allowing bailiffs to create an execution lien even alongside an already existing lien.

This Act is effective as of 1 February 2002.

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