(Czech Supreme Court Resolution No. 23 Cdo 3085/2014 of 21st January 2015)
Here, the Supreme Court assessed the validity of an arbitration clause formulated in a way that that arbitrator selection was left to just one of the parties while the arbitration clause failed to contain any reference to a specific statute or rule issued by an entity that is not a permanent arbitration court.
In the statement of reasons for its decision, the Court cited a High Court in Prague decision of 28 May 2009, No. 12 Cmo 496/2008, whereby the parties to an arbitration agreement shall agree on either an ad hoc arbitrator(s) or a permanent arbitration court established by law (§ 2 of Act No. 216/1994 Coll. on arbitration and the enforcement of arbitral awards). As regards an ad hoc arbitrator who must always be a natural person (refer to Legal Update, August 2015), this arbitrator or arbitrators (where there are more than one) may be directly named in the arbitration agreement. Alternatively, the agreement may stipulate the method to determine the number and identity of arbitrators (§ 7 of the Arbitration Act). Establishing the method of arbitrator designation shall be understood exclusively as the specification of a method that is not left at the discretion of only one of the parties (refer to § 269 of Act No. 513/1991 Coll., the Commercial Code).
The Supreme Court concluded that to maintain transparency in arbitrator selection and the equality of the parties in arbitration proceedings, arbitrator selection cannot be left at the discretion of only one of the parties in a dispute, as this could lead to an imbalance in the rights and obligations of the parties.