(Czech Supreme Court Ruling No. 31 Cdo 3065/2009 dated 16 January 2013)

A company transferred title to shares to secure a financial obligation to the appellant under a cooperation agreement. The company performed its contractual commitment in instalments pursuant to the agreement, but did so prior to the due date of each instalment. Moreover, it remitted the instalments to an account held by the appellant other than the contractually agreed account. The contentious points that arose, then, were whether the debtor had duly performed its obligation and whether the appellant had incurred an obligation to transfer the title to shares back to the company.

In its ruling, the Supreme Court confirmed that if a debtor repays a creditor in an account other than was contractually agreed, this shall not constitute the rendering of performance in the agreed place. It added, however, that if the creditor fails to return these funds to the debtor immediately after it could in due course have ascertained that the debtor had remitted the monetary performance to another account, the debtor’s obligation shall be deemed to have been performed on the day on which the respective amount was remitted to the creditor’s account.

The court further stated that the debtor shall be authorised to perform its obligation early where the agreement does not stipulate that the period of performance shall be determined to the benefit of the creditor or at least of both parties.