The Supreme Administrative Court (NSS) of the Czech Republic has ordered the reopening of a legal battle over a European Union subsidy granted to Schrom Farms, a poultry company within the Agrofert holding. The case centers on a grant of 1.6 million Czech korunas intended for the modernization of a farm in Bílovec, located in the Nový Jičín region .
This judicial directive requires the Municipal Court in Prague to clarify a critical legal discrepancy: whether a four-year or a ten-year time limit applies to the initiation of review proceedings for the recovery of the funds. The outcome of this determination will decide if the Czech state acted within the legal timeframe to reclaim the subsidy or if the effort was delayed beyond the permissible limit.
The dispute is rooted in a long-standing conflict regarding the conflict of interest of Andrej Babiš, the founder of Agrofert and former Prime Minister. While Agrofert had placed its assets into a trust during Babiš’s first term as head of government, an audit by the European Commission concluded that the holding continued to be controlled by him, leading to numerous legal clashes between the state and the conglomerate .
Previously, the Municipal Court in Prague had ruled in favor of Schrom Farms. The court initially canceled the decision to return the subsidy and ordered a review proceeding. Subsequently, it canceled the initiation of that review proceeding on the grounds that it was filed too late, adhering to a four-year limitation period.
The Legal Conflict: Four Years vs. Ten Years
The core of the current dispute lies in a contradiction between European regulations and Czech national law. The Ministry of Agriculture, in its cassation complaint to the Supreme Administrative Court, highlighted a direct conflict between two legal frameworks:
- European Regulation: Establishes a four-year limit for the recovery of funds.
- The Act on the State Agricultural Intervention Fund (SZIF): States that the fund initiates proceedings for the return of a subsidy “no later than ten years from the date of its payment” .
The Municipal Court had previously favored the shorter four-year window, which effectively shielded the company from the repayment demand. However, the NSS has now mandated that the court re-evaluate which of these timelines takes precedence in this specific case.
Broader Context of Agrofert Subsidy Disputes
The Schrom Farms case is part of a wider series of legal challenges involving Agrofert and the State Agricultural Intervention Fund (SZIF). In other instances, the NSS has maintained a consistent stance in favor of the state. Throughout 2025, the NSS rejected several complaints from Agrofert-affiliated companies regarding denied subsidies, including Kostelecké uzeniny, Vodňanské kuře, Kladrubská, Olma, and Zemědělská společnost Blšany .
In those cases, the SZIF had declined to provide subsidies due to concerns that the European Commission would not reimburse the funds because of the conflict of interest involving Andrej Babiš. The Constitutional Court (ÚS) later confirmed four of these rulings, rejecting claims of discrimination by the companies .
Timeline of the Schrom Farms Case
| Year/Period | Event |
|---|---|
| 2018 | Schrom Farms receives the 1.6 million CZK subsidy for farm modernization in Bílovec. |
| Post-2018 | SZIF initiates proceedings to recover the funds; Ministry of Agriculture confirms repayment is required. |
| Court Phase 1 | Municipal Court in Prague cancels the repayment decision and orders a review proceeding. |
| Court Phase 2 | Municipal Court cancels the review proceeding, citing the four-year limit as expired. |
| Current Status | NSS orders the Municipal Court to reopen the case and clarify the applicable time limit (4 vs 10 years). |
What This Means for the State and Agrofert
If the Municipal Court determines that the ten-year limit provided by the Act on the State Agricultural Intervention Fund applies, the state’s effort to reclaim the 1.6 million CZK would be legally valid despite the time elapsed since 2018. Conversely, if the four-year European regulation is upheld, the state may be barred from recovering the funds due to the delay in initiating the proceedings.
This case serves as a critical test for how Czech courts reconcile national administrative laws with overarching European Union regulations when dealing with the complex ownership structures and conflict-of-interest audits associated with the Agrofert holding.
The next official step is for the Municipal Court in Prague to issue a clarification and ruling on the applicable time limit for the review proceedings. We encourage our readers to share their views on the intersection of national and EU law in the comments below.
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